‘We could levy taxes in a less economically damaging way'


In an interview with Belgian newspaper Knack, Kevin Spiritus, Assistant Professor at Erasmus School of Economics, gives his view on the Belgian tax system. Among other things, he talks about the new securities tax, the difference between the tax systems of the Netherlands and Belgium, the wealth tax, and his views on the ideal tax system.

The securities tax

Is a capital gains tax on shares, also known as the securities tax, really a good idea to make the tax system fairer? According to Spiritus, it will, above all, make the tax system more complex. There will be an exception for registered securities. These are, for example, shares held by entrepreneurs in their own company, but also investors who go to the bank with their portfolio of shares can have their shares name-registered in a roundabout way. ‘That is a loophole that the government should try to close,' Spiritus says. Another disadvantage of the reform is that the government wants to tax separate accounts. This will give investors an incentive to hold multiple accounts in order to avoid taxation.

Belgium versus the Netherlands

Many Belgians feel that they get little in return for the taxes they pay. Spiritus questions this. According to him, Belgians get much more in return from the government than the Dutch do. ‘Health care and education are much cheaper in Belgium, and the middle class can also count on benefits such as cheap public transport, service vouchers and affordable childcare. If we were to make such things more expensive, we could lower taxes a little. But I have never heard someone propose that.’

Exceptions to wealth tax

It is clear to everyone that there are many exceptions to the Belgian wealth tax, Spiritus points out. Of these, the capital gains from the sale of shares are the rental income that is not taxed, are the best known. ‘Such exceptions steer people's behaviour in a way that is economically damaging.’ According to Spiritus, this is because people are going to invest less in bonds and companies that pay dividends, given that these investments are taxed. And if rental income isn't taxed, people are going to invest more in rented housing instead of more productive companies.

The ideal tax system

According to Spiritus, we could levy our taxes in a less economically damaging way. ‘I would tax all capital income at a single rate, or possibly in a progressive way with increasing rates. And I would tax actual profits, and not tax a fictitious interest that the assets supposedly yield, like they do in the Netherlands. Why would I do that? Because the return that people get from their assets can be very different.’ According to Spiritus, we could take Norway as an example. There they tax all income from labour at a progressive rate, and all wealth income at a different rate.

Assistant professor
More information

The full article from Knack, 4 November 2020, can be downloaded above (in Dutch).