Hacker News Reader

Comment by seaghost | Hacker News Reader

What can?

Wealth taxes, social safety nets, high quality education, programmes to combat anti-educational aspects of different cultures

The Netherlands has a substantial wealth tax though. About 1.6% of all assets, anywhere in the world.

It's a lot more complex than this, wealth taxes works similar to income tax[0]. The more you have, the higher the assumed return on investment. You only pay 31% of this. Only past 100k do you have to worry about a tax of 1.4%, and past 1mil this becomes 1.76%.

Additionally, even 1.76% is peanuts. Passive gains far outweigh 1.76%. The Dutch do not pay a wealth gain tax, either. This, together with loopholes to avoid paying taxes, shows why the Dutch are so unequal in terms of wealth, despite being fairly equal in terms of income.

[0]: https://www.financieelonafhankelijkblog.nl/vermogensbelastin.... (NB: Dutch source)

How is 1.76% a year peanuts? Isn't the assumption of "FIRE" that drawing 4% of your total wealth can last a life time?

1.76% would be paying 44% of your annual draw to the government. This would substantially alter the calculations of how much wealth you need in order to retire off of your wealth.

This also seems to encourage people with large net worth to constantly find gains above 2%, which is not easy if one wants to be conservative. With inflation at about 2% a year, the real loss to your wealth is getting close to 4% a year.

Reply on news.ycombinator.com