Peter Kavelaars, Emeritus Professor of Economics of Taxation at Erasmus School of Economics, discussed the findings of a recent Netherlands Bureau for Economic Policy Analysis (CPB) report (in Dutch) on inheritance tax during an interview on BNR Nieuwsradio on 7 July. While the report shows that a majority of Dutch citizens support higher taxes on larger inheritances, Kavelaars questioned how much additional revenue such a measure would actually generate.
According to Kavelaars, the current level of inheritance tax is relatively low, and a modest increase in the rates could be justified. At the same time, he argues that raising inheritance tax would make only a limited contribution to overall tax revenues. Inheritance and gift tax together generate around €3.7 billion annually, compared with total annual tax revenues of approximately €450 billion.
If the aim is to tax wealth more effectively, Kavelaars believes the focus should instead be on other elements of the tax system that allow the wealthiest individuals to pay relatively low levels of tax. He also challenges the common perception that inheritance tax amounts to "double taxation", explaining that the tax is levied on the recipient of the inheritance rather than on the person who originally accumulated the wealth.
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Listen to the full interview with Peter Kavelaars. For more information, please contact Ronald de Groot, Media & Public Relations Officer at Erasmus School of Economics: rdegroot@ese.eur.nl, mobile: +31 6 53 641 846.
