The current four income tax brackets should be replaced by two lower rates of 37% and 49% and paid for by limiting mortgage tax relief, higher tax rates on private pensions and another hike in sales tax (btw).
The politically-sensitive changes to the tax system are set out in a report by the Van Dijkhuizen commission, presented on Wednesday to the caretaker government, reports the Financieele Dagblad.
The commission, led by NIBC bank CEO Kees van Dijkhuizen, recommends tax of 37% for annual incomes up to €62,000 and 49% for higher incomes.
To off-set this reduction, the commission says btw would be raised by a further 2% above the recent increase to 21%, says the FD.
Pensioners with a private pension would pay higher income tax and lose their tax relief on pension premiums. This group has so much more wealth than younger generations the commission says it is reasonable to tax them more heavily than is currently the case. It would also finance the growing cost of an aging population.
Home-owners would only receive mortgage tax relief for thirty years, with the amount of interest decreasing each year. The price of rented accommodation would rise in line with inflation, to encourage high earners to buy their own homes.
The commission reports that in the long-term the changes to the tax system would create 140,000 extra jobs, says the FD.
A good idea? Let us know in the comment box below.
Thank you for donating to DutchNews.nl.
We could not provide the Dutch News service, and keep it free of charge, without the generous support of our readers. Your donations allow us to report on issues you tell us matter, and provide you with a summary of the most important Dutch news each day.Make a donation