Think tank suggests major tax reform to reward work and promote sustainability

A collection of proposals from think tank The Ex'Tax Project includes ideas like reducing income tax and insurance premiums so that employees can take home more pay, and employers can spend less on their workforce. The organization put forward over 20 suggestions in a new study to decrease the burden on workers. The think tank suggests taxing emissions, pollution, and energy consumption more heavily to compensate for the lost revenue and to make the Netherlands more sustainable.

Almost all parties have included in their election programs that work should yield more money, according to The Ex'Tax Project. The think tank believes that this tax shift brings us closer to that goal.

The Ex'Tax Project also proposes that employers should only need to pay long-term sick employees up to the age of 55 for one year instead of two, with the state covering the second year. This change would save costs for employers without reducing income for employees who are ill for an extended period. The number of employees reporting sick has been high for several years.

The think tank also wants all workers in the Netherlands to start accruing pensions, and for freelancers to pay premiums just like employees do. They should also be entitled to benefits if they become unemployed, sick, or disabled. The idea is for allowances to depend on the average income and wealth over the past three years. The Ex'Tax Project suggests lowering administrative burdens for employers by simplifying payroll declarations for some workers, for example.

Employers could use the savings from measures like these to make their businesses more sustainable. "High labor costs are a barrier to sustainable and labor-intensive activities," says The Ex'Tax Project.

The Tax Authorities (Belastingdienst) itself should also be reformed, according to the think tank. The government should invest more in the Tax Authorities and replace outdated IT systems with new ones.

The Netherlands does not have to implement such measures alone. It is important to coordinate policies with other EU countries, The Ex'Tax Project believes. The Netherlands can exert influence in the EU by aligning with countries that have similar goals and by initiating studies on the impact of the tax system on good employment practices.