Tuesday, March 18, 2008

tax season

The tax season has started. The Canadian tax forms are due April 30th. The Dutch forms are due April 1. I have been studying on my taxes, and I am puzzled by the following.

Both Canada and the Netherlands decided to return large sums of money to me. Why? just because of the sheer random fact that I moved in june. Because I moved half-way the 2007 tax year, both countries consider my income to be low, as I worked only half a year in each country.

Yet, both my Dutch employer and Canadian employer have been deducting taxes as if I would be working a full year, gaining a full salary.

Had I moved in january, then I would have payed more tax in both countries. Ladies and gentlemen, this is the curse of progressive tax systems.

Progressive tax rates are in my opinion sheer nonsense. I understand that taxation is not by a fixed amount, say X euro per citizen. It should be relative to the wealth, so a percentage is more appropriate. Say every citizen X percent of his income. This is a flat tax system. Yet, both Canada and Holland have different rates for different people. This does not make sense.

It is my believe that every citizen, earning more than minimal income, should pay the same percentage. A third of your income would be psychologically a nice percentage. One third to the state, regardless of income. The 52 percent that Holland is taxing the wealthy is unjust. Why should the state get the bulk of the money you make?

The current system is broken. Dutch millionaires flee to Belgium. Dutch billionairs flee to Monaco. Canadian top earners are probably relocating their assets to some pacific tropical island.

Would there have been flat-tax in Canada and the Netherlands, then it would not have mattered when I would have moved in januari or on june. As it stands now, I have the burden of dilemma. Do I spend my tax return on an Italian V2 or Japanese Inline-4?


nigel said...

I'd take the girl on the yellow bike... or is it about the bikes? ;)

Anyway, couldn't agree with you more. Holland is the mediocre society.

jacco said...

En dan is er ook nog het AOW-gat. Ieder jaar dat je in het buitenland verblijft vermindert je AOW met 2%.

Amy said...

It better be about the bikes!

Anonymous said...

the boy and his toy...
als kleuter was het wel wat eenvoudiger en ging het om de playmobiel-auto of -motor, zonder duo-passagiere! ;)
Ik krijg heimwee naar die tijd.
Veel succes met de moeilijke keuze, die hoef ik niet meer te maken.

Anonymous said...

If you take enough tax from everyone to cover the costs that taxes are designed to cover, you're left with an income shortfall for the people, or your minimum threshold and fixed tax rate are quite high. If you take only what everyone can afford, the government can't fix your roads, keep your grandmother alive, etc.

Note that I earn enough to be tickling the top bracket - over 60% in AU - and I don't object to income tax brackets. I like living in a country with excellent public facilities and a significantly low rate of homelessness.

Brasto said...

500 years or so ago there was a guy from Spain (Duke Alva) who decided that these people in the Netherlands had to contribute one tenth (10%)of every Penny they made as tax to support Spain in their wars of suppressing the people in the greater Spanish Empire.

As a result the Dutch got very angry and started The Dutch Revolt.
Eighty Years' War 1568–1648), was the revolt of the Seven Provinces in the Low Countries against the Spanish (Habsburg) Empire.

Spain was initially successful in suppressing the rebellion. In 1572, however, the rebels captured Brielle and the rebellion resurged. The northern provinces became independent in 1648.

During the revolt, the United Provinces of the Netherlands, better known as the Dutch Republic, rapidly grew to become a world power through its merchant shipping and experienced a period of economic, scientific, and cultural growth.

The Southern Netherlands (situated in modern-day Belgium, Luxembourg and Northern France) remained under Spanish rule. The continuous repression by the Spanish in the south caused many of its financial, intellectual, and cultural elite to flee north, contributing to the success of the Dutch Republic.

So history learns that too much tax burden to a Dutchman could result into an uprise and/or many of its financial, intellectual, and cultural elite to flee elsewhere (E.g. Canada)

Paying today more than 55% income tax and in addition to that a 20% VAT, BPM,OZB,Road,Fuel,Fly taxes and a dozen more of Government/Community grabbings from my wallet, I believe it will be time for another revolt........

By the way..I would go for the BlueBike as Japanese have better reliability