DutchNews.nl - Widespread welcome for new tax plan, but coalition partners silent

Plans to completely overhaul the Dutch tax system, drawn up on behalf of the outgoing government, have been widely welcomed, according to media reports on Wednesday.

The plan involves reducing tax break on mortgages in return for lower income tax. Other tax deductions should also be cut or scrapped and value-added tax (btw) should go up to 8% and 23%, the plan's creators say.

The plan involves reducing the current four tax bands to two, and would introduce a top rate of 49% from €60,000 a year. The current top rate is 52%.

However, MPs from the VVD and PvdA - the two parties currently involved in talks on forming a new government - declined to comment so as not to prejudice the negotiations.

Elbert Dijkgraaf of the fundamentalist Christian party SGP told the NRC: 'The report shows it is possible to scrap tax deductions and reduce income tax while maintaining spending power.'

While welcoming the plan as a whole, the Liberal democratic party D66 said it did not agree with plans to increase the tax on freelancers and the self-employed. 'These are difficult economic times and many people start for themselves because they cannot find a job,' the party said.

The Volkskrant says the plan has good news for the VVD and Labour. Calculations by the government's macro-economic planning bureau CPB show the tax plan would breathe new life into the housing market and lead to the creation of 140,000 new jobs.

'This a a goodie for both the VVD and PvdA,' the commission chairman Kees van Dijkhuizen said. He hopes the recommendations will be included in the cabinet formation talks.

Readers' Comments

Top band is 49% for higher salary then 6000 and what is lower band for lower then 60000?

By Peter | 17 October 2012 7:46 PM

More trickel down economics. Lowering the top rate by 3% at the cost of drastic increases for normal people in BTW taxes, fewer deductions, and much higher income tax rates. Complete BS.

By Robert | 17 October 2012 8:42 PM

this is nothing more than a redistribution of the tax burden from those without debt to those with debt. a change to something long term like mortgage relief can only be changed gradually over the same natural timescale of the system, for mortgages, this is about 15-20 years. otherwise brace yourself for a collapse in the housing market.

By a | 18 October 2012 8:02 AM

It is 'difficult times' and still they wanna raise vat. I wonder besides raising tax what do gov know about. Once other tax deductions are gone, they will raise the income tax rate again.

By ufo | 18 October 2012 8:42 AM

How many people earn more than 60k per year?? And how many people instead will have to pay 23% of VAT?
It looks the same receipe...

By Alessandro I | 18 October 2012 9:43 AM

I know if the BTW goes up to 23% there are a lot of folks that will be out in street and I won't be far behind. How about giving the poor guy a brark?

By dee | 18 October 2012 5:04 PM

I have to agree with ufo.I know if the BTW goes up to 23% there are a lot of folks that will have to think twice before buying anything. How about giving the underdags a break?

By dee | 18 October 2012 5:45 PM

I agree with the plans that not even those on the top should have to immediately give away more than half their income.

BUT, this should NEVER be at the cost of increasing taxes for everyone! It should simply stay at 52%, and be changed to 49% only when the economy has improved and this is possible without making life more expensive for the poor (in fact, for everyone).

I'm not someone who says "the rich must pay for everyone!". But I AM opposed to the rich given the ability to become richer at the cost of everyone else.

By Someone | 18 October 2012 6:25 PM

if it still matters (after a candidate wons election) , rutte promised to cut the size of givernment (at least reducing number of representatives in lower and upper house).

is he gonna pursue that or it was just an election scam? let's see

By dork | 18 October 2012 6:53 PM

As it’s not in the article, if they scrap mortgage relief, this is what the new non-gradiated 37% income tax does if earning 0-60k...

If you’re on 30k or less, you’ll have less money after tax with the new system.

If you’re on 35-55k and DO NOT have a mortgage, with a 13 month (holiday) calendar you’ll have between 5-82 euros more a month after tax.

If you’re on 35-55k and DO have a mortgage, it’s 4 times your salary, 4% interest, you’ll have approx 190-225 euros less a month.
A mortgage five times your salary, 4% interest rate, you’ll have 240-300 euros less disposable income a month.

By eejit | 18 October 2012 7:13 PM