The Netherlands is the next jurisdiction that seeks to punish investors by taxing unrealized capital gains.
The state of California has been in the news quite a bit recently in regard to its possible confiscation tax that targets wealth investors and shareholders. The obtuse policy, which is expected to be a ballot initiative and thus immune from a veto, has caused up to $2 trillion in wealth to flee the state, with Florida ending up as the biggest beneficiary of the proposed tax.
Shopify CEO Tobi Lutke posted that the new Netherlands tax is the “dumbest thing any government on planet earth is pursuing right now. And that’s saying something.”
The Dutch legislature approved the rule change that assesses a 36% on unrealized capital gains, including crypto holdings.
The bill passed on February 12, 2026, and will take effect in 2028, taxing annual returns on assets like stocks and bonds without requiring sales. Of course, this may prompt investors to sell assets they would otherwise hold.
If the asset’s value declines, it could even go to zero; there is no recourse for reimbursement.
It has been estimated that without the new tax, the government would face annual revenue losses of around €2.3 billion.
But these estimates do not consider how many investors will leave the Netherlands, with the wealthiest anticipated to leave due to the onerous tax punishment.
While politicians have approved the change, it is widely understood that no country has ever successfully and broadly implemented an annual tax on unrealized capital gains. One must wonder if they understand the Laffer Curve.
It is unclear why politicians did not choose the alternative path of reducing government expenditures and encouraging growth by incentivizing investment.
The Dutch government is forced to drop the current system because the court ruled it’s illegal (assuming a profit on assets), which it is.
Now they’re doing this, outrageously short sighted, unfair, and stupid.
If I wasn’t already leaving, this would be the nail in the…
— Seb Hoffmann (@zelos808) February 13, 2026