Social Affairs Minister keeps wealth tax raise on table amid social security cuts debate
Minister of Social Affairs and Employment Hans Vijlbrief said higher taxes on wealth should not be ruled out. They could reportedly be an option if the government cannot reach agreement on planned multibillion-euro cuts to social security.
Negotiations between the Cabinet, trade unions, and employers over social security have been difficult. The planned cuts to the social security budget would affect areas including the state pension (AOW), unemployment benefits (WW), and disability benefits (WIA). Proposals include shortening the maximum duration of unemployment benefits and reforming disability benefits to reduce spending. They also include possible changes to pension-related policies and healthcare costs aimed at lowering government expenditure.
In an interview with Financieele Dagblad (FD), Minster Vijlbrief said he wants to keep the option of raising wealth taxes on the table while negotiating a social agreement with trade unions and employers. He said the final agreement may not deliver the savings amounts listed in the coalition agreement’s appendix, meaning another way would have to be found to cover the costs. “A higher tax on wealth should not be a taboo,” Vijlbrief said.
Vijlbrief also said he would prefer finding additional revenue rather than cutting other government plans. “Then you get a Cabinet that does nothing on either side. I would rather have a Cabinet that does something on both sides,” he said.
He pointed to the government’s plan for free childcare as an example of a policy he wants to protect. “I personally think that we are more or less obliged to finally do this now,” Vijlbrief said.
Coalition partner VVD does not support higher taxes on wealth as a general policy. The party has previously said the multibillion-euro spending cuts must go ahead. Vijlbrief said he understands that position, “but there are also things that we as D66 do not want.”
Earlier this year, the Bureau for Economic Policy Analysis (CPB) said the Dutch tax system has failed to reduce wealth inequality and, in some cases, has widened the gap between rich and poor. The government advisory body found that the wealthiest households saw their incomes grow far faster than those of the rest of the population over the past decade.
