We all pay taxes. Yet, for many people, it is a tricky subject. Why is that? And is there such a thing as the perfect tax system? Because Prinsjesdag is around the corner, we put these questions to Professor of Tax Law Sigrid Hemels in the tenth episode of our science podcast, 'Oh Ja Joh?!'.
According to Hemels, it is hardly surprising that our tax system is complex. 'Our society is inherently complex, so the tax system is too. The simplest approach would be for every Dutch citizen to pay a single fixed annual amount, but that would mean someone living on benefits paying the same amount of tax as a millionaire. That would be unfair.' History shows that excessive inequalities are not accepted and can lead to revolt, examples being the Eighty Years' War and the French Revolution.
Taxes to influence behavior
According to Hemels, taxes serve three functions. 'First, raising funds for government spending. Second, income taxes in particular are used for redistribution: money moves from wealthier individuals to poorer ones in our society. Third, taxes are used to influence behavior—such as excise duties on tobacco.' However, in practice, that last function does not work very well.
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