The impact of the 36% tax on unrealized gains for the average Dutch investor:
• No starting capital
• €200 monthly contribution
Their long term returns drop 40% if this bill passes.
This could become one of the biggest destructions of future wealth in Dutch history.
You’re a Dutch citizen.
• You’re working your butt off to invest for the long term
• You eat ‘boterhammen’ and ‘stamppot’ to invest even more
• You’ve compounded nicely for years
• You built your portfolio to $300K
• You have a $15K emergency fund
• 95% of your net worth is in stocks
<INSERT 36% TAX ON UNREALIZED GAINS>
• Your portfolio grows +20% ($60K) and is now worth $360K
<GEKOLONISEERD>
• You now owe the state $38.4K in tax, due 5 months after year end
• But you don’t have that cash
• You invest in SaaS stocks
• Your portfolio drops 30% in a matter of months
• Your portfolio is now worth $252K
• The tax bill is due
• You’re forced to sell $38.4K to cover it
• Your portfolio drops to $213.6K
You just paid tax on gains you no long have and were forced to sell at the worst possible time to fund it.
Make it make sense.
The Dutch government is destroying long term compounding by introducing a 36% tax on unrealized gains.
As a Dutch citizen and long term investor, I’m at a loss for words about the lack of vision behind this new tax. I normally don’t post anything politically related, but what our government is planning to do is disastrous for long term investors.
This is the sad truth.
Most people here start investing to protect themselves against inflation and ever rising pension ages. They’re trying to put hard earned money to work, hoping they can retire before the age of 71. And they had a real shot at that before this bill.
If you started at 25 with €10,000 and contributed €1,000 every month, you could compound to €3,320,000 over 40 years. If you lived prudently, you could retire early and live off it for the rest of your life.
With the new capital tax? After 40 years of compounding, you’d end up at €1,885,000. That’s a €1,435,000 difference.
This tax denies generations the chance of early retirement, punishes those who take risks, and introduces severe liquidity issues for people who have been compounding successfully for years. And to what end? To fill a €2.4 billion tax hole.
I’m beyond words.
If you’re Dutch like me, please share this visual with fellow investors to increase awareness.
Hopefully we can make our politicians understand the severity of this tax, and the breadth and depth of its destructive implications.
~ Jan
@InvestingVisual While not a Dutch citizen, I've lived here since birth, and was planning on staying after I finished my studies... if this goes through, I am seriously considering leaving the country after I graduate.
I've already signed the petition; are there other things we can do?
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@Rosaelegonza @Cookiechip3@xJ_Takax Indeed they are, but Kinich's previous VA was a non-union VA, meaning they fundamentally weren't striking. Striking without a union is (legally) basically just skipping work.