Tax Policies from Dutch Coalition Deal Leak

Dutch prime minister Mark Rutte greets Lithuanian president Dalia Grybauskaitė in The Hague, June 21
Dutch prime minister Mark Rutte greets Lithuanian president Dalia Grybauskaitė in The Hague, June 21 (Presidency of Lithuania/Robertas Dačkus)

Christian and liberal parties are expected to form a coalition government in the Netherlands next week.

The public broadcaster NOS has learned they are planning various tax reforms:

  • Tax reform: Income tax brackets will be reduced from four to two.
  • Tax relief: For the elderly and middle incomes.
  • Profit tax: Will be reduced from 20 to 16 percent for small companies and from 25 to 21 percent for larger companies.
  • Sales tax: The low, 6-percent value-added tax rate on basic goods will be raised to 9 percent. Standard VAT rate will remain 21 percent.
  • Home mortgage interest deduction: Will be reduced to 37 percent, effectively raising taxes on especially wealthy homeowners. Read more

Democratic Ideals and Reality: An Enduring Tension

Portrait of Halford Mackinder
Portrait of Halford Mackinder (James Lafayette)

A century ago, a British member of Parliament and geographer, Halford Mackinder, wrote one of the famous books of geopolitics, Democratic Ideals and Reality. The book discussed the tension between what nations want (“democratic ideals”) and what they often get (geographic “reality”).

That tension seems especially topical this week. Read more

Election Reveals Brexit- and Trump-Like Cleavages in Germany

A far-right demonstration in Leipzig, Germany, September 22
A far-right demonstration in Leipzig, Germany, September 22 (De Havilland)

Germany’s federal election revealed many of the same cleavages we have seen in America, Britain and France, Alexander Roth and Guntram B. Wolff report for the Bruegel think tank:

  • Urban-rural split: Support for the far-right Alternative for Germany party was low in the cities but high in the countryside.
  • Old versus young: Districts with a higher share of elderly voters were more supportive of the Alternative.
  • Education: There is a strong correlation here. The better educated Germans are, the less likely they were to vote for the Alternative.
  • Income: Higher disposable household income is associated with lower support for the Alternative, however, areas with high unemployment were also less likely to vote for the far right. Read more

Trump’s Welcome Change of Heart on South Korea Trade Deal

Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2
Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2 (White House/Shealah Craighead)

American president Donald Trump appears to have changed his mind about a trade deal with South Korea.

As recently as a month ago, there were reports Trump was on the verge of withdrawing from the agreement.

Now American and Korean trade negotiators have agreed to amend the treaty in order to make it “fair” and “reciprocal”.

I doubt changes will really make the pact fairer and not more favorable to the United States. But that would still be better than canceling it. Read more

World Won’t Let Catalonia or Kurdistan Come Quietly Onto the Map

Catalans demonstrate for independence from Spain in Barcelona, October 3
Catalans demonstrate for independence from Spain in Barcelona, October 3 (Fotomovimiento)

Catalonia and Kurdistan couldn’t seem farther away. One is nestled in the peace and prosperity of Western Europe, the other swims in the chaos of a dissolving Middle East.

Yet the two independence referendums of these would-be nation states are revealing. Both raise questions about the meaning of their regional orders and have provoked pushback from the status-quo world. Read more

Countries That Almost Existed

The world could soon add two new countries. In Catalonia and Kurdistan, referendums have been held to secede from Spain and Iraq, respectively.

Neither would be universally recognized. Spain doesn’t even recognize a Catalan right to self-determination. Iran, Iraq and Turkey all oppose Kurdish statehood.

International recognition is often a stumbling block for would-be states. Consider the likes of Kosovo, Somaliland, South Ossetia and Transnistria.

Others don’t even get to that point. Here is a selection of countries that remained on the drawing board. Read more

British Conservatives Face Three Structural Challenges

British prime minister Theresa May attends an EU summit in Tallinn, Estonia, September 28
British prime minister Theresa May attends an EU summit in Tallinn, Estonia, September 28 (EU2017EE/Annika Haas)

The United Kingdom’s Conservative Party has arguably been one of the most successful political parties in the Western world. It dominated British politics from 1886 to 1906, from 1918 to 1945, from 1951 to 1964 and from 1979 to 1997. It is now in government since 2010.

Yet, as the party assembles in Manchester this week for its annual conference, there is a sense of decline. Conservative membership is down. Brexit has cost them the youth vote. And the political landscape has shifted in Labour’s favor. Read more