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You have to pay tax on your savings? What country are you in?

Not the parent comment but in the Netherlands where I live you have to pay tax on your savings once it exceeds about 21K EUR.

The government then makes up that you must be at least getting 4% (up to 9% if you have up to 1M) interest, and it wants 30% of that interest of anything over that 21K EUR limit.

Meanwhile the current interest at banks is anywhere from 0.05% to 1% here (most major banks are around 0.2%).

The way you describe it, it's not tax on savings, it's investment income tax. Almost all countries have it.

As a general principle taxing personal investment income should be taxes at least the same amount as labor income. Taxing labor has more negative externalities than taxing investment income.

I think they're saying that they're being taxed as if they were getting 4% interest on their savings, when in reality they're getting less than 1% because rates are low. So even though it's nominally a tax on interest earned, it's effectively a tax on value of assets held in savings over 21k.

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