Joeri de Wilde: Wealthy Dutch people are hijacking the ‘middle class’ label
This column was originally written in Dutch. This is an English translation.
A strikingly large proportion of the wealthiest 20% in the Netherlands consider themselves to be middle class. Because this group is relatively vocal in the public debate, their interests are increasingly equated with those of the middle class, including by the middle class itself.
By Joeri de Wilde, Senior Economist at Triodos Investment Management
Earlier this month, I wrote an opinion piece in Trouw about the successful Box 3 lobby at the expense of the middle class. The responses to this made two things clear: many wealthy people find it difficult to look beyond their own immediate interests, and this is mainly because they do not sufficiently realise which wealth bracket they belong to.
Which middle class?
First, let’s return to the point from my opinion piece. Contrary to what many investment advisers and tax specialists would like us to believe, the Box 3 amendment does not primarily affect the middle class. After all, who has so many investments that this amendment makes a significant difference to their financial future?
Figures from Statistics Netherlands (CBS) show that the Netherlands has 8.4 million private households, of which, according to the AFM, around a quarter (2.2 million) invest. However, the total securities holdings of all these households (2024: €173.5 billion) are extremely unevenly distributed: the wealthiest 10% own over 82% of all securities and the wealthiest 20% even more than 90%. The middle class – the middle 60% of households by wealth – therefore has hardly any financial investments. This is confirmed by the CPB: financial assets (shares, bonds, deposits) are distributed much more unevenly than housing or pension assets.
The lobbyists are, incidentally, right on one point. The very wealthiest, who wish to contribute as little as possible to our society, remain out of the firing line. They have often long since moved their assets out of Box 3 via clever ‘tax optimisation’ (read: tax avoidance). The Box 3 amendment therefore mainly affects well-off households with substantial investment portfolios, but without a luxury yacht in Monaco or complex tax arrangements. It is difficult to maintain that they require protection under the guise of middle-class interests.
Self-interest first
Yet, in a way, it is understandable that this group of wealthy individuals is resisting so fiercely. They feel they are being disadvantaged compared to the super-rich. That feeling is not entirely unjustified. I have argued before that we must do something about this, because sparing the super-rich poses a threat to our democracy.
But what many affluent households overlook is that they are still considerably better off than the real middle class. In the Netherlands, labour is taxed more heavily than capital. Moreover, there seems to be a blind spot regarding the general benefit of tax revenue. Higher revenues can contribute to stronger public services and a more stable society. The gradual erosion of our welfare state and growing polarisation are often presented as laws of nature, just like low taxation on wealth. Few wealthy people are able or willing to recognise that these issues are interlinked.
The rich feel they are middle class
There is a logical explanation for this: many affluent households feel they are part of the middle class. They read about fabulously wealthy Dutch people who protect their wealth through complex arrangements, and conclude that they do not belong to that group.
At the same time, half of the 20% richest households now have little contact with the real middle class, according to a report by the Netherlands Institute for Social Research (SCP). In their social circles, they are therefore not exceptionally wealthy at all.
The result is a distortion of perspective: people compare themselves with the super-rich above them, but rarely with the large middle group below them.
Because this affluent group is well-organised and vocal in the public debate, their perspective is often presented as that of the middle class. It is therefore up to politicians to make that distinction clearer. If this does not happen, there is a risk that the real middle class will believe that its interests coincide with those of the affluent, whereas this is rarely the case. Moreover, society would benefit from the wealthy having a more realistic view of their own position.