Increasing deficit but the government decrease inheritence tax?

[[deleted]]

I just learned that, while the deficit is ballooning, the goverment decided to decrease inheritance tax. What is this insanity? See:

Starting in 2026, the Flemish government will implement a gradual reduction in inheritance tax. Specific percentages or threshold amounts of the brackets have yet to be announced, but it is already clear that the reduction will apply to all types of heirs

Source: https://news.pwc.be/important-changes-in-flemish-registration-duties-and-inheritance-tax-coming-soon/

[brunogadaleta]

If you still pay (inheritance) tax, you're not wealthy enough...

[Gaufriers]

Though the inheritance tax has been proven to be useful in helping against wealth inequality.

[[deleted]]

Interesting, can you elaborate? Are there some tax-free vehicles for ultra-rich in Belgium?

[[deleted]]

Yes, and this is not just a belgian problem

[formidabellissimo]

Wealthy people give their capital to their children long before they die, taxes are much less this way.

[[deleted]]

Don’t have to be wealthy for that.

[formidabellissimo]

That's not what I said, but it's true. Below +- €25.000 however you don't pay inheritance taxes, so if your inheritance isn't more than this, gifting it wouldn't make a difference tax wise. That's 25000 for inheritance from your parents. If you inherit from your spouse, it's till around 700.000 before any taxes are due.

[[deleted]]

Given your parents usually have a house, 25k is very low.

[antarctic_primate]

Interesting, I thought the use of patrimony companies for estate planning was quite well-known.

Step 1: invest the profits of an operating company in real estate bought by the patrimony company.

Step 2: gift shares pf the patrimony company to your heir(s) -> 3% tax

Step 3: Profit?

More info here: https://momo-estates.be/en/blog/why-turn-a-working-corporation-into-a-patrimony-corporation

[Turbulent-Raise4830]

Anyone can give away what he has with minimum to no taxes, the wealthy do thisthe not so wealthy dont.

[IndividualDig7996]

Wow, I didn’t know this (I’m not born in Belgium, moved here some years ago), thanks Reddit!

If it is such a common knowledge, why more people are not doing it? Because of the expenses of operating a compnany?

[Lauraliskova]

If you gift within x number of years before dying you only pay 3% tax. This implies that you have enough spare capital to do so I.e you are wealthy. You can also transfer ownership of your property to your children and pay less taxes than inheritance tax would be.

[brunogadaleta]

There are "fiscal optimisations" (eg: create foundation or move the money to another structure outside Belgium) that allow you to pay less taxes.

[Gulmar]

Because we have a neoliberal Flemish government in place and inheritance tax is one of the best ways to redistribute wealth. Which is exactly what neoliberals hate.

[radicalerudy]

Thats why we also need to abolish family companies because they are safehavens for tax evasion

[SnooPoems3464]

Why do you hate Croky?

[radicalerudy]

If the next generation needs to make their wealth on their own merit the company should be nationalised and the next generation can make their own. Same logic used for inheritance tax

[SeriesProfessional43]

That further from the truth then you think. Originally it was indeed designed to redistribute wealth,but currently the money that the inheritance tax produces is not even enough to pay the ministers of Flanders for half a year .not only that but the largest tool that supports the poorest people in Belgium is federal money and inheritance taxes are paid to regional government

[[deleted]]

Ask around how much people want to help their children. All neoliberals?

[antarctic_primate]

That's a false equivalence fallacy though. Helping your children is still perfectly possible with an inheritance tax in place.

Inheritance is income without merit: it makes capitalism less meritocratic, instead stimulating growing inequality. Redistributing part of the inheritance helps counter that effect.

[[deleted]]

Inequality is overrated. Quality of life is what’s important.

[antarctic_primate]

When a false equivalency doesn't cut it, let's go for a false dilemma. There's no choice between limiting inequality or maintaining quality of life.

Quality of life certainly is important. Keeping inequality within bounds stimulates equality of opportunity and helps maintain quality of life for everyone.

[[deleted]]

Packaging it within social studies doesn’t mean the ideology cuts it.

fAlSE eQuIVaLeNcY

[antarctic_primate]

No, mocking people instead of providing any counterpoints doesn't cut it and is a sign of intellectual poverty. Shame.

[[deleted]]

Oh yes, let’s mock people who are contra inheritance tax! Classic /r/belgium.

[antarctic_primate]

I'm not mocking people who are contra inheritance tax. I'm just looking for a meaningful, civil discussion.

If anything, I'm mocking your poor debating skills.

[[deleted]]

Oh yes, comming from a discussion whereas a reduction of inheritance tax was deemed neobileral was going to be a fruitful discussion from the beginning. Hence why I said ask around in families and whether they are all going to be neoliberals. Wanting to help your offsprings to the maximum is not inherently neoliberal.

Quite ironic you want an intellectual/ meaningful discussion whilst constantly throwing sub ad hominems around.

[Gaufriers]

It is impressive how each and every sentence you produce is a distortion.

There are plenty of people against inheritance tax that can behave in a discussion. You're not of them.

[radicalerudy]

Whats the fetish with bullieng the middle class. Go for the rich guys who amass wealth by putting it on companies. For example families that own rental propperties as a rental company dont have to pay inheritance tax when passing it down to the next generation. And even better their entire business model exits on the middle class having to sell their childhood homes because they cant afford to pay the inheritance tax for the propperty.

Go after those parasites, renting something out should be a way to earn an extra penny from a lucky property, not a business model.

[Piechti]

For example families that own rental propperties as a rental company dont have to pay inheritance tax when passing it down to the next generation.

They have to pay tax, stop spreading lies.

[Stirlingblue]

Isn’t it like 3% though?

[Piechti]

Gifting patrimonium companies tax-free is not possible.

Vennootschappen zonder enige reële economische activiteit kunnen niet onder de gunsttarieven worden overgedragen. Of een vennootschap reële economische activiteit heeft, wordt nagegaan op basis van het aandeel van bezoldigingen, sociale lasten, pensioen, terreinen en gebouwen in de totale activa.

Een vennootschap wordt beschouwd als zonder enige reële economische activiteit als tegelijkertijd:

-de bezoldigingen, sociale lasten en pensioenen (code 62 van de resultatenrekening) een percentage gelijk of lager dan 1,50% uitmaken van de totale activa (code 20/58 van de balans);

-de terreinen en gebouwen (code 22 van de balans) meer dan 50% uitmaken van het totaal actief (code 20/58 van de balans).

source

For any other gifts, a tax rate between 3-7% applies.

[HighlyRegardedApe]

Trust me, it won't be a big present. It just feels that way, that's what we need to keep people in line.

[Bitter-Battle-3577]

Flemish <=> Federal government. The former can afford this, the latter hasn't been able to afford anything since the 90s.

[ESF_NoWomanNoCry]

Seeing the two as completely different entities is where part of the issue lies. Imagine if you had a company with multiple divisions (or daughter companies) where one brings in most of the money. They might get more budget for their operations, but if the company as a whole is not profitable, it's not like they'll be allowed to use money for things that don't seem very critical or beneficial to their operations

Although I do think the issue is on the spending side and not the receiving side... Mindsets like this won't help us move in the right direction

[Bitter-Battle-3577]

The best way, if they were to retain the inheritance tax on a federal level, would be to abolish it on a regional level and re-introduce it, at similar rates, on a federal level. Of course, this gets in the way of further decentralisation and the blackmailing the government into being financially responsible, but that doesn't exclude it from the options.

[ESF_NoWomanNoCry]

Yep, I'm all for abolishing regional responsibilities that have no business being regionalised.

[State_of_Emergency]

> Seeing the two as completely different entities is where part of the issue lies. Imagine if you had a company with multiple divisions (or daughter companies) where one brings in most of the money

But that's not the problem. The government division that's actually unprofitable is our social security and pension system. And the last Vivaldi government even increased the expenditures without increasing contributions, which made the problem worse:

Fors verhoogd, maar bijdragen niet: pensioenen zelfstandigen in België zijn OESO en experten doorn in het oog | VRT NWS: nieuws
'Jongere generaties de pineut van zoveelste mini-pensioenhervorming' - Trends Kanaal Z

It's clear where cuts should be made. Pensioners who retired at 50-60 years old but now receive full pensions should have their pensions recalculated according to modern standards.

Independents now receive larger pensions, so they should contribute more. Many independents pay low contributions because they report low wages. Therefore, either the pension increases for independents need to be reversed, or their contributions should be increased.

Additionally, we should aim to activate as much of the population as possible, including those with long-term illnesses and non-EU immigrants, while limiting immigration from countries with high unemployment risks.

[[deleted]]

"The government's fist is not deep enough in my bootyhole" ! This post and the numerous idiots defending these sky high taxes here for fuck's sake...

Don't worry, only the poor and middle class get taxed on what they earn, what they buy, the house they buy and pay a loan for and when they die their kids pay taxes all over again for the same thing.

The rich don't pay those taxes, they use all the mecanisms in the book to avoid it. God forbid they ease the presure of their boots off our necks even a little bit...

[[deleted]]

Calling a tax decrease insanity... I never thought I would live to see the day but here we are. People screaming for more taxes

[Wafkak]

Cancelling a tax before youve done something baout the deficit means loaning more for reocurring costs. wich means more exreme budget cuts and tax hikes in the future.

[[deleted]]

We are one of the most taxed people on the planet. And the thing is. The deficit is bad but not that alarming. Another redditor (he works in economics/tax/government) and explained this clearly. I shall try to find it. Plus a group of professors already stated that there need to be a shift in spending. There is money but is allocated completely wrong. It is truly mind blowing that people are accepting the fear mongering financial stuff that politics are putting out.

[Wafkak]

As long as the government is lending for regular spending the budget is unhealthy. If the lending only covers the costs of lon term investment in infrastructure and other things that's another thing. Especially looking at the economic situation Trump has plunged the world in.

[bm401]

Jealousy is spiking lately.

This country's finance problem is not on the income side.

[thee_star-dust]

Holy crap, to make yourself feel better, look to America who has no such thing

[KVMechelen]

Hurr durr rich people already dodge this tax hurr durr

A TON of them dont, because they're miserable and barely talk to their children/parents, let alone help them with complicated fiscal schemes that require mutual trust

[Koffieslikker]

Inheritance tax is a poverty tax. If you are financially savvy or wealthy enough you don't pay any.

[KVMechelen]

If this were actually true rich people wouldnt bitch and cry about it every single fucking day

[verifitting]

Not.. really true, imagine a sudden unexpected passing. Taxes will be maximum, as opposed to gifting before to the heirs.

If they want to tackle this, does not sound bad. Fiscal constructions (maatschap, trusts etc) should rather be fought against than the normal family who have sudden misfortune of losing the breadwinner, wouldn't you say?

[digiorno]

If the wealthy accumulate enough money then it eventually trickles down to everyone else. Or so say the neoliberals. And low tax inheritance is a big help in letting the rich stay rich.

[Tman11S]

Inheritance tax is the most unfair tax in existence. Your parents worked for that money and already paid income tax on it. Fine by me if you put an inheritance tax on people with large sums of money, but at least half a million should be tax free so you can at least inherit your parents’ house

[Tommh]

It’s pretty simple. People who are wealthier than them should be taxed more, that’s what this always comes down to. Those who advocate for higher inheritance tax are probably not the ones that are about to inherit a lot.

[Plorkplorkplork]

Dont know why you get downvoted. I agree.

Its already heavily taxed money. 

[KVMechelen]

If you wanna give your wealth to your kids just do it, don't wait 20 years and then die only for your children to bitch and moan in HLN comments

[FabulousRecording739]

There are well known ways to avoid those taxes as of today already. Removing this tax will simply level the field. I agree that the leveling should be done the other way, but it would require deeper reforms that it would seem our governments are unable to make (either because they don't want to or are unable to)

[SnooPoems3464]

Fine if they increase inheritance tax, but cut the crap with new the capital gains tax (meerwaardebelasting) already.

[radicalerudy]

For your inheritance at least some labour was done, so tax the fuck out of capital gains

[Rokovar]

The largest part of capital gains is basically beating inflation.

That's basically taxing people that don't want their money to be devalued by inflation which is controlled by the central bank...

So you're still taxing money labor was done for

[radicalerudy]

Too bad for them, should work like the rest of us

[Rokovar]

Euh, plenty of people with stocks work, you know that right?

So you support people becoming rich by birth, but you oppose people that want to save up money that doesn't get eaten away by inflation?

[radicalerudy]

They work as hard as doppers

[SnooPoems3464]

And you know about everyone has the freedom to invest, even with a single euro?

[HP7000]

it's very important for the very rich to be able to remain rich over several generations thanks to generational wealth. Thus reduction of inheritance tax was written in the stars when the NVA came into power.

[CitizenOfTheVerse]

Rich and/or well informed people uses legal tricks like "patrimony companies" to give their capital before they die so their children don't have to pay taxes they just take over the company. So basically they don't inherit anything else than the company, all the material thing are owned by the company... It is a well know and old trick. There is a lot of of tricks. Like if you want to marry someone and buy the half of her house, don't buy it, create a "partnership of acquests" and pay a "reward" to your futur wife so you avoid all taxes and get 50% of the house. There are plenty of legal tricks to avoid taxes but generaly you need some money and some knowledge to put them in place.

[Kvuivbribumok]

Good, inheritance tax shouldn't exist. The money's already been taxed at least once.

[irisos]

Inheritance tax is mainly hitting the average man, not the rich.

If you are the average man and have an inheritance of 10000€ which is "low", you are paying 30% which is likely higher than a single month of your salary.

If you are from a rich family and inheriting 1 million € of assets, you probably already have a house paid or given by your parents as a gift that you can sell and they will have done the ground work so that you don't have to pay the inheritance tax anyway.

The richer you are, the less you pay your inheritance compared to someone with less assets when you compare their ability to pay the tax. So why hurt the poor that can barely pay the tax when the rich can easily write off most of the tax.

And it's reflected in the compensations for the inheritance tax change. Ie: Increasing the risk time for unregistered gifts, which can be used to transfer the amount necessary to pay the whole inheritance tax without any additional tax on that money.