In a recent radio broadcast by BNR Nieuwsradio, Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, gives his view on the 2023 tax plan discussed in the Dutch parliament last week. This tax plan has proposed increasing the profit and wealth tax to reduce the tax burden on labour.
Kavelaars begins his story by arguing that it is unwise to take a lot of money away from profits and assets. There, according to him, is not much money to be taken away from. Only a very small group of the population has large assets that are taxed relatively low: the substantial interest holders. They own large packages of shares in their own companies and are taxed relatively low on them. Should more income redistribution be desired, the Professor recommends taxing that group more heavily.
In contrast, significantly increasing the wealth tax leads to double taxation, according to Kavelaars. This means that income that has already been taxed will be taxed again, which is economically undesirable. Moreover, the professor notes that wealth distribution in the Netherlands has not worsened at all over the past fifteen years.
Finally, Kavelaars addresses the view that multinationals would leave our country if the profit tax was raised even more. He argues that such a threat is often unrealistic, as few multinationals follow through.
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You can listen to the full broadcast from BNR Nieuwsradio, 17 October 2022, here.
