The employer is the last actor with room to move, and Belgium is tying its hands

As Belgians, we "enjoy" the highest tax wedge in the rich world. The OECD measures that wedge, the share of total labour cost that goes to income tax and social contributions. For an average single worker in Belgium it was 52.5 percent in 2025, the highest of the 38 OECD members. The OECD average was 35.1 percent (OECD, Taxing Wages 2026, Belgium).

In 2017 I wrote here that the level of taxation does not vex me. What does is "the often ineffective and inefficient way in which taxes are being used" (What matters about taxes). Eight years later, the money still does not close the gap. In 2025 the deficit was 5.2 percent of GDP, the value of everything the economy produces in a year. The European Commission expects 5.4 percent in 2027 (European Commission). The state keeps the price and trims the service.

So who steps in?

Before I answer that, a side note, because I am not neutral in this debate. I work for Pluxee. We issue eco-cheques, and we hold the account into which Flemish entrepreneurs pay their share under the KMO-portefeuille. Both measures in this piece touch our business. I am not going to convince anyone that I am neutral, but I am informed. As Harlan Ellison put it, "You are not entitled to your opinion. You are entitled to your informed opinion."

Three candidates for the gap

The citizen is the first answer people reach for. In this year's Test Aankoop consumer index, 55 percent expected their financial situation to get worse (Test Aankoop). People who feel poorer do not volunteer to carry more. I don't either.

The very rich are the second answer, and the usual fear is that they leave. A study of 45 million US tax records found tax flight "but only at the margins of statistical and socioeconomic significance" (Young and others, 2016). It does not cover Belgium, so I read it as indicative and nothing more. What I hear most often from that side is the objection I made myself in 2017. Would the money be spent well? An auditor learns one question before all the others: is the control actually controlling? The Court of Audit has just put i-Police, a failed project to digitise the federal police, at 139.4 million euro (VRT NWS). It is a federal file, but for scale, that is close to 5 percent of the 3 billion euro Flanders wants to save. Let that sink in for a minute.

Which leaves the employer, who sits next to every worker every month with a payroll and a reason to keep good people. Give employers a simple incentive and they will put money where the government wants it to go. Belgium built exactly such tools. In 2019 I called them the holy grail of policy making (Directive versus coercive policies), because they answer one question. "How do I enact policy while making others pay for it?" We are now taking them apart.

Two instruments, one design

The design is the point, so let me explain it. Employers and unions in the National Labour Council agree a list of products and services with an ecological purpose. The employer pays, up to 250 euro a year per worker. Because the money is tied to that purpose, it is exempt from income tax and social contributions. The government picks the goal, the employer pays, the worker chooses. In 2025 that was 333.5 million euro for 2.45 million workers, all of it spent in Belgium (National Labour Council, advice 2.498).

Now turn the same 250 euro into salary. At an average wedge of 52.5 percent, 250 euro of labour cost leaves about 119 euro in the worker's pocket. Converting an eco-cheque into salary is a pay cut with extra steps.

The Flemish KMO-portefeuille has the same shape, for companies. A small business that buys training or advice pays its own share first. Flanders then adds 30 or 20 percent (Vlaanderen.be). In 2024 the Flemish agency VLAIO paid out almost 43 million euro, and the companies themselves invested another 100 million on top (UNIZO). For every euro Flanders put in, small companies added more than two of their own.

Both are policy instruments. The government created each of them itself, in answer to a challenge, greener consumption for the one and training for small firms for the other. Those challenges have not gone away. If anything, they are bigger than ever. Yes, each instrument on its own is a drop in the bucket. But each one sets a direction, and scrapping it sets the opposite one.

The case and the counter-case

The federal coalition agreement of 2025 wants fewer types of cheque. In my translation, the other cheques will be phased out "in consultation with the social partners" and "to preserve purchasing power". Only the meal voucher stays (coalition agreement). Every exemption is revenue the treasury does not collect, and I understand that.

But the agreement set its own condition, and the social partners have tested it. On 22 September 2026, employers and unions in the National Labour Council examined three ways to replace the eco-cheque. None preserves purchasing power, they concluded unanimously, so they asked to keep it (advice 2.498). When employers and unions sign the same advice in Belgium, read it twice.

Flanders has already decided. From 1 January 2027 companies can no longer use the KMO-portefeuille (Septemberverklaring 2026). A government that cuts the measures in which others put in more money than it does is cutting its own lever.

Growth, and who writes the budgets

I heard Scott Galloway say on the Pivot podcast that in business, growth kills most problems. A company that only cuts gets smaller, and its problems rarely shrink with it.

The same holds for a country. The European Commission expects Belgium to grow by 0.7 percent in 2026 and 0.9 percent in 2027, with consumption weakening (European Commission). At that pace, cutting alone will not close a deficit above 5 percent. Flanders gave its September statement the title "Meer groei voor Vlaanderen", more growth for Flanders. The same statement scraps the KMO-portefeuille.

My suspicion is experience. Too few of the people who write these budgets have ever had to meet a payroll. Frederik Verleden traced the professions of Belgian members of parliament back to 1831. Employers, from industrialists to the self employed, once held about 30 percent of the seats in the Chamber. By 2014 they were down to about 10 percent (SamPol, April 2014). Those figures are twelve years old, so take them for what they are worth. Cutting balances a ledger. Only growth balances a country. We are driving with the handbrake on and calling it consolidation.

A posture, in three questions

I have no framework to sell, only a posture, and it starts with three questions. What do I want to pay for as a citizen, through my taxes? What do I want to pay for as a user, when I use a service? And what do I want to receive from my employer? For a long time the first answer covered almost everything. With every i-Police, it gets harder to trust the state with that much.

A government that cannot pay for its goals should welcome anyone willing to pay for them, and make it easy. Through their taxes, employers already pay for every policy goal indirectly, and part of every euro gets lost on the way. The eco-cheque is direct. The state sets the goal, someone with money and a stake pays, and the person closest to the need decides. No i-Police stands in between.

So before an instrument of that shape goes under the axe, ask who pays for it today and who pays once it is gone. For the eco-cheque, the answer today is the employer. Tomorrow it is the worker.

A broke state should not cancel the money other people put behind its goals. Our employers need this. So do our workers.

Think about it.