BERGEN (Nettavisen): For or against the “wealth tax” has become a recurring theme in an election campaign where the left has chosen “the fight against the rich” as one winning strategy.
The wealth tax of 0.85 per cent is currently charged to those who have a net wealth of more than 1.5 million – where 0.7 per cent goes to the municipality and 0.15 per cent to the state.
– The tax that bites the most for the richest
– It is easy to seize the wealth tax because it is obvious that it bites the most for the richest, says professor of finance at NHH, Thore Johnsen, to Nettavisen.
– Then it becomes a symbol that you do something. That is – the wealth tax has a certain equalization effect, there is no doubt about that – but the question is whether the value of the equalization outweighs the loss of missing investments.
– I doubt it, he adds.
Also read: Stordalen about the wealth tax: – So damn little!
Johnsen further says that he fears that the emphasis on morality, equalization and ethics, means that the wealth tax will increase with a possible new government.
– But I hope they find that growth is important and that growth presupposes investments, which in turn presupposes cheap capital. Therefore, it is unfortunate if one increases capital taxes.
He points to inheritance and property taxes as better suited to obtain the necessary proceeds.
«Norway’s Monaco»: – Not very sensible
– Why do so many misunderstandings / myths exist about the wealth tax, Thore Johnsen?
– Much is due to real disagreement, not least among researchers themselves, but also by politicians of course, says Johnsen.
Also read: NHH professor with clear tax advice for Støre
– We see, as in «Norway’s Monaco», Bø in Vesterålen, that the wealth tax has been sharply reduced, what thoughts do you have about that?
– I do not think it makes much sense for municipalities to start competing on taxes, says Johnsen.
– Because?
– First, it is unclear whether the politicians take into account that they lose tax revenue. It is, after all, a not insignificant tax revenue we are talking about, revenue.
– The second is that it is not necessarily the best municipalities to live in for a capitalist who wants to choose the lowest tax, he adds.
– KristianAdolfsen is one of them who has chosen to move to Bø.
– I assume that this is a transient phenomenon, Johnsen chuckles – and continues:
– But I also think the definition of “working capital” is whimsical: Everything is about reducing – possibly avoiding increasing the wealth tax. There, such measures could be helpful during a transitional period.
Not just Adolfsen, but also the ski legend Bjørn Dæhlie has registered as a “tax refugee”.
Also read: Billionaire Kristian Adolfsen wants to move home – after 38 years in Oslo
– Norway’s response to Monaco
Bø mayor Sture Pedersen received as much as 57.5 percent of the votes in the previous election, and can thus do almost as he pleases.
– Feel free to call it Norway’s answer to Monaco, as long as it leads to private initiative here. We can not survive on fresh air and beautiful nature alone, he said cheerfully to Nettavisen when we visited Bø last autumn.
Pedersen has made the radical tax move to reduce the municipal wealth tax to 0.35 percent – with effect from 1 January 2021.
Internal disagreement
Also at NHH, the wealth tax has caused the temperature to rise, after the Tax Center concluded that the wealth tax does not affect investments and bidding rounds between players with different taxation.
– What is the central disagreement is what effect the wealth tax has on investments and operations in companies, especially in non-listed companies, Johnsen says to Nettavisen.
Read Gunnar Stavrum’s blog about wealth tax: Free imagination and political dreams that increased wealth tax creates more jobs
There are three reasons in particular to be careful about drawing such conclusions for non-listed companies, Johnsen points out this article in the K7 Bulletin:
· Firstly because it is so difficult to identify the effects of wealth tax.
· Secondly, because the wealth tax probably gives higher return requirements for investments in such companies.
· And thirdly, because we often cannot separate ownership from management and expertise.
Watch a video interview with Kristian Adolfsen here:
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