Netherlands rich not getting richer, says disputed study

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Rich people in the Netherlands have not become richer in the past years. This is according to a (highly contested) study done by Leiden Professor Koen Caminada, the Volkskrant reports.

The study was commissioned by the International Monetary Fund. Caminada and his colleagues studied the incomes of the top 10 percent of Dutch households, basing their conclusions on the tax declarations of 100 thousand households in the period between 1990 and 2012.

The study shows that the this group's share in the total gross income remained relatively stable around 25 percent in that period. The researchers also looked at the top 5, 1 and 0.1 percent and determined that there were hardly any shifts in these groups. The study did not examine how the gross declaration data relates to the net income of the top earners, but the researchers did determine that the rich group as a whole paid relatively more income tax during the examined period. Caminada and his colleagues thus concluded that the rich in the Netherlands are not getting richer compared to the Netherlands' income distribution.

This conclusion is opposite to the findings of French economist Thomas Pikkety, who argues that the ruling class is getting richer. According to Caminada, Piketty's findings are true especially in the United States, but not in the Netherlands.

One of the main points on which critics are attacking Caminada's study, is the fact that the Leiden researchers did not properly include the gain of capital in their data. "They did compare to the United States, but not including capital gain is bad science", economist Robin Fransman said. "I feel vicarious shame when reading this study." According to Fransman, the top 5 percent of Dutch incomes especially build capital in their own company. The Netherlands does not tax this as income, but the United States does. When a business is sold, it is counted as an equity transaction. "That involves a lot of money - look at the this week."

 

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