This article was produced in the context of the joint fact-check marathon of the AD, Nieuwscheckers and Pointer (KRO-NCRV) in the run-up to the House of Representatives elections on November 22, 2023. View all fact checks here.
The facts
In general, wealth is about wealth. More specifically, power is ‘de value of all assets (including savings, real estate and shares) minus debts’. Unlike income, capital can also be negative if debts exceed the value of assets.
Another difference, income is real money that you can buy something with, while assets are often tied up, for example a company, land or a home. You can’t pay bills with that.
Wealth inequality is described – in the Van Dale dictionary – as ‘great inequality in the wealth position of the members of a community or society’. If that difference is relatively large, it is also referred to as a wealth gap.
Power gap
The fact that there is such a wealth gap in our country is not limited to the SP. Several parties in The Hague are concerned about this, also because it is not entirely clear what exactly we are talking about. This led to the cabinet ordering an investigation dwhich was completed in the summer of 2022 by a working group of financial experts from the Netherlands Authority for the Financial Markets, various ministries, the Central Planning Bureau, the Central Bureau of Statistics and the Dutch Central Bank.
What turned out? Dhe prosperity in our country is even more unfairly distributed than expected. 10 percent of the richest Dutch people own 61 percent of the wealth, the top 1 percent even a quarter of the total wealth. On the other hand, eand a quarter of households actually have debts. VThe wealth of the richest households in particular was initially underestimated, the researchers said.
Favorable tax structures
One of the causes of the growing difference is the current tax system in which people with wealth and top incomes pay proportionately less tax. Inheritance and gift taxes also contribute to wealth inequality, mainly due to the so-called ‘business succession scheme’ (BOR). Through this scheme, intended to enable businesses to continue, people pay much less tax than with inheritance or gift tax without BOR. Furthermore, wealthy people can make more use of favorable tax structures and they more often have the means to obtain advice on this, the researchers report.
Marijnissen thinks it is impossible. ,,After the US, the Netherlands has the greatest wealth inequality in the entire Western world,” she says indignantly in the run-up to the elections.
It’s not the first time she’s started talking about this. She and the SP did not come up with that themselves. And she has a solid source. She relies on a 2018 report from the OECD (Organization for Economic Co-operation and Development), an organization in which 36 Western countries discuss economic and social policies.
It has been calculated that the wealth inequality of Dutch households is greater than that of all the other 35 countries, with the exception of the United States. Only there is the difference between the richest and the poorest even greater.
Pension assets
Marijnissen says what the OECD says. But that’s not the whole story. Because the countries do not all use the same calculation methods, calculations and definitions, it is difficult to calculate an i very preciselyto make an international comparison of wealth inequality. For example, differences in provisions and income support measures per country are not taken into account.
Such as pension assets. While in most countries people have to raise their own pension, the Netherlands (and this also applies to Denmark, which is in third place in the OECD list) has a extensive collective pension provision. However, this is not taken into account because people do not directly own that capital and cannot give it to someone else.
But that does matter quite a bit. Pension assets account for almost half of total assets, according to figures from Statistics Netherlands. If it is included, the Netherlands will end up in the middle of the OECD countries, he said Chief economist Peter Hein van Mulligen of CBS wrote in the AD earlier this month.
‘Characteristic of a healthy, competitive economy’
In fact, there is no question that the Netherlands has the greatest wealth inequality in the Western world after the US. Nevertheless, the Hague working group concluded that the prosperity in our country is ‘even more unfairly distributed than thought’. In In the research report ‘Lights off, spotlight on: the wealth distribution’, the working group notes, among other things, the following:
‘Having wealth and a certain degree of wealth inequality is, according to the researchers, quite a characteristic of a healthy, competitive economy.’ And: ‘Entrepreneurial capacity has great social value’, the working group states, ‘when this capacity is located in companies that provide employment and when this capacity is used to respond to challenges of the future, such as sustainability.’
But eand excessive wealth inequality also has negative effects on the economy and society, according to the researchers. ‘Too high a concentration of wealth among a small group of households can lead to economic and political power (…), to the enrichment of private interests that do not necessarily contribute to social interests (…) and to disproportionate influence of these group on public opinion and political decision-making’.
Conclusion:
Lilian Marijnissen’s statement that wealth equality in the Netherlands is the second highest the Western world is, is not strictly speaking correct.
