More liquidity is good, actually.
they also do not address my main point which is this would be a tax on "gains" that do not exist, based on speculative valuations that cannot be guaranteed. The proposal itself defies logic; "unrealized gains" is an oxymoron!
extreme but not impossible scenario: someone builds an apartment building near your house, suddenly your house is "worth" ten times as much but no one will buy at that price so you sell your house for much less (just coincidentally to someone politically connected) and yet still owe taxes on a "gain" that was not actually possible to realize
In this specific instance, it's easy to see how large untimely stock/crypto fluctuations could lead to similar situations. That is a foreseeable disaster; there would be unforeseeable ones as well over time.
Band-aids such as limiting tax liability to not exceed the actual sale price of the asset will not help; the tax can easily cause the destruction of the wealth it seeks to collect, and not just for the one large shareholder.
This is a door that should not be open; it is disappointing to see this Dutch action is just a replacement for an existing illogical tax, so sadly too late for the Netherlands.
This is also one of the reasons why financial crisis go out of hand so quickly, because once the value of an asset goes down, these credits become worthless as well, but rich people bought real assets with those credits, so the crisis just keep expanding to other sectors.
However, a tax an unrealized gains would seem to greatly reduce or maybe kill the chance for the poor or middle class to use investments to save enough to retire early. That seems very unfair. I do not understand why such a tax should apply to anyone not well into the upper middle class range of wealth.
And trying to make clever calculated bets on individual stocks now has risk of having to sell everything and still not having enough to pay the taxes, if they were assessed during a temporary spike in price. Even holding an index fund during a market crash could mean ending up with nothing because of the tax on fictional gains.
I work in a family office. The owner is worth around 700 millions. I wouldn't be surprised if he didn't have more than a house and a car to his name, on paper.
how would fluctuation in stock prices be handled?
if stocks go down , do you get a refund ?
this seems like a paperwork and fraud riddled method to achive a very minor impact on very few people who could be taxed directly when they access actual cash
In any case, abundance generally comes from not crossing those lines — from nonmaleficence. The US crosses those lines a plenty, but still less so than the EU, and consider how much higher its average wages are:
EU Europe average ≈ $30,500
United States ≈ $68,000
"State Secretary for Taxation Eugène Heijnen acknowledged during parliamentary debate that the caretaker government would have preferred to tax investment returns only when they are actually realized, but said this was not feasible by 2028, as taxing unrealized gains would avoid billions in budget losses and is easier to implement." <emphasis mine>
This leaves as potential taxpayers only those who cannot afford or don't want to structure their holdings via offshore entities
Paultry individual investors have it the hardest to evade and optimize the taxes actually. Oftentimes they pay double dividend tax (WHT, only partial write off because of bilateral treaty, local dividend tax) while financial institutions were receiving... double refund of WHT (CumEx scandal).
Europe has a different system , the broker doesn't automatically subtract the tax owed or even send the form to the tax authorities .
Hopefully the Dutch political scene is a little less volatile than ours was in 2024. Otherwise a tax on unrealized gains will be a massive self-own for Dutch progressives, just as it was in the US. Failure to understand and acknowledge the reality of concentrated media ownership will just lead to the same results, again and again. Progressives who want to tax unrealized gains need to first get elected and then float their proposals.
Those of us who are against such taxes can then argue from a position of principled opposition, instead of having to deal with the myriad of other consequences and side effects that happen when far-right demagogues win elections instead.
That’s a huge blow to the natural compounding that occurs as stocks appreciate over time.
Wouldn’t that kill their stock market? Who would invest with such taxes?
Seems like people would just pour their investment funds into real estate rentals or such where only “realized” income would exist to be taxed… (ignoring appreciation of the property)
A crummy idea is a crummy idea, even if you otherwise like the person having it.
They have 3-4 party coalitions and all of them want markup on your wallet. This is how tax the rich ends up, everyone else gets hit with taxes.
It was not a good policy and was unpopular with many Democrats, but I think there were several other more major contributing factors to why as Trump won (ex. general displeasure with inflation post-COVID, high emphasis on the asylum crisis/trans issues, plus only having 4 months lead-up time after Biden's withdrawal).
There was also a perception of politicization in agencies that are supposed to be neutral. People pointed to things like EV summits excluding Tesla, or regulatory pressure and delays affecting SpaceX launches and Tesla investigations. Whether justified or not, the optics made it look selective and punitive.
Individually these aren't huge voting blocs, but at the margins they likely added to the broader dissatisfaction.
And what also didn't help was the perception that the Harris campaign operated in something of an ideological bubble. For example, reports that staff discouraged her from doing a Joe Rogan interview because they disliked him reinforced the idea of an echo chamber, which ties into your point about trans issues.
Otherwise there's no way to put the issue in front of the people for discussion.
https://www.imidaily.com/europe/dutch-lawmakers-approve-a-36...
So if you hit it big you are trapped with the stock in your name and with this unrealized gains system
And even then there are exceptions for examole you can do all your banking on Revolut which is a Money Service Business and MSB aren't part of the CRS because they are not banks. And you can also buy shares on there.
Also there is not a single person who got taken out by the CRS and it's been in place for 10 years now
Investing in the stock market at least in principle is investing in businesses that use that money to increase productivity. We should discourage investment in vehicles that do not optimize for productivity (real estate, bitcoin, metals and similar).