This is misleading. The 49.5% tax in the Netherlands is on income above €75,518. Billionaires rarely make the bulk of their money as income.
We don’t have a capital gains tax, instead there is a tax on capital that’s based on expected return on that capital. It’s about 1% on money in bank account and about 6% on stock and other investments.
Same for Germany. It’s income taxes (everything above ~66k/year is 42% taxes and everything above ~277k/year is 45%) no capital gains taxes (they are 25% no matter the amount of capital gains) or asset taxes. Don’t know where the 47% are coming from.
The expected return part is the main tax on billionaires. With capital gain you can hold on forever and never get taxed, and if you die you completely skip capital gains tax with inheritance. Effective tax rate is near zero. This trick obviously only works for people who don’t need their invested money, buy and never ever sell.
Compare that to NL’s tax. Invested? You pay 6.17% x 32% = 1.97% on your investment account, immediately, no deferral possible, year after year. And the rate went up to 36% in 2024 to reduce passive income’s rate advantage over income from work.
Would that mean that if something was not continually growing in value you’d end up paying the value of it in taxes over some amount of years? Does this encourage people to pay the tax value out of the asset or just divest from non appreciating assets? If you paid taxes from the value of the asset I guess it’d be like a series converging to zero over time? Like 6% of 100 is 6, the 6% of 94 is 5.64, 6% of 88.36, vs. paying 6 bucks every year. Slower but sort of an eroding effect - like paying society’s subscription fee for how you got the value in the first place!
Taxing expected return sounds a bit absurd. What if the capital turns out to be lost, does the state give the tax back?
Dude, I have much of my savings for retirement invested in stocks (ETF’s, it’s a fairly safe investment) since the social security in my country kinda sucks. My return on investment is 5% a year. Having a 6% tax actually means I lose money
The NL system which has been working for a while works by saying:
We don’t care about your capital gains, you’d just try to game the system, we’ll pretend you invest everything into a relatively safe bond scheme, and tax your capital income based on that. Meaning we tax wealth as if it was guaranteed income at 4% interest per year. If you gamble and lose, tough break, you still owe the same taxes, as you are bearing the risk on investments, not us.
Most state bonds are quite a bit lower than 4%, and even business bonds (I take bonds in some football clubs as a reference, because they tend to do quite prominent ads on them) only do 5-6%.
Wow, this is just entirely wrong. Completely and utterly wrong.
Sweden has a maximum of around 55% income tax bracket if you’re in a municipality with high income tax, but billionaires never are and as such would be taxed probably at most 50% income tax bracket.
This is of course entirely irrelevant because billionaires don’t make their money on income. Sweden has fairly low capital gains taxes - 30% on regular accounts, and a special account that taxes the whole account value by a low percentage, which shakes out in average years to even lower taxes on capital. This assumes you even keep your capital in the country, which is a big if.
There’s also no inheritance tax, no gift tax and no property tax. Sweden is actually an unusually good place to be a billionaire as far as taxation goes, and a below average place to earn a high salary as far as taxation goes.
Sweden has fairly low capital gains taxes - 30% on regular accounts,
That’s twice the American rate.
57% is the tax on “one-time gains” - bonuses and other such things.
This means that you’re probably overpaying on it, but you might also be underpaying on your income taxes (usually ~30% even if you reach the ~50%-tax bracket). Worst case scenario, you’ve lent some money interest-free to the government that you get back on your tax returns.
You can borrow from someone else. When someone else borrows from you, you lend it. Or lent as the past tense
Correct, but there are those that would take this as a source of truth and run with it. It’s not the smart thing to do, but we already see people doing this sort of behavior on other social media.
We shouldn’t enable the problem, even if it’s an innocent mistake
The point of the meme is to highlight that rich people should be taxed more
You can’t include bracket taxing, asset taxing etc in a commit meme format.
If people get their facts off memes, they indeed have a problem but you can’t accommodate for all who arent critical of their knowledge sources
Billionaires in Europe “evade” taxes just like every other billionaire. Most of their wealth is assets, which is why their tax rates don’t seem right if you don’t understand how economics works.
In the NL you do, there is a wealth tax. IDK how effective it is, but at least they are trying.
As others have pointed out, this is pretty disingenuous. Some (all?) of the others are quoting marginal tax rates — and the US stacks up nicely on this front, at least in progressive states: max federal marginal tax rate is 37%, with California having a 14.4% max marginal rate. So apples to apples, the US would be 51.4%.
The problem, obviously, is that nowhere in the world do billionaires make their money through “normal” income.
Wrong.
Those are income taxes for people with high salaries.
No billionaire earns the bulk of their money as taxable income. None of these countries tax billionaires the way the meme implies
