So they spend hundreds and hundreds of millions a year on illegals, paying their welfare, paying for some with 3 and 4 wives and 10 kids, and now they face collapse. Like Duh! It gets worse…
The Netherlands is about to commit financial self-destruction. Their parliament just passed a 36% tax on unrealized gains for investments. This will cause wealthy people to move to another tax jurisdiction. People will avoid launching a new business. Stock market investing will dry up. There is too much downside risk, very little upside potential. The govt is confiscating most of the potential upside, but leaving the investor with the downside risk. The politicians know this, they have discussed it and they are concerned about it. But they did it anyways to close a short term budget gap of roughly $2 billion. As with other countries that attempted a wealth tax, it will likely backfire and result in less tax collected after wealthy people leave. The results will be so negative, the govt will reverse course within a few years. But by then the damage is already done. – Wall St Mav
- You buy a stock at $900, it raises to $1000. Tax is $36. But, stock dips, now your stock is $800, but you still owe $36, now your investment is $764. Now, say market raises back your investment to $1000, now the “gain” is $236 even though in reality you’ve gained nothing. $236 at 36% is $85 in taxes. Then stock does what stock does and dip your investment down to $800 again. But you have to pay $85, so now you’re investment is $715. Repeat. You lose both short-term and long-term. This is why unrealized gain is pure robbery.
- Let’s take inventory: European politicians want permanent power. To achieve permanent power they want to bring in third worlders to make them citizens. Third worlders are low skilled and don’t fill the coffers but commit significant crime and rape. Politicians pass heavy tax burden onto the native European population. Native European population leaves. Politicians look to corporations for taxes. Corporations pass taxes onto cost of goods and services for remaining population. Quality of life destroyed. Oh and all this in an AI emergent world. What is the limit for Europeans? What is the point at which any action, any protest, anything will be done? – Dark Revere
- Taxing unrealized gains is like taxing crops before harvest. It sounds good in a budget meeting. It feels very different in real life. If you’re serious about wealth, you don’t just diversify assets. You diversify jurisdictions. – Mustard Mindset
- More like a few months. France under Hollande tried a billionaires tax and had to repeal 3 months later because the rich were leaving in droves.
- Rather than get rid of the extra load of immigration and other liberal policies that have cost billions off their books they would rather do this. Make it make sense. – Sam
Key Details on the Dutch Tax
- How It Works: Under the new rules, taxes apply annually to the net return on investments like stocks, bonds, cryptocurrencies (e.g., Bitcoin and Ethereum), and certain other assets. This includes unrealized gains—the increase in an asset’s value from January 1 to December 31 of the tax year—even if you haven’t sold anything. Any dividends, interest, or rental income are added to this. Debts and losses can offset gains, with unused losses carried forward to future years (but not backward). For example, if you hold €100,000 in crypto that appreciates by €20,000 in a year (without selling), you’d owe tax on that €20,000 gain minus offsets.
- Rate and Threshold: A flat 36% rate applies to net returns above a €1,800 tax-free allowance per person (or €3,600 for fiscal partners). This is higher than many capital gains taxes elsewhere and doesn’t scale with income brackets.
- Scope and Exclusions: It covers most investment assets but excludes primary residences, pensions, and certain small business holdings. Real estate (beyond primary homes) and alternative assets like NFTs or DeFi could be included, though valuation complexities might arise.
- Transitional Period: Until 2028, the Netherlands uses a bridge system with presumed returns (e.g., 6% on investments for 2026, taxed at 36%), where you can claim refunds if actual returns are lower. There’s already pushback, with coalition parties discussing ways to end or adjust the unrealized component due to budget concerns and fears of economic harm.
- Potential Impacts: Proponents say it promotes fairness and complies with court rulings against the old system. Detractors, including in the X thread, highlight risks like discouraging long-term investing, forcing asset sales to pay taxes during volatility, and prompting high-net-worth individuals to relocate (e.g., to Dubai or Singapore). Estimates suggest it aims to close a short-term budget gap but could backfire by reducing overall tax revenue if capital flees
This approach is uncommon globally because taxing unrealized gains can lead to liquidity issues—you might owe taxes without having cash from a sale. Most countries tax capital gains only upon realization (sale), though wealth taxes (below) implicitly capture unrealized appreciation by taxing net asset values.Examples of Nations That Tried Similar TaxesDirect taxes on unrealized capital gains are rare, but several countries have implemented annual wealth taxes, which effectively tax unrealized gains by levying a percentage on the total value of assets (including appreciated but unsold ones) minus liabilities. These often target high-net-worth individuals and have mixed results, with many repealed due to administrative burdens, capital flight, and lower-than-expected revenue. Here’s a summary of notable cases:
|
Country
|
Tax Details
|
Outcome and Timeline
|
|---|---|---|
|
France
|
Annual wealth tax (Impôt de Solidarité sur la Fortune) of 0.5%–1.5% on net assets over €1.3 million, including unrealized gains via asset valuation. Focused on real estate and investments.
|
Introduced in 1982; generated revenue but caused capital outflows (e.g., to Belgium or Switzerland). Repealed in 2018 and replaced with a real estate-only tax due to economic drag and exodus of wealthy residents. Estimated to have driven out 60,000 millionaires over 15 years. |
|
Sweden
|
Wealth tax of up to 1.5% on net assets over ~$200,000 (adjusted), capturing unrealized gains through annual valuations of stocks, property, etc.
|
Enacted in 1947; led to asset hiding, emigration of entrepreneurs (e.g., IKEA founder Ingvar Kamprad moved to Denmark), and reduced investment. Abolished in 2007 after revenue fell short and economic studies showed it stifled growth. Post-repeal, Sweden saw increased wealth accumulation and entrepreneurship. |
|
Norway
|
Current wealth tax of 1.1% on net assets over ~$170,000 (2023 threshold), including unrealized gains on global assets like stocks and crypto.
|
Introduced in 1892; still active but controversial. Recent hikes (to 1.1% in 2022) prompted an exodus of billionaires (e.g., to Switzerland), with over 30 leaving in 2022 alone, reducing tax revenue. Government persists despite backlash, citing social equity. |
|
Spain
|
National wealth tax of 0.2%–3.75% on net assets over €700,000, plus regional variations; includes unrealized via valuations. Revived after financial crisis.
|
Reintroduced in 2011 (after temporary repeal); generates modest revenue but faces avoidance through asset shifts to exempt categories or relocation. Still in place, but studies show it reduces savings and investment without significantly curbing inequality. |
|
Germany
|
Wealth tax of 1% on net assets over certain thresholds, similar to others.
|
Enacted post-WWII; ruled unconstitutional in 1995 and abolished in 1997 due to valuation difficulties and economic inefficiencies. Led to capital flight beforehand; repeal boosted investment. |
|
Switzerland
|
Cantonal (regional) wealth taxes of 0.1%–1% on net global assets over ~$50,000–$200,000 thresholds; captures unrealized gains. No federal wealth tax.
|
In place since the 19th century; varies by canton but generally low rates minimize flight. Still active and revenue-positive, though high-net-worth individuals negotiate lump-sum deals. Seen as more successful due to federalism and low burdens. |
|
Austria
|
Wealth tax up to 1% on net assets.
|
Introduced in 1954; abolished in 1994 after it failed to generate expected revenue and encouraged offshore holdings. |
|
Denmark
|
Wealth tax of 1% on net assets over thresholds.
|
Enacted in various forms; abolished in 1997 due to administrative costs outweighing benefits and capital outflows. |
Other nations like Colombia (temporary wealth tax post-2018) and Argentina (one-off in 2020, now recurring) have tried versions, often with short-term revenue boosts but long-term evasion issues.
In the U.S., proposals for taxing unrealized gains on billionaires (e.g., by the Biden administration) have stalled in Congress due to similar concerns.
Overall, history shows these taxes often underperform expectations, with 9 out of 12 OECD countries that had them in 1990 repealing by 2021.
