Is wealth inequality in the Netherlands the second largest in the Western world?

Is wealth inequality in the Netherlands the second largest in the Western world?

This article was produced in the context of the joint AD, Nieuwscheckers and Pointer (KRO-NCRV) fact-checking marathon in the run-up to the House of Representatives elections on 22 November 2023. See all the fact-checks here.

the facts

In general, wealth is about wealth. More specifically, power is ‘dThe value of all assets (including savings, real estate, and stocks) minus debts. Unlike income, equity can also be negative if debts exceed the value of assets.

Another difference is that income is real money that you can buy something with, while assets are often tied to, for example a company, land or a house. You can’t pay bills with that.

Wealth inequality is described – in Van Dale’s dictionary – as “Great disparity in the status of wealth among members of a community or community. If this difference is relatively large, it is also referred to as a wealth gap.

Power gap

The fact that there is such a wealth gap in our country is not limited to SP. Many parties in The Hague are concerned about this, because it is not entirely clear what exactly we are talking about. This led to the Cabinet ordering an investigation DrWhich was completed in the summer of 2022 by a working team of financial experts from the Netherlands Authority for Financial Markets, various ministries, the Central Planning Office, the Central Bureau of Statistics and the Dutch Central Bank.

What happened? DrOur country’s prosperity is more unequally distributed than expected. The richest 10% of the Dutch own 61% of the wealth, while the top 1% own up to a quarter of the total wealth. On the other hand, eA quarter of families are already in debt. FifthThe wealth of the richest families in particular was initially underestimated, the researchers said.

See also  Interest rates in the United States may drop soon

Favorable tax structures

One reason for this growing gap is the current tax system in which high-net-worth and high-income people pay relatively less tax. Inheritance and gift taxes also contribute to wealth inequality, mainly due to the so-called “business succession scheme” (BOR). Through this scheme, which aims to enable businesses to survive, people pay much less tax than inheritance or gift tax without a BOR. Moreover, the wealthy can benefit more from favorable tax structures and often have the means to obtain advice on this matter, the researchers reported.

Marinissen thinks it’s impossible. ,,After the United States, the Netherlands has the greatest wealth inequality in the entire Western world,” she says indignantly in the run-up to the election.

This isn’t the first time you’ve started talking about this. She and SP didn’t figure it out themselves. It has a strong source. It is based on a 2018 report by the Organization for Economic Co-operation and Development (OECD), an organization in which 36 Western countries discuss economic and social policies.

It is estimated that wealth inequality among Dutch households is greater than in all 35 other countries, except the United States. Only there is a bigger difference between the rich and the poor.

Pension assets

Marinissen says what the OECD says. But this is not the whole story. Since not all countries use the same calculation methods, calculations, and definitions, it is difficult to calculate i very preciselyConduct an international comparison of wealth inequality. For example, differences in allocations and income support measures for each country are not taken into account.

See also  Britain is preparing for Sunak's budget plans

Such as retirement assets. While in most countries people have to raise their pensions, the Netherlands (this also applies to Denmark, which ranks third on the OECD list) has Providing large-scale collective pensions. But this is not taken into account because people do not own this capital directly and cannot give it to someone else.

But that somehow doesn’t matter. Pension assets represent nearly half of total assets, according to Statistics Netherlands figures. He said that if included, the Netherlands would end up in the middle of the OECD countries CBS Chief Economist Pieter Heijn van Muehlegen wrote in an AD article earlier this month.

“Characteristic of a healthy and competitive economy”

In fact, there is no doubt that the Netherlands has the greatest wealth inequality in the Western world after the United States. However, the Hague Working Group concluded that… Our country’s prosperity is “more unfairly distributed than thought.” in In the research report, “Lights Out, Shed the Light: Wealth Distribution,” the task force notes, among other things:

“Access to wealth and some degree of wealth inequality, according to researchers, is a feature of a healthy, competitive economy.” “Entrepreneurial capacity has great social value, when this capacity exists in companies that create jobs and when this capacity is used to respond to the challenges of the future, such as sustainability,” the working group says.

But heExcessive wealth disparity also has negative effects on the economy and society, according to researchers. “A significant concentration of wealth among a small group of households can lead to economic and political power (…), to the enrichment of private interests that do not necessarily contribute to social interests (…) and to a disproportionate influence of this group concerned with public opinion and making political decision.”

See also  Yellen: The United States wants fair economic relations with China

Conclusion:

Liliane Marinissen’s statement that wealth equality in the Netherlands is the second highest The Western world is not correct in the strict sense of the word.

Leave a Reply

Your email address will not be published. Required fields are marked *