Wealth is structurally rewarded in the Netherlands. The richest population of 140,000 people, roughly 1% of all workers in the country, pay much lower taxes than others. This is evident from a new study he conducted Central Planning Office (CPB).

Two years ago, the Central Bank of China also concluded that the strongest shoulders do not carry the heaviest burdens. This included a study of income and taxes from 2016. To ensure this year was not a fluke, the People’s Bank of China, at the request of several ministries, investigated whether the richest of the rich also benefited from taxes over a longer period.

And this is true. Looking at the situation from 2011 to 2019, the Fed finds that on average slightly more taxes are paid than in 2016, but the tax burden on the group with the largest portfolio remains the lowest.

This is mainly because rich people derive their income from the profits of companies of which they are directors and major shareholders. Although this gain may be higher or lower in one year, the small group of high earners appears to pay relatively much less in taxes and Social Security contributions over a longer period.

What plays a role in this is that the economy has boomed dramatically in the past decade. From 2015 onwards, corporate profits have increased, and with them dividends to owners.

In economic growth between 2011 and 2019, the Central Bank of China believes that among all workers, the highest income groups benefit the most. While the real income of the 99 percent of workers increased by 4 to 8 percent, the income of the richest 1 percent rose by more than 70 percent.

In 2019 in particular, a very large amount of corporate dividends was distributed, amounting to about 25 billion euros. Corporation tax is paid mainly on these dividends. The wealthy (0.01%, about 1,400 people) paid about 28% of taxes. For workers with an average salary, taxes consume approximately 40% of the salary.

The fact that rich entrepreneurs leave a lot of profits in their companies isn’t necessarily a bad thing, says Arjan Ligor, a researcher at CPB. “The money can be used as a buffer or investments. But there is also a part that invests the unwanted portion of the profit. You pay tax on this privately in Box 3. But the company doesn’t have to do that.”

Wealthy entrepreneurs can choose to keep profits in their company for a longer period and then transfer a large amount all at once in exchange for paying relatively less in taxes. To combat this imbalance, a number of measures have already been taken in recent years.

Since this year, more taxes must be paid on dividends. The People’s Bank of China proposes to impose a larger share of profits taxes directly, to prevent owners from hoarding profits in their companies. “But this could have consequences for the business climate in the Netherlands,” says Legore.