Redistribution – De Groene Amsterdammer

Laura van Geest, President of the Netherlands Authority for the Financial Markets (AFM), during a public discussion in the House of Representatives on financial stability in the Netherlands

© Robin Utrecht / ANP

Could it be because journalists are becoming a little jaded to the gruesome facts of wealth inequality, tax evasion, flamboyant wealth? Or was it because it was presented on the first day of the political break? (Which, by the way, cannot possibly be a coincidence.) In any case, the report on the Dutch distribution of wealth, made under the direction of Laura van Geest, only made it to a few two-columns. Although it is quite shocking reading. Not so much because of the news that the peak capacities are still much higher than thought, and concentrated in an even smaller group than thought, so the differences are bigger than thought, and the increase is even faster than thought. Because it is, as sad as it is, gradually in line with expectations. Although I again rubbed my eyes about the latter, the rapid increase in power: in six years fifty percent was added.

But the real red ears when reading the report from Van Geest, chairman of the Dutch Financial Markets Authority in daily life, can be found in the appendix ‘notable tax structures’. Listed for pages are the tricks with which the wealthy ensure that they become even richer and contribute as little as possible to the common good. This time not revealed by journalists from LuxLeaks or the Panama Papers, but by an official committee. Take for example ‘Anbi’ (the public institution). You can deduct a gift to an Anbi from your income tax, but anyone who still thinks of environmental clubs or refugee organizations when they think of Anbi is hopelessly behind. Wealthy people created Anbis for their hearts to lower their income tax and to house capital tax free. Or take the savings e.g. A BV, which serves only to store capital, benefits from all tax advantages for entrepreneurs, because a BV.

It’s more than a penny, it’s a lot of money

This continues for pages. It is said that they were also somewhat horrified by all this creativity of the wealthy when they studied at the Ministry of Finance. Which in itself is remarkable because the committee has collected the described constructions through employees of Tax and Customs, which belong to the same ministry.

One of the most striking aspects of Rutte IV’s coalition agreement is that it says nothing about wealth inequality, while it is among the largest in the world. Thanks to Van Geest, the cabinet can make up for that omission on budget day in one fell swoop, because the report is full of proposals for a fairer wealth policy. And it is certainly not just about fighting tax evasion, because the current wealth distribution and the lightning-fast capital growth have also been created thanks to the government’s policy, says the committee. The committee also offers the ultimate cross-party argument for action: high wealth inequality is bad for the economy.

Suddenly I thought of high school discussions about rich and poor. According to some classmates, whom we simply referred to as VVD members, redistribution made no sense at all. Because there were so few rich people that whoever was poor would at most get a ‘shilling’ (you still had those back then) if the wealth was distributed. Then you might as well leave the money with the rich. I didn’t do the math at the time, but for those who sometimes find themselves in such a discussion, here’s the math today. Dutch households own a net amount, i.e. after deduction of (mortgage) debt, of DKK 3325 billion. EUR. The Van Geest committee adds that it is probably still a significant underestimation because, for example, cryptos and expensive boats are not included in the picture, nor is part of the capital located abroad. Also, a lot of capital in companies is not included. At least 3325 billion. Disregarding pension assets, it amounts to 1800 billion euros. More than sixty percent of this is now in ten percent of households. A quarter is even owned by only one percent of households. Most households have virtually no assets or net debt. If you were to divide the wealth between all eight million households, each household would have 415,000 euros. Excluding the pension assets, it is 220,000 per household. Net, all debts have already been paid. It’s not just more than a penny, it’s a lot of money.

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