An ‘insane’ new wealth tax has global investors panicking

Hans van Leeuwen

Sat, February 21, 2026 at 9:00 PM GMT+9 7 min read

Illustration: hand picking up cash

Dutch parliamentary votes seldom make international headlines, let alone spark an international firestorm on social media. Especially if the vote is about tax law.

But last week, Dutch politicians voted to reform the part of their tax system known as “Box 3”. It sounded dull, but it unleashed a furious pile-on.

As a result of this vote, from 2028, the Dutch will pay an annual 36pc capital gains tax (CGT) on any increase in the value of their stock, bond or crypto investments, even if they have not sold the asset and realised the gain.

Even if investors only make money on paper and are sitting tight, they will have to stump up hard cash for the tax collector.

“Taxing unrealised gains is insane,” Andrew Lokenauth, a former Wall Street finance exec turned influencer, told his 445,000 followers on X.

Tobias Lütke, Canada-based founder of ecommerce platform Shopify, told his 450,000 followers on X that the proposal was “the dumbest thing any government on planet earth is pursuing right now. And that’s saying something”.

“The entire legislature of [the] Netherlands failed a very public IQ test in front of the entire world. Pathetic,” he said in a later X post.

2002 Dutch investors embrace crypto

Even Elon Musk, X’s owner, picked up on the controversy. He put a “100%” agreement-emoji and a laughing face under a post that said: “I’m honestly thrilled that somebody was r------d enough to actually try this.”

The proposal will particularly hammer people with volatile investments such as cryptocurrency. Dutch investors’ holdings of cryptocurrency soared in value from €44m (£38m) in October 2020 to €1.2bn five years later.

On the day the tax is calculated, the value of an investor’s crypto holdings might have doubled in a year. But by the time they get their tax bill, the crypto price might have slumped again. Then they would be forced to sell some of their holdings at a loss, to pay tax on a gain they never realised.

“The Dutch communist government is … making us fund our own destruction by taxing us [on] money we never even made,” said Eva Vlaardingerbroek, a Dutch far-Right activist.

By the end of this week, almost 50,000 people had signed an online petition demanding that the Dutch parliament’s lower house revisit its vote. This level of backing surpasses the threshold needed to force MPs to formally consider the petition.

The pushback reflects a deep-seated aversion to hitting investors with CGT on unrealised gains, which flies in the face of how a capital gains tax normally works.

In fact, it’s probably a misnomer to call this a capital gains tax. In effect, it’s actually a wealth tax.

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Most countries with a wealth tax levy it on people’s total wealth. The Dutch one is targeted, at a much higher rate, at only the annual increase in their wealth.

The visceral reaction underscores just how divisive wealth taxes can be. The fact that it has caught attention globally also shows how nervous people are about the ideas catching on elsewhere.

Trenchant politics and strained public finances are propelling new proposals for wealth taxes the world over.

Left-wing politicians in France last year demanded a 2pc tax on anyone with assets worth more than €100m.

Its chief advocate, the high-profile Gabriel Zucman, a high-profile economist, said the government could not tackle the country’s ballooning budget deficit by raising taxes or cutting spending on ordinary people if it allowed the “ultra-rich” to remain under-taxed.

That prompted Bernard Arnault, boss of luxury-goods firm LVMH and France’s richest man, to accuse Zucman of seeking to “destroy the French economy”.

In Norway, a centre-Left coalition government extended the wealth tax to unrealised gains, prompting tech entrepreneur Fredrik Haga to move to Switzerland. The Swiss themselves recently held a referendum on a new inheritance tax. (In November, 78.3pc of the population and all 26 cantons voted against the proposal.)

The next referendum on the issue will likely come in California in November. Voters will be asked to back a proposal, championed by Bernie Sanders, the Left-wing Democratic senator, to slap a 5pc wealth tax on the state’s 200-plus billionaires. A bitter battle looms.

In Britain, Zack Polanski, the Green Party leader, also advocates a wealth tax. Rachel Reeves, the Chancellor, has ruled out a “standalone wealth tax”, although many of Labour’s backbenchers support it.

In the Netherlands, a majority of MPs in the 150-seat house of representatives backed the new CGT regime, including not only those on the Left but also the liberal and centre-Right parties.

The measures’ chief opponents were the Right-wing populist groups, including the PVV party led by the Netherlands’ best-known politician, Geert Wilders.

One of the opposition parties, the Farmer-Citizen Movement, tabled a motion demanding that the government quickly devise a new CGT to replace this one, and base it only on realised gains. A majority of MPs also backed this.

“What they have said for certain is that while accepting this new system, they want to re-evaluate it within three years,” said Eldon Beerens, of consultancy OrangeTax.

“They want a new system proposed before 2028. So it could be the case that we’ll see it gone within a couple years. Or it might stick around, because, knowing Dutch politics, it could take a while before everything gets through.”

It might seem puzzling that MPs voted to bring in the tax, only to then vote against the principle on which it was based. But they were under pressure to find a quick solution.

The tax already existed before this vote. But instead of taxing people on their personal unrealised gains, the authorities have been taking a shortcut. Each year, they just tax everyone as if they had made an identical gain. This year, the assumed rate of gain (or “fictive rate”, as the Dutch call it) is almost 7.8pc.

Dutch taxpayers only really became restive about this during the Covid pandemic. Many investors were making huge losses at that time, but were still paying tax on fictive gains. A group of taxpayers challenged the tax in court, and won.

The Netherlands’ budget deficit last year pushed towards 2pc of gross domestic product (GDP), which is high by Dutch standards. Against that backdrop, the government baulked at moving straight to a CGT regime based on realised gains, which would substantially reduce the tax take.

A majority voted to go along with the tax on unrealised gains. But they signalled their reluctance by then voting for the motion that the Netherlands should switch to taxing realised gains.

For many ordinary taxpayers, the chief pain-point in the new system is that it has a much lower tax-free threshold. On the plus side, they will be able to carry forward paper losses against future paper gains.

But for those with fast-growing or volatile investments, the new system is potentially much more painful than the old one. The better your investments do, the more you’ll pay. And you’ll have to pay from your income, or else from selling involuntarily and at potentially the wrong time.

Wouter Leenders, a tax expert from UC Berkeley, says the particular hit to crypto investors explains why the change electrified social media.

“This is quite a big increase in their tax burden, so they are very vocal about this. They’re very active on social media, and it’s a very international community,” he says.

“That’s why I think this quite mundane tax change has generated so much international attention.”

The Dutch Senate has not yet voted on the change. It’s likely to pass that chamber as well, but it’s also likely to again stoke the fires of social media.

Even as wealth taxes seem to be kindling some momentum, they are also sparking up ever more controversy.

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