Destinations Magazine

Inequality in the Netherlands: A Capital Issue

By Stizzard
Inequality in the Netherlands: A capital issue

IF THERE is one country that is proud of its efforts to fight inequality, it is the Netherlands. Dutch pre-tax incomes are by some measures nearly as skewed as America’s, but once the government has chopped them up and passed them around, they are among the world’s most egalitarian. Yet when it comes to wealth, researchers have found that the distribution is among the most unequal in Europe. This and Thomas Piketty’s book “Capital in the 21st Century” have kicked off a new debate over inequality in the Netherlands.The stage was set last year, when an official commission suggested that the Netherlands should cut income tax. Currently the 42% bracket starts at just €33,364 ($ 45,387) a year, and the 52% bracket at €56,532. But other tax breaks favour wealth. There is no capital-gains tax; instead, there is a 1.2% fixed tax on financial assets over €21,139. And mortgage interest is tax-deductible, a big advantage for high earners with large houses. A report this month by the Scientific Council for Government Policy duly found that the top 10% of Dutch households own 61% of the country’s net wealth. That is short of America’s 75%, but it is hardly…

The Economist: Europe


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