To a Happy and Healthy 2054!

Aug 3

As we welcome the new year, we look back at the crucial moments from 30 years ago that changed everything…

All our best wishes for the new year 2054! We hope all your dreams will come true. Looking back on the wishes we made 30 years ago, we are very satisfied. The well-being of all Belgian citizens is at the centre of every policy decision that is made. Schools are properly funded, the air is clean, bike lanes are safe, and all people are treated with respect. After the 2024 Belgian federal elections, the country entered a new era. Belgian governments had started taking the climate crisis and wealth inequality more seriously than they had ever before. With more Greens in power and active participation of citizens, a truly sustainable society was being built day by day, bringing us to the society as we know it today, on January 1st, 2054.

We remember back in the 2020’s, like the rest of Europe, Belgium found itself stuck in what we know today from history books as ‘the big polycrisis’. The decade had started with the COVID-19 pandemic, followed by a cost of living crisis, whilst destruction caused by the climate crisis became even more rampant. As the decade went on, this reality was a sad and seemingly more and more hopeless one. Yet, it was not a surprising one, as the emergence of all these crises could be traced back to the same source: inequality.

Again, Belgium was not the only country experiencing this polycrisis. In 2021, over 50% of global income went to only 10% of the population, whilst half of the global population recieved only 8.5%. Meanwhile, the poorest half of the population held a mere 2% of global wealth, whilst the richest 10% possessed a staggering 76%.

In Belgium, the richest 10% of households owned an estimated 47% of the wealth in 2021. In 2023, the year before the big shift, this 10% of richest Belgians were estimated to own as much as 60% of the country’s wealth. These numbers are most likely an underestimation; at the time, Belgium did not yet have an asset register.

If you would have asked Belgians in the street what they thought about the ethics of this wealth distribution, the chances are high that someone would have responded with: ‘They are very smart people with innovative ideas, who worked hard for their money and earned it!’. Or: ‘Raising taxes for them? Aren’t we all paying enough taxes already?’. Others might reply with a more supposedly altruistic concern, wondering if state intervention and wealth taxes should be raised: ‘What about the economy?’ These questions were frequently brought up by people wanting to tackle this inequality, leading to heated discussions in cafés and around kitchen tables. Although the Belgian opinions were quite divided and taboo, even in 2023 the evidence was clear: YES, inequality is a reality, it is bad, it has detrimental consequences for ecosystems and societies as a whole, and it needs strong state intervention to be tackled.

Urban legends of the neoliberal era

To understand the argumentation of Belgians in the early 2020’s, we need to understand the zeitgeist of the time. One myth was playing a fundamental but dangerous role in the neoliberal narrative and daily lives of Belgians: the so-called ‘meritocracy’. This myth states that ‘power’ or ‘success’ is an individual merit. Of course people getting into high positions in businesses or politics oftentimes worked hard in their strive for success. Yet, the truth is that not every Belgian started their journey at the same level playing field. Many of the people that ended up in top positions and were deemed ‘powerful’ and ‘successful’ had been born into it.

As a believer of this myth, the opposite would be deemed true as well: if you are struggling financially, this is a consequence of your individual choices. Ending up in poverty was seen as an individual failure, a consequence of the lack of a hard work ethic, intelligence and discipline. This position in society was thus deemed ‘deserved’ as well. A detrimental thought, causing harm to people living in poverty and facilitating policies that fought the poor instead of fighting poverty. For generations, capital had been accumulating in richer Belgian families. At the same time, people at the bottom of the hierarchy were unable to escape the cycle as the inequality gap grew and grew and they were pushed to the margins.

Although this was the reality many people lived, it was not perceived this way by the general public. People believed strongly that innovation would lead to progression for society at large and wealth would automatically ‘trickle-down’, benefiting everyone. Three decades later, we know that the illusion that deregulation and tax cuts for the rich would benefit us all has proved to be disastrous. In causing a concentration of wealth in rich families and companies, governments opted to adopt austerity measures and cut social spending. The neoliberal decades of trickle-down madness had led to soaring inequality and a stagnation, and in some cases even a decline, in wages and wellbeing.

The social and ecological consequences were enormous. Some companies had so much money, they were able to sway the public opinion and lobby regulations. It might be hard to imagine and recollect this for younger generations, but your parents, uncles, aunts, and grandparents will remember this period of their lives. Banks were able to fight against regulations to prevent financial crises, the fossil fuel industry fiercely fought against the green transition, Big Pharma coldly protected their patents and profit, even during a global health crisis, chemical companies minimised the danger of their products and blocked regulations, all for profits’ sake, at the expense of people and their environment.

Sucked into the whirlpool of the global market

Apart from narratives among Belgians, there were very real economic obstacles too for Belgium as a small country in the world to transition to the wellbeing economy we know today. For one prominent example, there were the corporate taxes. Belgium got sucked into the race to the bottom, a detrimental characteristic of the global market at the time. In an attempt to stay economically relevant, the general corporate tax rate was lowered from 34% to 25%, by the government led by Charles Michel, the nepo baby who became President of the European Council. Many exemptions and tax credits were created that resulted in even lower effective tax rates, in an attempt to persuade companies to invest in Belgium.

These exemptions had names like ‘notional interest deduction’ and ‘excess profit ruling’. This went so far that a committee of the European Parliament actually concluded that “Belgium, alongside six other EU countries displayed traits of a tax haven and facilitated aggressive tax planning.” The result of this tax competition was a global decline in tax revenues, impoverishing governments, while corporate profits were on the rise. At the same time, and partly because of this, the taxes on labour in Belgium were the highest in the OECD.

On top of that, it was hard to develop an effective fiscal policy in Belgium. While the Belgian tax service knew exactly how much your income was, there was no registry for wealth, what we now know as the Belgian asset register. It became clear that tax competition between countries was a real race to the bottom, in which companies and rich individuals kept on moving to the country with the lowest tax rate. People like Gerard Depardieu moved to Belgium in 2012 when the French government decided to raise taxes on its richest citizens. No more explanations are needed to understand that this was the perfectly fertile Belgian soil for income and wealth inequality to flourish.

The breaking point

The polycrisis of the 2020’s forced citizens and policymakers to reconsider the concentration of wealth as the status quo. Globally, the environmental and social challenges were dire. In Belgium, government debt was soaring, meaning that funds to combat these crises were lacking and the public investments needed to break the vicious circle were not available either.

The breaking point came in 2024, when a tax shift was implemented from labour towards higher incomes, wealth and pollution. The new, young, green, and progressive Belgian government made a much needed decision. The transition towards the society we know and love so much today started there. They put an end to the ‘notional interest deduction’. At the European level, the European Commission started investigating the system called ‘excess profit ruling’. A global agreement on a minimum taxation of multinationals, in which the EU played an important role, was the start of a fairer global tax system. The development of a European asset register helped governments to fair fiscal policy and stop the race to the bottom. Once more, international collaboration was key to crucial developments.

In 2054

Once the soaring inequality of the 2020’s was tackled by comprehensive and equitable tax laws, society changed its mindset and used the resources of a fairer tax system to build a better future for everyone. All wages and social benefits were raised to meet the poverty threshold, finally doing what had been impossible for decades: ending poverty. Massive investments in social housing helped to solve the housing crisis. Housing became affordable for all.

Thanks to large-scale renovations buildings became energy efficient, benefitting both the climate and people’s energy bill. Waiting lists in health care, which were a very real problem back in the 2020’s, have become an issue of the past thanks to increased investments. The population benefits from affordable and accessible physical and mental health care. Education is accessible for all, and no child sits in the canteen with an empty lunch box, as schools offer healthy and sustainable meals for free. The public transportation network has been expanded, providing access to all whilst remaining profitable. Everyday, workers reach their nearest train station by bus, foot, or bike. For the first time in history, Belgian trains are running on time.

Investments in cycling infrastructure led to a real bike revolution. Separated bike lanes resulted in safer and less stressful cities, whilst the tramways and buses share the rest of the road with the few remaining cars in towns. Cyclists are protected from the heat waves by the numerous trees alongside their lanes.

Of course, not everyone lives in a big city, yet citizens now use reliable and less polluting solutions to reach their destinations. Travel time is shortened since fewer people are on the road now that the 4 day work week has become the standard and home-offices have been adopted by many professions. With the additional free time, many people have been able to take an active part in their local communities, developing meaningful activities for children, cultivating local gardens or spending time with the elders who are happier than ever to find this company.

Through public investment in renewable energy, solar and wind power have become more efficient and more widely used than ever. Fossil fuels are nothing but a fever dream of the past. The transition towards renewables was crucial to averting a climate catastrophe. Energy monopolies came to an end. Renewable energy, produced by cooperatives, helped societies to have more control over their energy and lower the energy bills. As inequality diminished, we saw how democracies regained strength. People saw through populist lies, calling them out instead of voting them in. Both the myths of meritocracy and trickle-down economics no longer dominate the public narrative today. Solidarity and sustainability are now at the core of society. This didn’t happen overnight, but that first step thirty years ago was crucial.

As a reader, you might wonder why we are describing our life in 2054 in such a detailed and enthusiastic way. Well, three decades ago, this present day reality felt like a faraway, almost impossible utopian dream. This is a beautiful reminder that with cooperation, across countries, occupations, class, and generations, so much is possible. We did it. Together we paved the way, step by step, to the future we envisioned collectively. Today we celebrate and cheer, to a happy and healthy 2054 that we built together!

[Read this piece and others in our Annual Edition 2023: Tax the Rich!]