Dutch cabinet’s plans hit low- and middle-income households
In the media image: Arturo Portillo on Unsplash+
Recent calculations show the new Dutch cabinet’s plans will lower the purchasing power of low- and middle-income households. Egbert Jongen, Professor of Economics, commented in ‘Trouw’ newspaper about the economic impact of the new cabinet’s policy.
An analysis of the coalition agreement by the Netherlands Bureau for Economic Policy Analysis (CPB) shows that D66, VVD and CDA place the burden of costs – such as for defence and rising healthcare expenses – primarily on low-income households and the middle class. According to Egbert Jongen, the new cabinet's plans will therefore increase income inequality. They will lead to a loss of purchasing power among low- and middle-income households, while the impact on top incomes will be relatively less.
The professor explains that the additional funding for defence, which the cabinet refers to as the so-called 'freedom levy', will also be borne primarily by low- and middle-income households. He finds this remarkable: 'Higher-income groups, with the assets they hold, have a greater interest in freedom and stand to lose more if we were to end up in a doom scenario.' On average, this group also possesses more wealth. For that reason, Jongen believes an increase in the tax on capital would be a more appropriate measure.
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Read the full article in Trouw (€, in Dutch)