Paper gains, very real taxes

There is a simple principle that has underpinned sensible investment taxation almost everywhere: you pay tax when you actually make money, meaning when you sell an asset and pocket the proceeds. The gain must be real, not merely a number on a screen, before the government arrives to take its share. The Netherlands is now proposing to abandon this principle. Starting in 2028, the Dutch government plans to levy a 36 per cent tax on investment returns that includes unrealised gains – meaning the increase in the value of shares, bonds and other assets that you still hold and have not sold. If you buy shares for a hundred euros and they are worth a hundred and thirty euros at the year's end, you owe tax on thirty euros of gain that exists only on paper, and which could easily vanish the following year. The Dutch have a particular reason for this peculiar step. Their Supreme Court struck down the old system, which taxed a not