Freezing tax bands will cost high earners up to €112 a year

The cabinet’s decision not to raise the different tax bands in line with inflation next year will cost Dutch families up to €112 a year, ING bank economists have calculated.

The measure, which will generate €1bn for the treasury, is widely expected to be published on Tuesday along with the rest of the government’s 2014 spending plans.

The decision to freeze the tax bands is one of a package of measures ministers hope will raise €6bn to reduce the budget deficit.

Households with an income of below €19,000 will not be affected. Those earning €19,000 to €56,000 will be €16 worse off and higher earners will be hit more heavily, the ING economists say.

The Dutch top tax rate of 52% starts at earnings over €55,991. The rate for earnings of €19,645 to €55,991 is 42%.

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