What have I changed my mind about? Linguist Wim Daniëls once coined the wonderful word ‘standing point’ for a position that you have abandoned. We should talk about that more often, Daniels thought. Because progressive insight is interesting, especially from someone who expresses opinions. Every year before the summer I therefore try to determine my standing points, as an antidote to the illusion of one’s own right.
My standing point this year is about inequality and our tax system. I was never concerned about the fact that pre-tax incomes grew more skewed in the Netherlands, in jargon: primary incomes. The Dutch government levies a lot of tax to make those incomes more equal. The result: the Netherlands excels internationally as a country in which the distribution of income is very equal. So I always thought: who cares that primary incomes become more unequal?
The primary distribution of income does not matter because tax corrects. So wrong thinking
That does matter, Pieter Hasekamp, director of the Central Planning Bureau, made clear to me recently. Because that redistribution is accompanied by friction. This has become painfully clear in recent years with the allowances. These should support people in their income, but far too often they cause financial insecurity for people who are already not well off. They are paid out as an advance and often have to be repaid later.
So the greater inequality of primary incomes is indeed a problem. I stand corrected. It is therefore understandable that political parties want to raise the minimum wage: that is an intervention in primary income. This year it has become even more clear to me how much the tax system needs improvement. And I’m not just talking about the fees. The tax on wealth here is low compared to that on work, and there is too much room for the handy to pay relatively little tax on large assets and legacies. A tough job for a new cabinet, but important and necessary.
And then there is another standing point that I would have liked to admit, but cannot yet. It is about the unprecedented economic emergency support during the corona crisis. Estimated costs: more than 80 billion euros, an immense amount. Potentially, this emergency support can drastically change the understanding of economic policy. The blow and damage to the economy are much smaller than economists initially thought.
It is logical that the emergency support is an important reason for this. Not only because an incredible amount of money was transferred by the government, but also because the support kept confidence up. Crises often have a chilling effect on investments, on people who want to start a business or buy a house. Everyone’s confidence in the future is declining. This crisis was different. The government said: we provide solid ground under as many feet as possible. This may have had much broader positive economic (confidence) effects.
However, the support is not over yet. Only when it stops can the bill be drawn up. How much money has been wasted, how much has been cheated? So maybe I’ll give you my standpoint for next year, because soon after the corona crisis started, I wrote here: “This policy works with a short lockdown, a short dip, not with a virus that restricts our social traffic for a long time.” I wonder if that analysis is correct.
Marike Stellinga is an economist and political reporter. She writes about politics and economics here every week.
A version of this article also appeared in NRC Handelsblad on 10 July 2021
A version of this article also appeared in NRC on the morning of July 10, 2021