How Belgian Government Robs 150.000 Euro

The elections campaign is in full speed in Belgium. And we only hear one message “let the rich people pay more taxes !”. One party talks about a wealth repository (with even your wine and books collection, how crazy can it get?) and the other party wants more than 12 billion ADDITIONAL taxes. In today’s blog post, I want to reflect on an article I read from the freelance journalist Stefan Willems in the VFB magazine.

Stefan is a freelance journalist sharing financial news before it’s news. He is specialized in investing and financial markets and writes in his own name. You can find him on Twitter as @Financefilosoof.

Recently he released a manifest for a new political party “The Retail Investor” that raises a voice for the retail investor against more government taxes and a new required mindset for politicians. In times of elections, it is time to take a look at the past and what was decided so far by Belgian governments…

How Belgian Government Robs 150.000 Euro from Dividend Investors

It is already proven by many investors that dividends represent a significant portion of your return. Stefan calculated the impact of dividend taxes on the total return of a dividend investor. The Belgian government has in the past years imposed more and more taxes on the retail and dividend investor. It started with the government of the socialist DiRupo and within 5 years the taxes increased from 15% to 30%. In below table you can see the impact of the increased taxes.

A dividend investor can start with 10.000 euro and invest 25 years with an additional 6.000 euro per year until his retirement. Dividend stocks at the Euronext Brussels give a gross return of 3.4% on average and the stock markets gave us a nice return. Stefan assumes 3.5% increase per year. A total return of 7%. All dividends that are received, are immediately reinvested to maximize the compound interest effect.

So what does this result into?

After 40 years, you will have a portfolio of 1.027.557 euro. You will also have paid 136833 euro taxes. Auuch ! If we apply the old tax regime of 15%, you have achieved a portfolio of 1179381 euro. At least 151824 euro more !!

Conclusion is that a young investor who saves every year 6000 euro and disciplined invests it in his portfolio, will have paid 150.000 EURO more thanks the last Belgian governments who increased the taxes from 15 – 30%. This calculation is excluding the stock transaction tax and other taxes that were increased in the past years.

My Personal Opinion

The article of Stefan Willems shows how much the government is taking away from your wealth. The Belgian government is an aggressive pirate robbing away your personal wealth. The impact would be much bigger if we would add the stock transaction taxes with each purchase. That is a discriminating and criminal tax. During the past blogger conference in Budapest, I showed the following taxes overview. It is a chart that Belgian politicians like John Crombez from socialist party SPA and other parties should hang above their bed… This is what 20 years of socialist governments has resulted in.

Has the last government been better without socialists ? Not really as the taxes keep on increasing. The CD&V kept on pushing for new wealth taxes. It is amazing how political parties keep on proposing new taxes.  That’s ONE of the reasons why I will leave this country ! Belgium governments are addicted to spending and inventing new taxes.

Winston Churchill said that a state who tries to create wealth by imposing more taxes, is like a man in a bucket who tries to lift himself up with the handle.

What Belgium really needs is a shock therapy to change behavior. Something like a picture of your lungs on a pack of cigarettes. Maybe take 30-50% of the government pay if the budget is not break-even.

Currently the Belgian parties and government is still in denial phase. It’s like saying….oh no cigarettes are not bad for your health.

I don’t see any REAL change. I wondered what a real CHANGE political party needs to look like…I would say we need less government, less taxes, less kafka, less spending, …

Do the politicians have the ambition to make Belgians poor ? Did you know what makes the difference between the rich and the poor ?

The rich invest in their knowledge and know how to make money from money. The poor don’t want to invest in themselves, are jealous on others and simply want to take it from others. Don’t give me excuses you can’t. Then you have a mindset problem. You only see obstacles and not solutions.

Final Words

Personally I will continue to invest in different investment strategies. High dividend paying stocks and ETF investing will remain my bread and butter strategy but I consider my investment strategy more like a swiss knife. You should be able to know how to make money from other money like the banks. If a bank can do this, why can’t you do the same ?

It’s simply information and a system. That is the difference between the rich and the poor. If you would take all wealth from the world and redistribute it to the poor, what do you think would happen next ? Within a few years the same people would have again the wealth as before. Why ? Because they have the knowledge to replicate money from money and they have the mindset to execute…they do not complain and don’t listen to others.

This is the end of this blog post.

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