Replies to post #36154 on A.I.M. Users Bulletin Board (AIMUSERS)

[Conrad]

TooFuzzy, I certainly do not have "the dope" on US Taxation issues. No need to explain it. . .I have just figured out how it works here in Holland:-)

It is easy for me too as I have a very low income and no assets. . .I usually get money back from taxation that was applied to my pension.
If one has us less that about € 23000 Savings then that is exempt from Capital Asset Tax, but if one has more the income on it is above the TaxationThreshold. . . about € 10000 or so. . .It works like this here:

Investment Equity is say, average for the year € 100. . .Cap. Gain is assumed to be 4% . . .That = € 4.00.

They do not look at the real yield. If you real yield was more that 4% then the average value if the investment would be higher than € 100, and would be say € 105 if the investment gain is 10%. . .(Then the investor pays 4% on the € 5.00 assumed investment gain).

The € 4 gain on the € 100 is income. . .that is taxed @ 37% (next year) on the lowest income bracket:

Total Tax = 4*(1+0.37) = € 5.48 on the € 100 Investment Value or total Tax Rate = 5.48 %

However if you have other type of Assets . . like a € 250,000 Second Home, the asset tax is 1,5% and with a high income then one pays 52% income tax on all income. This then makes the total tax per € 100 Investment and € 100 on Assets

€ 1,5*(1+0,52) = € 2.28 Asset Tax per € 100 Asset Value

plus

€ 4*(1+0,52) = € 6.08 Investment Tax per € 100 Investment Value.

Almost every year these rules are changed to balance The Budget but I think for the last 13 years they do not managed to do that.

The deficits get bigger every year!