This week, the outrage focused again on the super-rich. Not only are they becoming richer faster than the rest of the Netherlands, their tax burden is also lower, the economists of the Central Planning Bureau concluded in a report. One of the causes behind this capital growth: our flawed tax system.
Now I understand that outrage. But getting excited about the super-rich is like looking through a straw.
The inequality problem that the CPB describes is broader. There is a large group of Dutch people who pay relatively little tax on their assets. That is precisely why few political parties have the courage to do something about the crooked and unfair tax system: it could upset a huge group of voters.
The essence of this skew is that the Netherlands does not levy taxes in a balanced manner. Work is loaded relatively heavily, power is relatively light.
The Netherlands also taxes capital erratically. Those who save and invest have a much higher tax burden than those who save their money in a private company, or have built up assets in a house or in a pension fund. (So to all readers who are upset about box 3 of the tax system: that relatively low tax burden applies not for savings and investments that are taxed in box 3.)
This unbalanced tax system disrupts the economy, distorts the housing market and drives economic differences.
First those differences. It is becoming more important again who your father and mother are in the Netherlands. “The wealth of children is increasingly related to the wealth of their parents, especially at the top of the wealth distribution,” writes the CPB.
Even before the inheritance, children of wealthy parents are often richer than their peers. For example, the chance of purchasing a nice home is greater if you bring money from your parents.
The historically large inheritance of the baby boom generation that is coming will probably cause that difference to grow. The Netherlands also taxes these inheritances unevenly. The very richest in particular can arrange it in such a way (via private limited companies) that they pay less inheritance tax.
Talents
Well, economic differences are not necessarily bad. As long as they are “a result of talent, effort and entrepreneurship, they contribute to prosperity,” according to the CPB. But “if opportunities are increasingly determined by the place where the cradle is located, this is detrimental to prosperity.” Smart people and talents who were not born rich are then less able to develop themselves and drive the economy through their success.
Concentration of economic power has more risks: it reduces the dynamics of the economy. And wealthy individuals and powerful companies can influence politics to serve their interests instead of seeking as much prosperity as possible for everyone. I would say: look at the tech bros in the United States and you will see what the risks are.
Getting the super-rich to contribute is a problem in more countries. They know how to organize their assets in such a way that their tax burden is low. However, the Dutch tax system is disruptive to the economy in a broader way. A smart country spreads the tax burden over labor and capital, the Netherlands does not do that. This makes retirement or investing in real estate more lucrative than investing in education and career. You don’t have to have studied economics to feel that this does not make a country more dynamic.
There has been a pile of well-thought-out advice about working less for years to tax and power a little more. Also because this large difference in tax burden is self-reinforcing, he noted an investigation by officials.
Moreover, the tax burden on work will naturally become even higher due to the aging population. After all, the group of workers is becoming smaller, while health insurance premiums continue to rise. At the same time, the amount of power is growing. The Dutch tax mix is placing increasing pressure on a shrinking part of the economy.
Middle class
Within the middle class, the tax burden on wealth is also unevenly distributed. Most assets in the Netherlands are in houses and pension funds and both are taxed relatively low. For example, a tenant in the private sector, who invests his savings, may have a much higher tax burden than a homeowner with equity.
That is not only strange and unfair, it makes the housing market a difficult fortress to conquer for people without wealthy parents. The CPB once again lists the disadvantages of the low tax on housing wealth: it drives up house prices without leading to more homes. The victims are young people who are looking for their first home and people who earn too little to buy a house and too much for social rent. These tenants often have higher housing costs.
A tax system that is so inconsistent also invites people to game it. Anyone who is smart or can hire a tax advisor can arrange a lower tax burden for themselves.
In short, how the Netherlands taxes is a mess. In their interim agreement, CDA and D66 wanted “a better balance” between the burden on labor and on capital. The CDA was brave enough to change its position in 2025: the party wanted to simplify mortgage interest deductions to make the housing market more accessible.
The VVD stopped it all. The result: damage to the economy, a housing market that is difficult to access and more inequality of opportunity. While you’re with the same tax burden can make the economy and the housing market work better and more fairly.
You know what the aftertaste is for me? That the lucky ones, those who already have a better starting position, get an extra push through the tax system. While fighting is more difficult. As if one person gets to drive a Ferrari on a brand new highway all their life and the other drives a Fiat on a road full of potholes.
