Dutch Disease Is a Term Applied to a Problem in the 1970

question 8

Essay

Dutch Disease is a term applied to a problem in the 1970 whereby the Netherlands were experiencing massive and sudden inflows of capital from abroad. What was the cause of this sudden influx of capital, and what types of potential problems did it have for the Dutch or could it have for any small single resource country?

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Definitions:

Postpone Taxes

A financial strategy that seeks to delay the payment of income taxes on earnings through various tax-advantaged accounts or investments.

401k Plans

Retirement savings plans sponsored by employers that allow employees to save and invest a piece of their paycheck before taxes are taken out.

403b Plans

Tax-deferred retirement savings plan available for public education organizations, some non-profit employers, and self-employed ministers.

Tax Penalty

An additional charge imposed by the tax authority on a taxpayer for not meeting tax obligations or for errors in a tax return.