Norway doesn't care. It is a country with a reputation for good governance and northern-European economic strength. But economically, it is a country that is largely a gas station: like a democratic Russia with more competent governance.<p>Over half its economy is based on oil and mining. It has failed to develop meaningful economic diversification, and, because it has wisely banked so much of the proceeds of its oil (over US$300k per capita), there's not a lot of pressure to adapt.<p>Norway will not be a center of innovation anytime soon, except in oil-related fields. Eventually, as oil gets replaced as a source of energy, they may feel more pressure to change. But for now, they suffer from a more sophisticated version of the resource curse.<p>Sweden is an interesting counterexample, which has a lower GDP per capita but a much more diversified economy. Sweden abolished a wealth tax they used to have almost 20 years ago.
This is a bad solution to taxation. It brakes the long-established tax practice of "realization principle".<p>Suppose the same principle was applied to a home owner. At the end of each year your property is evaluated and you're taxed on the difference between last and this years price. You own an asset and this asset is valued by the rating agency as more expensive than before. Now you have a liability that you need to pay and if you don't you'll be in big trouble, because you owe the money to the government.<p>So independently of your own actions & impossible to predict you will need to plan for this expense. How many homeowners and rentiers would like that?<p>The "realization principle" in tax law specifies that income is not subject to tax until it is "realized" through a taxable event, such as the sale or exchange of an asset. In the US this was established in early 20th-century U.S. Supreme Court cases such as Eisner v. Macomber (1920). In this case it was established that mere appreciation in value does not constitute taxable income until a sale or exchange occurs.<p>Europe is not very business friendly. This regulation will make creating businesses even harder. When governments need more revenue they need to create more opportunities to create that revenue, not squeeze the current business tighter and tighter. Startups are risky, adding additional risk would just kill more of them sooner.<p>BTW, it's easy to fix "loan against my equity" evasion by classifying the "money has been loaned" as a "realization" event.
I've started several companies in Norway. When I moved to the UK, the wealth tax was not even remotely a consideration, even though my shares were at the time valued in the millions - we moved because getting the size investment we needed to grow in Norway was too hard at that time.<p>Yes, it can be a challenge for fast-growing startups where the secondary market is not very liquid, and is something people need to be aware of. It's not generally a major problem, in that if you can't find ways of structuring deals in ways that allow for ensuring the founders can afford the tax bill, the company just isn't doing very well.
> This creates a perverse scenario where business owners must extract dividends or sell shares every year just to cover their tax bill. With dividend and capital gains taxes at around 38%, you need to withdraw approximately 1.6 million NOK to pay a 1 million NOK wealth tax bill.<p>Why wouldn't you just take a loan against the assets? A few percent of interest is a lot cheaper than 38%. In Canada you used to have to pay taxes on unrealized option gains, standard procedure was to take a loan to pay taxes. If the options gains disappeared, you'd use your next years tax refund to pay back the loan.
The funniest part about Norway rising the wealth tax rate so extremly is that bow revenue from that tax drastically fell. I guess they need to read up on the Laffer curve. The second funniest thing is that a huge chunk of rich norwegiens left for Switzerland a country, one of very few, that also has wealth taxation on all assets. The difference is only that its an order of magnitude lower.
The references to Atlas Shrugged and the trains not running on time, and the bit about healthcare costs do not bolster any argument against a tax on unrealized gains, so this comes off more as ideologically motivated bit, rather than than an argument against the specific tax. Taxing unrealized gains is really problematic, as anyone in the startup scene who's been granted stock options in a rising startup in Silicon Valley can attest to. Paying a million dollars to the IRS because of AMT means you got a big payday, except for the fact that if you don't actually have a million dollars, you then have a problem. Most people don't have a million dollars to begin with so you can't pay that bill and you take a loan from sketchy loan shark, whole repeating the mantra, 100% of $0 is $0. 70% of a big number is still a big number.<p>Looking at the US, rasing taxes on the rich and doing more against unrealized gains won't happen for at least four years, so we don't have to worry about that, at least.
Please note that the main criticism in the Norwegian debate is currently how this kind of taxation discriminates Norwegian ownership and gives a disadvantage in terms of competition, in comparison to foreign business owners
Here's a thought: as long as some countries somewhere have enough freedom to innovate, and entrepreneurs can leave their countries and get to the freer ones, countries like Norway can piggyback off all the innovation from others (or outsource it). I think it would only be a problem if for some reason there was technology that couldn't be copied.
Not surprising that an Atlas Shrugged reading entrepreneur dislikes taxation.<p>But government services cost money, and by other accounts [0] Norway are doing pretty well:<p><i>Norway performs well in many dimensions of well-being relative to other countries in the Better Life Index. Norway outperforms the average in jobs, work-life balance, education, health, environmental quality, social connections, civic engagement, safety and life satisfaction.</i><p>[0] <a href="https://www.oecdbetterlifeindex.org/countries/norway/" rel="nofollow">https://www.oecdbetterlifeindex.org/countries/norway/</a>
Holy shit, this blog tries to sell me the the right to <i>highlight</i> text!<p>This gotta be the most extreme instance of NFT brain I've ever encountered...
Is this satirical?
If it is, well done you could've fooled me with the whole Norwegian perspective.
If it isn't, damn how much of a caricature can you be.
If you ask a socialist to describe their ideal world, it is one in which everyone is equally poor.<p>They see "taxing the rich" first and foremost as punishing an ideological enemy, with little thought given to actually maximizing the tax revenue they can collect from them over time.
easy, impose an exit tax. capital doesn't need to be free when it's trying to evade justice.<p>you pay tax on unrealised gains the same way the rest of us do when facing an unexpected bill that we can't afford - you sell your stuff.