Dutch Tax Plan Deal Between D66, CDA and Pro and Volt, Digi Mart USA News (Netherlands): Coalition parties D66 and CDA have reached a deal with opposition parties Pro and Volt on a tax increase for wealthy residents and a tax cut on wages.
Pro leader Klaver called the agreement “a breakthrough.” He said the parties had worked in good faith over recent days to find a compromise to make the Netherlands fairer. “If this proposal is adopted, the Netherlands will get a millionaire tax,” he said.
The deal concerns an amended version of what Pro and Volt call the “millionaire tax,” an adjustment to the government’s Tax Plan 2027. Under the version now agreed, 1 billion euros more would be taxed from wealthy residents, and the same amount would be removed from income tax.
It appears a majority in the House of Representatives could support the adjustment. However, it is not yet clear whether this will break the coalition out of its impasse, or whether the tax plan as a whole will secure a majority in both the House of Representatives and the Senate.
The VVD raised major objections during the debate on the tax plan to Pro’s original proposal. According to the VVD, it conflicts with coalition agreements and with the financial basis for the revision of box 3.
The party said it was “unthinkable that this proposal in this form would be supported by one of the coalition parties.”
Pro’s original proposal would have raised top rates in box 2 and box 3 to fund a higher general tax credit for workers. In total, it involved a shift of 1.5 billion euros.
Votes on the tax plan and all proposed amendments were scheduled for tomorrow. However, because developments are still ongoing at the last minute, those votes will likely be postponed until next week.
In principle, it is possible that the D66, VVD and CDA coalition votes for the tax plan while the VVD votes against Pro’s amendment. The parties have agreed they may break with each other in the final vote if necessary.
The Tax Plan 2027 is how the central government collects money from citizens and businesses, which then funds spending on health care, social security, roads, public transport and schools. Most taxes are fixed because most political parties agree with them.
The central government expects to collect 480 billion euros in taxes in 2027. Most of this comes from wage and income tax, value-added tax (VAT), health insurance premiums, corporate tax, state pension premiums and employee insurance premiums such as unemployment, disability and sickness benefits.
The political debate concerns relatively small shifts and changes, which can nonetheless be highly principled. A plan involving only 1.5 billion of the 480 billion euros, such as Pro’s “millionaire tax,” can still lead to significant political discussion.
