Flat tax and taxation state pension for the elderly poor

Miscellaneous Jyrnas August 7, 2016 0 0
A flat tax rate of tax is the same for everyone and no tax brackets with rates several more. The CDA says it wants to combine this with a solidarity tax for top earners. What are the consequences of this flat tax? It depends on how the tax reform and tax reform takes place, only one tax rate of 35% is bad for the elderly. Whether there should be a lot of money. A flat tax would be good for the labor, but the flat tax is certainly not a panacea. It will be in the election program of the Christian Democrats and the committee Dijkhuizen comes with a new tax system pretty close with two tax rates and state pensions through tax generation.

Enter the flat tax in the Netherlands

Every so often, the flat tax in the publicity and the desire to reform the taxation. Not illogical because the four tax brackets with four return airfares to single tax rate makes life a lot easier. What is often forgotten is that people aged 65 plus and 65 with incomes up to ?? 33 363 have a lower tax rate than those who are younger in 2014. Not 33% or 42%, but in 2014 and 2015:
A flat tax of 35% means for the elderly also direct significant deterioration.

Financing of a single tax on the flat tax

Just a calculation off the cuff. If we get a flat tax of 35% will cost the Empire in first instance roughly 15 to 16 billion euros of income tax, but because the deductions on the income tax the rich less than cost, the gap is ultimately much smaller. If most allowances are abolished, except for the deduction of illness, as most tax credits disappear as well as imputed rent and the rent allowance, there remains a manageable gap in the budget by the CPB for us can be calculated and politics can be closed.

Additional solidarity tax necessary?

An additional solidarity tax helps to get the budget in order, but is of course at odds with the principle of the flat tax. Indeed, there are two rates: 35% and one more. Actually there are three because we in box 3 of the income tax a rate of 30%.

What does the flat tax for people?

My estimates are the following:
  • Older people, especially older people are homeowners with mortgages to decline;
  • The generation tax is introduced;
  • There is less mortgage interest;
  • How much higher income on going forward, depending on their deductions and whether they are struck by the solidarity levy;
  • Who is younger than 65 and less than worthy ?? 19 822 in 2015 is going to decline, because the tax rate is increased. This becomes even worse if they have a home with a mortgage;
  • People with incomes higher than ?? 19 822 in 2015 to go ahead with the lower tax rate if they do not have many deductions;
  • The elimination of tax affects households with children;
  • In general, a lower tax rate stimulates labor supply;
  • Housing prices will fall.

Dijkhuizen wants taxation AOW

The committee Van Dijkhuizen makes things concrete gradually introducing fiscal state pension. Every year older than help pay for retirement by also pay state pension contributions. That will be for those with more than 120% of the minimum income in retirement and pension. The elderly people with little income to pay as for the young. In 2013 was the lowest rate, apart from the tax exemption, but by the law uniform definition of salary, already up to 19.1%.

Flat tax is acceptable?

Or the flat tax is acceptable, is primarily a political question. The above effects will want to do something, but it takes money. If that money only comes from higher incomes, it is debatable whether that's wise. If nothing is done for the older people who already have to fear a lower pension and tax generation, the pick will be done. The same applies to housing prices. This also means that one does not happen overnight the tax system can change so radically, but must choose the path of gradualism. But how gradually it will be and what will be the precise purchasing power effects? These are all issues that should be calculated properly. Now just call as a political party that you are single tax rate, only gives reason turmoil and I think is unwise.


For now, the flat tax there yet, so we'll have to make do with the current tax brackets and rates of income tax in 2015, tax rates and disks.