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If you think that's bad, wait until you have savings. Instead of taxing interest earnings as income they assume you earn 4% on your capital and tax that at, say
by radicalbyte 11y ago
If you think that's bad, wait until you have savings. Instead of taxing interest earnings as income they assume you earn 4% on your capital and tax that at, say, 50%.
The banks are now paying 1%-1.5% but you still have to pay the tax man 2% - so your capital actually goes down. It's an implicit negative interest rate.
So people like me who didn't get a 6x mortgage* and live frugally end up subsiding my Audi-driving, 6x mortgage, overspending & debt-heavy "friends". The same people who have cause this situation by their dangerous borrowing.
* houses are how you fix this: the value in the house isn't seen as capital so it's not taxed, plus you can deduct interest payments from income taxes; i.e. the entire system is designed to increase property values.
- radicalbyte 11y agoJust got an email from my bank: interest is reduced from 0.95% to 0.85%. So I'm paying the tax man 1.15% APR on my savings. It's almost enough to make me move back to the UK: tax there is much lower and the wages are 50% higher in my niche.
- jackcosgrove 11y agoWith those two data points, what keeps you in the Netherlands?
- radicalbyte 11y agoI'm not mobile: my wife owns a pharmacy here and our kids are settled. Otherwise I'd be either in the UK or US working for one of the tech giants right now ;)
- morgante 11y agoIn theory, I could see how you could make an economic argument for taxing people at the theoretical rate of return (incentivizing deploying your capital in value-creating investments instead of sitting on it). In practice, that is insane.
- Scarblac 11y agoIt is taxed at 40%, so it's an inherent -1.2% interest rate. Otherwise you're spot on. The "huurwaardeforfait" is just a handy political fiction to get more taxes from home owners, who are subsidized a lot because mortgage interest is deductable. It was probably politically easier to get a law for a new tax through parliament than to lower the mortgage deduction at th etime.
- pc86 11y agoIs it legal to keep the money as cash (literal cash, not in a bank at all) or do you still have to declare it as savings? Not sure what inflation is like for you but it's sub-1% in the US so if yours is comparable and you don't have to declare that type of savings you'd probably come out marginally ahead.
- bartvk 11y agoYou'll have to declare it. Of course you can evade that, with physical gold coins or what have you, but that's a lot of hassle for not a lot of money.