The debate surrounding inheritance tax in the Netherlands has intensified following a proposal by SP leader Jimmy Dijk to significantly increase the tax rate. The proposal has drawn both criticism and support, highlighting the complexities and sensitivities surrounding wealth distribution in the country.

Dijk initially suggested raising the inheritance tax to 75 percent for heirs receiving more than 100,000 euros. This plan was later revised to apply the 75 percent rate to inheritances exceeding 500,000 euros. Critics argue that the proposal would disproportionately affect the middle class, while supporters contend that it could help reduce wealth inequality and promote equal opportunities.

The inheritance tax is a contentious issue in the Netherlands, with many viewing it unfavorably. Some argue that it taxes money that has already been taxed. However, proponents emphasize that an inheritance constitutes new income for the recipient, which has not been previously taxed.

Currently, inheritance tax rates in the Netherlands vary depending on the heir’s relationship to the deceased. Children and partners pay at least 10 percent, grandchildren pay 18 percent, and other heirs pay 30 percent. These rates increase for inheritances exceeding 154,197 euros, with the highest rate reaching 40 percent.

Sander Schimmelpenninck, in his 2023 pamphlet, advocates for uniform taxation of all forms of income, including inheritances. He estimates that such a revision could generate an additional 4.8 billion euros annually for the state treasury. Schimmelpenninck also proposed providing every 25-year-old with 100,000 euros in seed capital in exchange for a year of community service.

There is a growing sentiment that the government should reinvest inheritance tax revenues into areas such as education and poverty reduction. This would help legitimize a sharp increase in the tax and foster greater equal opportunities and solidarity.

The ongoing debate underscores the challenges faced by politicians addressing this issue. In a country with a significant right-leaning demographic, advocating for higher inheritance taxes can be politically risky. The discussion highlights the need for a comprehensive and well-reasoned approach to inheritance tax reform, focusing on fairness, economic impact, and the effective allocation of tax revenues.