[00:02] investors are worried. The Netherlands plans to approve this law.  Let me explain with an example.  As of today you have €10,000 invested in index funds.  Typically, if during the year it grows to €11,000 you have had €1,000 of
[00:17] unrealized profits, you don't sell them. This is for the long term with index funds.  Typical.  This law states, "Since you have €1,000 in profit, even if you don't you have €1,000 in profit, even if you don't sell, you pay taxes. 36%, €360
[00:31] in this case." Sounds like a joke, right? Well, it's not. Hey, what happens if the following year my portfolio, worth €11,000, drops back to €10,000? Which can easily happen because in these types of long-
[00:45] term investments, portfolios are very volatile, going up and down in the short term. So, going up and down in the short term. So, what do you get back from these €360 you've already paid in taxes? No, what you do get is a tax credit
[00:58] for the taxes you paid, the €360 in case your investment grows again in future years. If you have to pay taxes again, at least they deduct what you already paid, which would be the last straw. Even so, it already has two
[01:12] serious consequences. One is that you've had to pay taxes on money you might not have; you haven't sold those investments, and you might have to take it from somewhere else.  You did n't want to sell your investments at a loss. And second, and much worse, you're killing
[01:26] compound interest. These investments, designed for the long term, where profits also help each other grow—the snowball effect compound interest—no longer applies. You
[01:38] that this law hasn't been approved yet and is only in the Netherlands, but it could be tested some political parties are already taking note of it to implement it.