Insiders allege PM Jetten wants to scrap benefit cuts, speed Box 3 tax shift
On Saturday, Prime Minister Rob Jetten and Finance Minister Eelco Heinen sat down with the opposition parties to discuss the long-running Box 3 tax dispute and the planned social security cuts. According to De Telegraaf, leaked information suggests that PM Jetten is ready to scrap the social security cuts, which is what the labor unions have protested for. Additionally, the Cabinet wants to move as quickly as possible to a full tax on realized capital gains.
The Cabinet wants to end years of deadlock over Box 3 by accelerating a complete shift from 2028 to a tax on actual investment returns, including stocks and bonds. Under a capital gains tax, investors would settle with the tax authority only on the real return after the asset is sold. That means that the government would collect less money at first - more than 10 billion euros less in the early years. D66, VVD, and the CDA previously failed to close that budget gap.
The money will reportedly come from the wealthy mainly through Box 2. Business owners would find it harder to borrow tax-free from their own companies, so they would pay more tax. To get the money fast, the Cabinet would first reportedly briefly lower the Box 2 rate. That should push owners to take profits out, giving the government a one-time tax windfall. It would also lower the amount one can hold tax-free so that people with savings or investments start paying sooner.
Additionally, planned cuts to the unemployment (WW) and disability (WIA) benefits would be scrapped completely, meaning that the cost will have to be absorbed elsewhere in the budget. The government is reportedly also willing to shift money previously reserved for a higher in-work tax credit toward a lower tax rate for all middle-income earners.
The first talks with the opposition have reportedly produced mostly positive results. “The talks were constructive, but they still raise questions,” Jetten said, according to De Telegraaf. Pro leader Jesse Klaver said that, for the first time, he saw real willingness to scrap the planned social security cuts.
“It loos a bit more left than right to me,” said JA21 leader Joost Eerdmans about the political direction of the package. SGP leader Chris Stoffer agreed with him.
However, “there are good things in it, such as Box 3,” Stoffer said about the plan. Eerdmans, while overall positive about the plan, said clarity is still needed on how it is to be financed.
Jetten said that all five parties that were invited were “enthusiastic.” “One is enthusiastic about topic A, another about topic B,” he told the press after the talks. “We explained the solutions we see for movement on purchasing power and reforms of the economy and social security.”