Budget neutral sucks!

Inheritance tax probably is the most disliked and misunderstood form of taxation our country has. Whenever a departed dear one grants a part of their ‘fortune’ to you, you’ll have to pay taxes for receiving it, even when you have not yet received it (for instance, when your mom still lives in the parental house when your dad passed away).

Let’s face it: inheritance tax is obsolete and weird, as you’ll pay taxes over money that already has been taxed in the past, and possibly even re-taxed every year if the sum exceeded €20.000 (1.2% wealth tax).
State secretary of Finance de Jager has rightfully declared he intends to discard this kind of taxation, but he also mentioned that this would have to be done ‘budget neutrally’. in other words: the state cannot afford to loose the 2 billion euros of income generated from inheritance taxes each year. Therefore, De Jager needs to get that money from somewhere else. As this is not easily achievable, De Jager only makes the regulations surrounding inheritance easier. Not less.

Partners and children of the deceased, who now pay between 5% and 27% of the inherited sum, will be paying the same in the future, yet nephews, uncles, nieces and aunts will pay lower amounts. They now have to pay up to 68%, which is quite a lot. It also is a high percentage compared to our neighboring countries. (Dutch link)
Any cheers possibly appearing on the faces of those who think the law is put out of order will have to be fading away fast after reading this, as they quite possibly will not or very limitedly profit from the announced measures by De Jager.
However futile, the commitment of De Jager is to be applauded as it paves the way to more rigourous intervening when it comes to the inheritance taxes. Like in Sweden and Portugal, who declared inheritance taxation to be re-taxing owned money and completely abolished their laws accordingly.

I don’t think we are quite ready for such measurements, and the inheritance taxation will remain to be the most dreaded form of taxation in The Netherlands for quite some time to come.