Les Engagés' proposal to tax wealth above €500,000: The MR says stop to tax fury!

The proposal

Les Engagés propose an annual progressive contribution on financial wealth exceeding €500,000. Rates would range from 0.15% to 0.60% depending on the wealth brackets. They announce a potential yield of €1 to 2 billion, while noting that this figure should be objectified by the Federal Public Service Finance.

Real estate is not directly targeted. But that is precisely where the debate becomes misleading: as soon as a property is sold, for example a house inherited from parents, the proceeds of the sale become financial wealth. It could therefore fall within the tax base.

In other words, citizens are told: “your house is not taxed”, but if you sell it and the money ends up in an account or is invested, it becomes potentially taxable every year.

2. This is not a tax on the “ultra-rich”

The term “large fortune” gives the impression that we are talking about billionaires or exceptional wealth.

But €500,000 in financial wealth is not necessarily a large fortune.

This can be:

• a self-employed person who worked their whole life;
• an SME owner who sells their business after 30 or 40 years of work;
• a couple who saved for retirement;
• someone who sells an inherited house;
• someone who sold a flat or house bought long ago;
• a family who received an already-taxed inheritance.

€500,000 may seem high, but it can correspond to the proceeds from selling a house in Brussels bought in the 1980s, or to the capital built up by an entrepreneur after a lifetime of work.

So this is not a tax on the ultra-rich; it is a tax that can hit savers, self-employed people, entrepreneurs and families who have built up or received capital over a lifetime.

Moreover, as Odoo's CEO pointed out in a widely noticed LinkedIn post, this tax targets “wealth” even when it has not been realised. Thus, the head of a company would end up having to pay tax on it even if it generates no income. Imagine a garage owner whose garage is passed down from generation to generation. If the value of the garage within the company exceeds €500,000, the garage owner will end up paying tax, even though that money is not in their bank account. If the company runs into difficulties and has to be liquidated a few years later, the tax will obviously not be refunded.

It is an anti-entrepreneurial and lazy tax: a tax is levied to avoid having to make the necessary reforms.

3. Wealth has already been taxed

Financial wealth does not fall from the sky. It generally comes from:

• income from work;
• professional income;
• dividends;
• the sale of a business;
• an inheritance;
• the sale of a property;
• savings built up progressively.

These amounts have already undergone several layers of taxation.

Before even building up this capital, the citizen has often already paid:

• personal income tax;
• social security contributions;
• VAT on their consumption;
• withholding tax on financial income;
• property tax when they owned a property;
• registration fees on a property purchase;
• inheritance or gift duties;
• the securities account tax for certain assets;
• and now a capital gains tax under the federal reform.

The proposal from Les Engagés adds a new tax layer on capital already taxed at several stages of its formation.

This follows a whole series of taxes on entrepreneurs already adopted in recent years:

• capital gains tax
• doubling of the securities account tax
• doubling of withholding tax to 30% and increase of the start-up withholding tax to 18%
• increase in the minimum remuneration of company directors
• taxation of capital reductions
• taxation of tax-exempt investment funds (subject to new conditions)
• taxation of liquidation bonuses
• increase in taxation on insurance contracts
• revision of exemption rules for individual pension commitments
• general limit on benefits in kind to 20% for company directors
• increase in the stock exchange tax (including taxation of foreign transactions)
• tightening of the tax-exempt income conditions (dividend exemption within corporate groups)
• limitation of loss deduction for companies (basket rule)
• taxation of company headquarters transfers
• Cayman tax and CFC rules increasing taxation of foreign investments (partially struck down by the Constitutional Court but not yet reformed)
• indexation of the corporate contribution
• reduction in the refund of professional diesel
• revision of QFIE rules (tax credit for foreign withholding tax paid)
• etc.

Where and when will the left stop taxing?

The MR's position is simple: we cannot keep asking the same citizens, again and again, to pay on the fruits of their work, their savings or their risk-taking.

4. It is an attack on savings

This proposal opens the door to an annual tax on financial savings.

Even though the text refers to “financial wealth” and not just “savings accounts”, the logic is exactly that: as soon as a citizen has set aside, invested or placed capital, the State could come back every year to levy an additional contribution.

The signal being sent is very bad:

“Work, save, invest, take risks… and if you manage to keep some capital, the State will come and tax it again.”

For the MR, this is unacceptable.

Saving is not a privilege. It is often a form of security:

• for retirement;
• for the children;
• for healthcare;
• for unforeseen circumstances;
• to pass something on to family;
• to invest in a business.

A society that penalises saving discourages individual responsibility.

5. It is bad for investment, SMEs and employment

Financial wealth is not inherently dormant money.

It can finance:

• SMEs;
• start-ups;
• family businesses;
• investment funds;
• corporate bonds;
• innovation;
• the real economy.

Belgium needs private capital. It needs entrepreneurs, investors, people willing to take risks.

If we tax capital more heavily, we reduce the country's attractiveness and send a negative signal to investors.

This is a point the MR must keep hammering: we will not create growth, jobs and future tax revenue by discouraging those who invest.

Belgium already suffers from very high tax pressure and an insufficient employment rate. The priority must be to create more activity, not to tax more heavily those who create, invest or save.

6. The announced revenue is uncertain

Les Engagés speak of €1 to 2 billion in revenue. But this figure is a political estimate, not a guaranteed return. Les Engagés themselves acknowledge that the yield should be objectified by the Federal Public Service Finance.

Wealth taxes provoke behavioural reactions:

• restructuring of assets;
• transfer to other forms of wealth;
• capital flight;
• change of tax residence for some taxpayers;
• reduction in investment;
• proliferation of optimisation schemes;
• significant administrative costs.

The Federal Planning Bureau itself points out that a tax on large fortunes can trigger numerous taxpayer reactions, which have often led to the abandonment of this type of tax in other countries.

So the actual yield may be far lower than the announced yield.

7. This does not work elsewhere

International experience shows us that this does not work.

The OECD points out that periodic net wealth taxes have become much rarer: in 2017, only four OECD countries still applied this type of tax, compared with twelve in 1990. The OECD explains this decline partly through considerations of economic efficiency and administrative burden.

The French case is also telling. France abolished the former ISF on overall wealth and replaced it with the IFI, focused on real estate. France Stratégie notes that this reform brought France closer to the majority of countries where there is no annual tax on movable wealth.

More recently, debates around the Zucman tax in France have already had very concrete effects: even before any adoption of this proposal from the left, French capital was massively moved to Switzerland and Luxembourg, with €13.8 billion transferred to Luxembourg life insurance in 2024 alone (+58%). This phenomenon illustrates a well-known reality: wealth tax proposals lead to capital flight, thereby shrinking the taxable base accordingly.

If the annual wealth tax were a simple, effective and profitable solution, most developed countries would not have abolished or reduced it.

8. The fiscal ratchet effect: today €500,000, tomorrow less?

Today we are told: “only financial wealth above €500,000 will be affected”.

But once a new tax exists, the political debate changes.

Tomorrow it will be easy to:

• lower the threshold;
• raise the rates;
• broaden the base;
• include other forms of wealth;
• abolish certain exemptions.

Fiscal history shows that a tax created as exceptional or limited can gradually become much broader.

The MR must therefore reject the principle from the outset.

9. The real Belgian problem: public spending

Belgium's budgetary problem is not that citizens do not pay enough taxes.

Belgium is already a country with an extremely heavy tax burden.

The real problem is the level of public spending and the inefficiency of certain structures.

The MR must defend a different approach:

• reduce unnecessary spending;
• simplify the State;
• reduce the number of political mandates;
• fight social welfare abuse;
• reform the civil service where it is too heavy;
• improve the employment rate;
• stop poorly managed pharaonic public investments;
• focus the State on its essential missions.

We can cite in particular:

• abuses in social policy;
• false sick leave claims;
• beneficiaries of social aid who should not have access to it;
• the excessive number of political mandates;
• certain disproportionate public spending, notably at SNCB;
• the fact that the State deals with too many things.

The MR's view is clear: political courage does not mean creating a new tax. Political courage means cutting spending, reforming the State and lowering the tax burden.

10. Conclusion

Les Engagés' proposal is a poor response to a real problem.

Yes, Belgium must put its public finances in order.

But no, the solution is not to invent a new annual tax on the financial wealth of Belgians.

This wealth has already been taxed. It comes from work, savings, investment, entrepreneurship or sometimes from an inheritance already subject to inheritance duties.

Even though real estate is not directly targeted, the proceeds from selling an inherited or long-held property could fall within the tax base as soon as it becomes a financial asset.

This tax is therefore unfair, economically dangerous, administratively complex and budgetarily uncertain.

The MR's position must be firm:

Belgium does not need a new tax on savings and capital. It needs less public spending, more work, more investment and more reforms.