This is misleading. The 49.5% tax in the Netherlands is on income above €75,518. Billionaires rarely make the bulk of their money as income.
We don’t have a capital gains tax, instead there is a tax on capital that’s based on expected return on that capital. It’s about 1% on money in bank account and about 6% on stock and other investments.
Same for Germany. It’s income taxes (everything above ~66k/year is 42% taxes and everything above ~277k/year is 45%) no capital gains taxes (they are 25% no matter the amount of capital gains) or asset taxes. Don’t know where the 47% are coming from.
Also misleading, the US gives trillions of tax dollars to the wealthy who are paying nothing. Usually it is in corporate welfare, but a couple years ago they were paid directly.
Dude, I have much of my savings for retirement invested in stocks (ETF’s, it’s a fairly safe investment) since the social security in my country kinda sucks. My return on investment is 5% a year. Having a 6% tax actually means I lose money
It’s not 6% tax, the expected returns for investments are 6% and those are taxed at 36%. The first €57k (or €114k with partner) are tax free. So if you have €1M invested and have a partner, they expect you to make €60k and let you pay €20k.
You can invest in a retirement fund (managed by you, if you like) tax free from your gross salary (up to a limit). You’ll pay income taxes over your pay outs when you retire. The conditions are that you can only use it for your retirement.
The NL system which has been working for a while works by saying:
We don’t care about your capital gains, you’d just try to game the system, we’ll pretend you invest everything into a relatively safe bond scheme, and tax your capital income based on that. Meaning we tax wealth as if it was guaranteed income at 4% interest per year. If you gamble and lose, tough break, you still owe the same taxes, as you are bearing the risk on investments, not us.
Most state bonds are quite a bit lower than 4%, and even business bonds (I take bonds in some football clubs as a reference, because they tend to do quite prominent ads on them) only do 5-6%.
I just checked, the current assumed income on investments and assets in general is 6.17%. You pay a 35% tax on that income, so in effect a ~2% wealth tax per year.
The expected return part is the main tax on billionaires. With capital gain you can hold on forever and never get taxed, and if you die you completely skip capital gains tax with inheritance. Effective tax rate is near zero. This trick obviously only works for people who don’t need their invested money, buy and never ever sell.
Compare that to NL’s tax. Invested? You pay 6.17% x 32% = 1.97% on your investment account, immediately, no deferral possible, year after year. And the rate went up to 36% in 2024 to reduce passive income’s rate advantage over income from work.
Would that mean that if something was not continually growing in value you’d end up paying the value of it in taxes over some amount of years? Does this encourage people to pay the tax value out of the asset or just divest from non appreciating assets? If you paid taxes from the value of the asset I guess it’d be like a series converging to zero over time? Like 6% of 100 is 6, the 6% of 94 is 5.64, 6% of 88.36, vs. paying 6 bucks every year. Slower but sort of an eroding effect - like paying society’s subscription fee for how you got the value in the first place!
This is misleading. The 49.5% tax in the Netherlands is on income above €75,518. Billionaires rarely make the bulk of their money as income.
We don’t have a capital gains tax, instead there is a tax on capital that’s based on expected return on that capital. It’s about 1% on money in bank account and about 6% on stock and other investments.
Same for Germany. It’s income taxes (everything above ~66k/year is 42% taxes and everything above ~277k/year is 45%) no capital gains taxes (they are 25% no matter the amount of capital gains) or asset taxes. Don’t know where the 47% are coming from.
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Also misleading, the US gives trillions of tax dollars to the wealthy who are paying nothing. Usually it is in corporate welfare, but a couple years ago they were paid directly.
…and misleading for Sweden. Our capital gains tax is 30%.
Taxing expected return sounds a bit absurd. What if the capital turns out to be lost, does the state give the tax back?
Greed should be punished, pro-social vocations rewarded.
Greed is a an antisocial force more effective in its destruction than even hatred.
In practice it means that the rich pay very little tax. It’s been an ongoing debate for years, and changes are being worked on to tax actual gains.
Omg, like a tax refund? Gimme a break. Fuck the rich with a tire iron.
Dude, I have much of my savings for retirement invested in stocks (ETF’s, it’s a fairly safe investment) since the social security in my country kinda sucks. My return on investment is 5% a year. Having a 6% tax actually means I lose money
It’s not 6% tax, the expected returns for investments are 6% and those are taxed at 36%. The first €57k (or €114k with partner) are tax free. So if you have €1M invested and have a partner, they expect you to make €60k and let you pay €20k.
You can invest in a retirement fund (managed by you, if you like) tax free from your gross salary (up to a limit). You’ll pay income taxes over your pay outs when you retire. The conditions are that you can only use it for your retirement.
The idea is that if such a tax existed the social security wouldn’t suck
That’s a very delusional idea.
The NL system which has been working for a while works by saying:
We don’t care about your capital gains, you’d just try to game the system, we’ll pretend you invest everything into a relatively safe bond scheme, and tax your capital income based on that. Meaning we tax wealth as if it was guaranteed income at 4% interest per year. If you gamble and lose, tough break, you still owe the same taxes, as you are bearing the risk on investments, not us.
Most state bonds are quite a bit lower than 4%, and even business bonds (I take bonds in some football clubs as a reference, because they tend to do quite prominent ads on them) only do 5-6%.
I just checked, the current assumed income on investments and assets in general is 6.17%. You pay a 35% tax on that income, so in effect a ~2% wealth tax per year.
Does that bring in a significant amount of revenue?
If you’re taxing unrealized gains, then that would be a very significant revenue source.
The expected return part is the main tax on billionaires. With capital gain you can hold on forever and never get taxed, and if you die you completely skip capital gains tax with inheritance. Effective tax rate is near zero. This trick obviously only works for people who don’t need their invested money, buy and never ever sell.
Compare that to NL’s tax. Invested? You pay 6.17% x 32% = 1.97% on your investment account, immediately, no deferral possible, year after year. And the rate went up to 36% in 2024 to reduce passive income’s rate advantage over income from work.
Would that mean that if something was not continually growing in value you’d end up paying the value of it in taxes over some amount of years? Does this encourage people to pay the tax value out of the asset or just divest from non appreciating assets? If you paid taxes from the value of the asset I guess it’d be like a series converging to zero over time? Like 6% of 100 is 6, the 6% of 94 is 5.64, 6% of 88.36, vs. paying 6 bucks every year. Slower but sort of an eroding effect - like paying society’s subscription fee for how you got the value in the first place!
It’s almost as if people are making up lies.