In Ask Sherry

Ask Sherry: Would I want to live in a rich country that taxed me?

You asked, and I am answering every Friday once I have enough questions!

https://docs.google.com/forms/d/1DKFg6SD0Kmb_0U5yb4OTNfkvfmsf5dWxJJbZTzUtH7M/edit

You can ask any question using the form here.

You can ask any question using the form here.

Hi, I was wondering if you plan to do a buy vs rent review/analysis now that it’s been a while that you became a home owner and you can see the different perspectives of both of them, I myself am still reluctant to become a home owner.

Yep. Did that this week. You can read the post here.

What do you think about Squarespace? I’m maybe interested in starting a blog and I like Squarespace themes better than WordPress ones, but *everyone* seems to use WordPress. That must be for a reason right?

Squarespace is great if you don’t want to deal with DIY themes and do anything but BLOG and be done with it.

They deliver themes that are out of the box, beautiful, integrated, and easy to use. Where they fall short is in DIY and customization.

The DIY part, means you will pay for this beautiful service every month on top of hosting fees and so on. The customization part is that you kind of can’t do what you want. You have to stick with what they are giving you, no ifs, ands or buts. I also cannot recall if they allow you to do ads or not.

I’m with WordPress (self-hosted, NOT WordPress.com), and everything is DIY on my end. It has its pluses and minuses but it is better than paying $144 USD a year for something I feel I can do on my own, even if I muck it up once in a while.


Plus, I’m a control freak.

Would you live in a prosperous country if there was a tax on savings and investments (on the principal, not on the actual bank interest or stock market profit)? Let’s say the tax is between 1.2% to 1.6% yearly.

It depends. I’m leaning towards NO but I don’t have enough information to definitely say so.

Let’s just look at at the numbers — if I had a million in assets, I’d pay $16,000 a year? For what exactly? Oh and does “investments” also mean the principal home I live in?

I better be getting that money back in some other way, either in lower taxes, or in some sort of benefit.

If that $16,000 a year was on top of the 50% tax I pay for income, plus my housing taxes for my home, plus everything I pay for right now, then no.

If that $16,000 included many great benefits that would justify that amount in the services and other breaks I receive, then yes.

Still have a burning question?

You can ask any question using the form here and all of my previous Ask Sherry posts are here.


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Sherry of Save. Spend. Splurge.

I got out of $60,000 of debt in 18 months using TheBudgetingTool.com. Since then, I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K (savings rate = 85%). I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I also post daily on Instagram @saverspender.

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4 Comments

  1. anne

    Hi, guys.

    Unfortunately, such a tax exists and I also find it absurd.

    In the Netherlands, there is a tax called the “Box 3” tax which taxes worldwide personal savings and investments, not on the actual profit, but at a percentage established by the government (based on a fictitious profit).

    As of 2017, the effective rate varies from 0.86% up to 1.6 % each year, depending on the value of the net wealth on 1 January of the calendar year.

    The exempt amount is 25.000 EUR per person (all assets except main residence). What is above that amount is taxed. The said tax doesn’t apply to the personal main residence, but any real estate that is not one’s main residence (rented or not) is taxed yearly according to the deemed value of the property. The same percentage applies.

    Links:
    The official tax site: https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/individuals/tax_arrangements/living_abroad/non_resident_taxpayer_status/income_in_multiple_boxes2/assets_in_box_3

    Other links:
    https://www.linkedin.com/pulse/box-3-tax-2017-more-12-arnold-waal
    https://www.expatax.nl/box-3

    I agree with the reader above. This tax, which I find unfair, doesn’t encourage people to save. Whatever they have, they put it in the private pension schemes and live for the retirement age which is set, for now, at age 67.

    The Netherlands is a nice country, but this tax is a deal breaker and I find it absurd. Not everyone wants to wait for retirement at age 67 or more so that they can enjoy their hard earned money, for which they already pay 50%+ income tax.

    Reply
  2. Kathy

    The thought of paying taxes on my savings is absolutely repugnant to me. To think that I pay tax on my income, manage to save a portion of what is left after that tax and then the government says “hold on, we want some of that also”. It is money already taxed and the unintended consequence would most certainly be fewer people bothering to save or invest.

    Reply
    1. Sherry of Save. Spend. Splurge.

      Agreed. I don’t think this is a real country however.. 🙂

      Reply

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