Professor Bas Jacobs on rising energy costs and a new capital tax

Rising energy costs

Jacobs argues that it is very unwise to compensate everyone in society for the rising energy costs. Because we are massively importing oil and gas from other countries, everyone in our society is negatively affected by the rising energy costs. An ambition to compensate everyone will thus mean that we have to borrow from future generations to compensate the current generation.

Political climate

The Professor states that this call for compensation fits in the social and political climate we are currently living in, where dealing with pain and responsibility is no longer accepted. Since we are increasingly experiencing very small political majorities, the government has become more willing to draw the purse strings to prevent the disintegration of the fragile political majority. Although the interest rate is currently very low, this is no excuse to spend money inefficiently. The Professor refers to the government’s climate reforms, he states that polluters are currently not paying for their pollution, but they are being paid by us with 35 billion euros. The Professor questions whether this is the most efficient policy with the lowest costs for society.

New capital tax?

Left-wing opposition has released plans in which they advocate a new capital tax. Jacobs explains that several aspects of this capital tax bother him. He - and with him many other economists and tax experts - argues that we should not tax capital, but instead tax the gains from capital. This will result in less economic damage and a more fair policy.