Investigation: Promised tax cuts will be lost in the Dutch government formation

Elections after elections, citizens hear plans for tax cuts. Yet little of this burden of relief comes to light. In fact, you have to pay more tax than different political parties promised before the elections. In the meantime, the business community is piling up just a few million euros.

No, this is not a gut feeling of the bad citizen, but the outcome of scientific research. Management and economist Wimar Bolhuis will receive his PhD on Thursday in his research into the similarities and differences between election programs of coalition parties and their joint coalition agreement, from Lubbers II (1986) to Rutte III (2017).

Education gets less

The trends: social security, public administration, healthcare and international cooperation are being spent more and less than promised to education.

Citizens pay the bill because the taxes go up for them. Companies paid on average just 300 million euros less in the period under review.
Investigation: Promised tax cuts will be lost in the Dutch government formation
Government expenditures to rise

We start positively: ‘Approximately 70 to 80 percent of the election promises will be realized’, says Bolhuis in an explanation to RTL Z. “Expenditure on defense and infrastructure, for example, his promises are being met.”

The election promises that are not fulfilled are actually always the cuts. “Negotiating parties want to give each other the best, but they prefer not to take over each other’s austerity proposals,” explains Bolhuis. The result: government spending is rising. On average with around 3 billion euros per cabinet period.
The business world is getting a reduction in taxes

And that money has to come from somewhere. Negotiating politicians looking for money will soon end up with citizens, not with the business community. They spring from the dance, with several hundreds of millions of euros of tax relief.

Why does the citizen not get the bill and the business community? “Parties are busy voting for elections,” analyzes Bolhuis, who himself was already on the candidate list of the PvdA for the city council of The Hague and for the House of Representatives. “In such a campaign, you want to be able to present beautiful purchasing power plates, and in the formation process you will have to deal with the business lobby”, says Bolhuis.

Eliminate dividend tax through strong lobby

That lobby is quite effective. Employers’ organization VNO-NCW, together with a few large Dutch companies, initially managed to persuade the VVD-CDA-D66-ChristenUnie coalition to abolish the dividend tax, without being proposed in an election program.

Another explanation is that citizens do not notice it when a promised tax reduction does not take place. Bolhuis: “If you promise 10 billion euros in tax relief before the elections, but that turns out to be 5 billion, that does not strike a citizen.”

‘Politicians: be aware of it’

On March 17, 2021 are (for the time being) the next House of Representatives elections. Politicians who find themselves at a formation table, Bolshuis’ research must do well, according to the researcher. In a coalition, compromises must be made, parties can never make any promise.

“This indicates what the first fallback option is, the first thing that negotiators think about is raising taxes, perhaps unconsciously, I do not know a lot of formation negotiators, I do not know what the effect is on taxes. make informed choices, “concludes Bolhuis.

Mary Kruger

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