Nobody in political The Hague can ignore it anymore: prosperity in our country is not distributed fairly. Ten percent of the richest Dutch people own no less than 61 percent of the wealth, the top 1 percent even a quarter of the total wealth.
A long-awaited study shows that wealth is ‘more skewed’ than previously thought, according to a study led by economist Laura van Geest.
The study has been awaited for a long time, because left-wing parties in particular denounce this large imbalance. The investigation should be the go-ahead for the cabinet to re-examine the tax system.
According to the researchers, it is clear that most Dutch people mainly get their income from work – no surprise, of course – but that the richest top 1 percent of the Netherlands mainly gets it from their companies, second homes and investments. That could be the handle for lowering the tax on labor and raising it on wealth.
After all, those who have less pay a relatively larger part of their income in taxes. Moreover, Van Geest writes: “Too skewed distribution of wealth is economically harmful.”
The research shows that the largest group of Dutch people has their wealth mainly in their own home (63 percent of the assets), while the richest 10 percent mainly have their money in a private limited company or company. The tax burden has actually decreased in recent years, and is lower than for an employee with a good income.
Even if a company transfers to a successor, the gift and inheritance tax is so favorable that it further maintains the imbalance in capital.
Rutte
Prime Minister Mark Rutte has already said he will take that advice to heart, although he had yet to read the report. “There are differences in wealth distribution that make you say: how is that possible? A small group stands out very favorably. We will tax wealth more heavily, and use the proceeds to lower income tax.”
Rutte says that being rich ‘is allowed’. “We don’t have a jealousy tax. But you can ask yourself: is that fair?” According to him, the cabinet will come up with a plan around Budget Day to look at less tax on labor and more on property. “Then we’ll see if it works. But you have to do that very precisely. You don’t want to touch someone’s first house, your pension or the SME.”
Still, the minds seem ripe to overhaul the tax system. All coalition parties, including the VVD, say they are ready for it. The hiccup is that this cannot be arranged in a week: such a system change takes years. The new way in which capital is taxed in box 3 alone will not succeed until 2025.
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