Doesn't really matter as America can go after funds regardless of where you move to. Just pay your fucking taxes, you got the benefits of the system, pay back into it.
The article isn't about income taxes. Income taxes are taxes on income that you earn in any calendar year.
The article is about wealth taxes. In addition to income taxes, Norway has a wealth tax, which taxes net wealth above $170k (NOK 1.7M) at 1% [0]. So, if your net wealth is $200k, you are taxed 1% on $30k every year.
Separately, it is a myth that the wealthy don't pay taxes. This isn't Reddit. Wealthy pay taxes but they also maximize the value of any benefits already included in the tax code. AMT is an attempt to fix this but has its own problems.
Ironically, America does have a wealth tax if you want to relinquish your citizenship. I don't think Norway does, and many rich Scandinavians change citizenship to Switzerland negotiating their taxes straight with the canton they move to (like the founder of Ikea did). It is easier for a Norwegian to optimize their taxes than an American (since America also taxes worldwide income, and you can't just change your citizenship without paying a penalty).
Presumably they don’t need to change their citizenship, they just become tax resident in another country. Most countries only tax residents. Norway is part of the EEA so its citizens have the right to live in Switzerland.
Ya, so it is even easier for Europeans. And it wouldn't matter if they were a part of the EEA or not, they would almost definitely negotiate their taxes with the canton of their residency as part of their move (you can easily buy residency in Switzerland). The EEA is more for normal people from the EU who want to work in Switzerland and pay normal taxes (which are still low for Europe).
The US exit tax is not a wealth tax. It is calling due any deferred capital gains taxes. If you have a billion dollars cash, you can leave and pay zero tax. If you have a billion dollars in assets that have not appreciated since you bought them, you pay zero tax.
It is only comes into play if you have investment assets that have gone up since purchase, and you have paid no taxes on them because they are taxed at the time of sale.
> you got the benefits of the system, pay back into it
The "system" isn't the government, though it's easy to muddle that line, considering some developed countries have government spending that's over half of the GDP (with Norway sitting at around a fifth as of 2021); and the existence of a government that facilitates the "system", which is in reality the private activities of the people, does not make it that without that particular government the system will not exist at all.
Imagine a parent who tells a fully-grown child well into his adulthood that they have an ever-increasing claim on what the child produces by virtue of having given birth to and raised him. Does that not sound abusive? That's not the kind of relationship I want with my government. The government, or at least the American one, is meant to serve the people, not rule over them and allow the people to keep whatever scraps the government allows them to keep.
Every time you perform a service for somebody or make a widget for somebody -- basically any economic activity -- you are paying back into the system by fulfilling a demand that someone else has. And not just remunerative efforts: every time you pick up a cigarette butt off the street that you didn't smoke, or every time you watch someone else's kid for a night, or you volunteer at a local soup kitchen. Those are all ways that people pay back into the system.
Let's not make the mistake of thinking taxation is the only way, or even the most important and effective way. Many roles that are currently performed by government funded via taxation have only been that way very recently in human history, and I'm in no way convinced that this is either optimum or necessary.
>Imagine a parent who tells a fully-grown child well into his adulthood that they have an ever-increasing claim on what the child produces by virtue of having given birth to and raised him. Does that not sound abusive? That's not the kind of relationship I want with my government. The government, or at least the American one, is meant to serve the people, not rule over them and allow the people to keep whatever scraps the government allows them to keep.
Thank you for putting that into words, I’ve struggled to succinctly frame the unease that this way of thinking makes me feel.
> wealthy Norwegians took with them a total fortune of $54 billion when they left. This means that the wealth tax, which was projected to increase revenue by nearly $150 million annually, will result in about 40 percent less revenue than it currently generates
So the problem is revenue from wealth tax will only be $90M instead of $150M? As opposed to $0M without the wealth tax? How does having these billionaires physically located in Norway benefit the average citizen? Capital investments should happen wherever they're physically located because economics, big corpos have their HQs wherever they want anyway. Is trickle down economics the entire argument here?
Capital flight is a form of class warfare. Controls against it are the majority, workers who don’t own capital, enforcing a social contract against those who do.
Of course, that will only happen in states where workers are in power. In most countries that isn’t the case and, unsurprisingly, there are weak capital flight controls.
I did not make that assumption, with the idea that in countries with free (or freer, at any rate) market-based economies with little to no capital controls, the rising tide lifts all boats, including those of the proletariat without capital, to a standard of living higher than countries with unfree economies and significant capital controls.
In fact, in two of the countries that presently have significant capital controls (China and Russia), even your human capital is controlled with internal passports that limit where in your own country you can move to.
Of course, I likewise don't dispute that I don't know what your preferences are. My original statement ("you likely wouldn't want to") was intended to be a general statement, not for you in particular as an individual.
According to your first source, "cutting the top tax rate does not lead to economic growth" but it does not lead to economic stagnation or shrinkage either; "cutting the top tax rate does not lead to income growth" but does not lead to income decrease either; "cutting the top tax rate does not lead to wage growth" but does not lead to wage decrease either; "cutting the top tax rate does not lead to job creation" but does not lead to job destruction either. That is to say, cutting the top tax rate has no correlation with any of those four items.
So if taking more or less taxes from the rich results in no meaningful difference in ordinary American lives, shouldn't the government then default to taking less? The other way would be just wasteful. And if your argument is that no, in fact the additional tax revenue from the rich is helpful because it funds various redistributive social programs, then my counterargument is that what those programs seem to be most effective at is incentivizing creating an unemployable underclass at the taxpayer's expense[0] while enriching politically connected players.
[0]: See Thomas Sowell's extensive body of research on the general welfare of black Americans before and after the Great Society programs of the 60s.
So clearly you don't see the usefulness of government being able to spend money on programs that do make a difference, even going as far as to label it wasteful. I'd argue that letting people keep money that makes no significant difference in their life, other than sitting as a number on a bank account, is wasteful. If people can use money to better society, so can government, difference being government can spend money selflessly.
Government spending, in certain cases, can and is wasteful. To claim that all is, is clearly false.
I'd be wary of quoting Thomas Sowell, he's basically the guy to victim blame minorities into saying that being poor is their fault.
"Selflessly" insofar as everyone involved has no incentives, internal or external, that direct their behavior one way or another; which is to say, not selflessly at all.
The government isn't a machine that takes action for the good of the citizens with no feeling. It's a messy organization composed of people who are all looking out for their salaries, what makes their boss look good or their rivals look bad, whether they win the next election, and maybe sometimes the stated mission of the organization or the good of the citizens. And moreover, it does all that with the might of the law, the monopoly on violence.
If it's a similar amount of money for a similar level of outcome, I'd much rather the people use the money to better society and not government, for those reasons.
> Thomas Sowell, he's basically the guy to victim blame minorities into saying that being poor is their fault
What a demeaning way to describe a human being with an incredible personal story and his life's work. And it's wrong, too: if you simplify into a sentence or two what he says about minorities (and his body of work extends far beyond that), it's that well-meaning government policies often incentivize minorities into entering cycles of poverty, and that minorities should depend on themselves first and foremost and not the government to improve their lot.
I’m saying that if one class is already engaging in warfare, it’s not unreasonable for the opposed class to attempt to respond. Of course that is only possible with state power, which in most countries is now in the hands of the owners of capitals. That’s their main tool for engaging in class warfare in the first place.
Individuals associating voluntarily is a liberal fiction. Such freedom only exists if you are already wealthy. Otherwise you have to work for an owner of capital or starve.
Currently, the owners of capital further increase their capital by employing workers. The labour of those workers creates value, a part of which the owner of capital keeps despite having not laboured for it. Violence is used to keep workers from the entirety of the value their labour creates.
Is that voluntary association? Seems to me like the owners of capital exploit the labour of workers, because they have the ability to compel it.
What violence is used to keep workers laboring in their factories? Your position seems to hang on that point. I don't think refusing to intervene and letting someone starve to death is a violent act. To claim otherwise redefines violence as any actor action which does not meet your personal wants.
If workers were to seize the full value of their labour, or seize the means of production, capital armies (like the police) would attack them. Even when workers merely strike they commonly get attacked by police.
The laws (and even the liberal ideology you adhere to) exist to favour the ruling class. Why would the ruling class do anything else? When the ruling class are the owners of capital, the laws and culture disfavour workers.
Ultimately it’s not worth discussing this to death yet again, it has been done countless times in the last couple hundred years.
Nobody is using violence to stop workers from buying, renting, or building means of production. Buy your own example, violence only comes into play when they try to steal.
The only real violence you mentioned is if police attack striking workers, which is exceedingly rare in most developed countries with the rule of law. What percentage of striking workers do you think are physically harmed by police in the us? If you think that is a likely or common outcome, we are probably living in different realities. You say that laws just favor the workers, but I wouldn't want to be a worker in a society without property rights. There is no point in working if any value you create can be stolen with impunity.
Try to imagine yourself as a worker with little to no asset ownership. One day you decide voluntarily to cut yourself off from your job. You no longer are able to pay rent/mortgage, and you are on the streets. You're hungry but have no money. You think of the best place to get some money for food.. Maybe that rich neighborhood would be generous to you. You start panhandling, but 5 minutes into it, some local rent-a-cop starts harassing you to get off the sidewalk that's "reserved for the business in front of it". You refuse, stating that the sidewalk is public property. A few minutes later, the police come over and force you to relocate. Where to? You pick another spot, and the cycle repeats until you pick a spot far enough away from everyone. Still no food though.
Now you want to sleep.. need I continue?
In short, the violence is not in "letting someone starve". Most people aren't out there trying to starve themselves. The violence is in preventing someone from saving themselves. Being homeless/penniless is an eyesore for those that aren't. The actions taken to fix the eyesore are the source of violence. What happens to a panhandler if they refuse to comply with police's arbitrarily justified order to "relocate"?
Norway is part of the EEA which means that there is free movement of people and capital. Therefore it is impossible for them to prevent people leaving to other EEA countries. Changing the EEAs 4 freedoms is unlikely.
The article quotes the billionaire saying "My capital will continue to work in Norway". What evidence these people are taking their money out of Norwegian bank and depositing it elsewhere? Or is their wealth already offshore anyway and they are just shifting their personal chump change to Switzerland? I'm somewhat suspicious of libertarian neo-cons saying "Don't tax me Bro', it'll just hurt you."
But of course an institute called the "American Institute for Economic Research" is going to say that; from the about page, they believe in "the value of personal freedom, free enterprise, property rights, limited government, and sound money."
An important skill is reading between the lines, and recognizing libertarian dog whistles. Freedom to them = freedom from government regulating business. Freedom to me = freedom from worrying about businesses poisoning me and my family.
Equating "Wealth taxes are counterproductive" to "Let's posison people" is a quite a leap. It's less reading between the lines and more deranged hallucination.
Separately, every institute or person that has published anything has an agenda; so the fact that this particular institute has a mission that you perceive to align with their words doesn't mean that their words are wrong. It is by definition an ad hominem fallacy.
I'd love to be as tall and athletic as an NBA player. Perhaps a height tax is in order to more fairly redistribute people along the vertical dimension.
I'll own the snark (and point out that height is only non-transferable if you aren't trying hard enough, a la Harrison Bergeron), but my point stands. Life is full of situations where someone has it better off than someone else in whatever dimension you care to look at. I believe in equality of opportunity but not equality of outcome, which is what GP seemed to suggest in coveting the personal freedoms of a billionaire.
Substantially equal in terms of life, liberty, and the pursuit of happiness? In equality before the law? In being judged not for the color of their skin, but the content of their character? Yes, and we should strive to make that even more so. Perfectly equal in all respects, including access to resources? Obviously not. If you define equality of opportunity as how many horseback riding lessons and unpaid internships a child is put through, then no, there is no such equality found in America or anywhere else in the world. Even the most egalitarian nations of the world in Scandinavia (the subject of this thread to begin with) have rich people and poor people.
A child of a poor single mother, Barack Obama, made his way to the highest office of the land (not to mention significant personal wealth), whereas a child of a billionaire, John du Pont, died in prison as a convicted murderer. Both had equal opportunities to make something of themselves in a cultural, legal, and economic framework that values the individual.
In this land of equality of opportunity, 93% of people born to parents in the bottom quintile of incomes ended up earning more than their parents, with 57% ending up in a higher quintile; and a full 60% of people born to parents in the top quintile of incomes ended up in a lower quintile[0].
Meanwhile, in Norway, famed for its egalitarian attitudes and highly redistributive policies, a higher percentage were able to climb out of the bottom quintile, but a similar percentage held on to their parents' top-quintile ranking[1]. The country has more billionaires per capita than the US, and still has a legally separate and privileged group of people, the monarchy, who by definition are unequal from the rest of the populace; and it's only a few generations removed from having legal privileges for the aristocracy.
I pointed out the authorship because this article is not actually the piece of news reporting it appears to be; it does not have anything useful to tell us about whether "Norway's wealth tax is backfiring", because it comes from an author whose ideological perspective presumes that it must. Perhaps the policy is a failure, perhaps it is not; we will need to look elsewhere to find out.
> They believe in "the value of personal freedom, free enterprise, property rights, limited government, and sound money."
And there's nothing wrong with that. It's pretty good that they stated their beliefs upfront, so at least we can see where the bias (if any) comes from.
What exactly wealth they create and for whom? They're guilty of hyper-centralizing all services, assets, and resources. Your yacht will not fit in Lugano Lake, Mr. Viking. Try Marbella or Malaga, the places for Scandinavian success people.
Only anti intellectual leftists would deny that increasing taxes increases the odds of capital flight, but it's not the only factor to consider. There are various benefits to living in a country, and a tax increase will not necessarily cause capital flight, or more importantly, decreased tax revenue. Seems like Norway overplayed their cards this time, but that doesn't necessarily mean a wealth tax is bad. Just important to keep in mind that economics is real.
Also noticed that a lot of people are suggesting laws against capital flight, but this is also a very risky idea. Having capital that can't be moved inheritly decreases its value. You might be able to capture short term value, but you risk future investment, which could lead to a death spiral.
> Dellanna, a management advisor and author, points out that Norway collected about $1.46 billion on its wealth tax in 2019. But the exodus of the wealthy will result in an estimated $594 million in lost revenue.
This is the tricky part of "just raise it a few percent" for these wealthy entities. It seems a small increase won't make a large difference". But if they go from 2% to 2.5%, for instance, but there is a country, somewhere which, has a 2.1% tax, they'd all start feeling. So, in some ideal situation, when we consider only one particular country in a vacuum, it should work. But, it's a lot tricker when there are other countries to consider. Even more interesting, other countries could specifically target these wealthy entities by lowering their wealth tax to 2.4%. That's not unheard of with US states and companies: if one state raise their taxes, some state might start courting companies headquartered in that first state and promising tax cuts if they move their headquarters.
59 comments
[ 3.9 ms ] story [ 124 ms ] threadThe article is about wealth taxes. In addition to income taxes, Norway has a wealth tax, which taxes net wealth above $170k (NOK 1.7M) at 1% [0]. So, if your net wealth is $200k, you are taxed 1% on $30k every year.
Separately, it is a myth that the wealthy don't pay taxes. This isn't Reddit. Wealthy pay taxes but they also maximize the value of any benefits already included in the tax code. AMT is an attempt to fix this but has its own problems.
[0] https://www.lifeinnorway.net/wealth-tax/
It is only comes into play if you have investment assets that have gone up since purchase, and you have paid no taxes on them because they are taxed at the time of sale.
The "system" isn't the government, though it's easy to muddle that line, considering some developed countries have government spending that's over half of the GDP (with Norway sitting at around a fifth as of 2021); and the existence of a government that facilitates the "system", which is in reality the private activities of the people, does not make it that without that particular government the system will not exist at all.
Imagine a parent who tells a fully-grown child well into his adulthood that they have an ever-increasing claim on what the child produces by virtue of having given birth to and raised him. Does that not sound abusive? That's not the kind of relationship I want with my government. The government, or at least the American one, is meant to serve the people, not rule over them and allow the people to keep whatever scraps the government allows them to keep.
Every time you perform a service for somebody or make a widget for somebody -- basically any economic activity -- you are paying back into the system by fulfilling a demand that someone else has. And not just remunerative efforts: every time you pick up a cigarette butt off the street that you didn't smoke, or every time you watch someone else's kid for a night, or you volunteer at a local soup kitchen. Those are all ways that people pay back into the system.
Let's not make the mistake of thinking taxation is the only way, or even the most important and effective way. Many roles that are currently performed by government funded via taxation have only been that way very recently in human history, and I'm in no way convinced that this is either optimum or necessary.
Thank you for putting that into words, I’ve struggled to succinctly frame the unease that this way of thinking makes me feel.
These are reasonable questions.
So the problem is revenue from wealth tax will only be $90M instead of $150M? As opposed to $0M without the wealth tax? How does having these billionaires physically located in Norway benefit the average citizen? Capital investments should happen wherever they're physically located because economics, big corpos have their HQs wherever they want anyway. Is trickle down economics the entire argument here?
Capital flight is a form of class warfare. Controls against it are the majority, workers who don’t own capital, enforcing a social contract against those who do.
Of course, that will only happen in states where workers are in power. In most countries that isn’t the case and, unsurprisingly, there are weak capital flight controls.
Maybe you wouldn’t want to move to a country where the working class is in charge, as opposed to your own class. I don’t dispute that.
In fact, in two of the countries that presently have significant capital controls (China and Russia), even your human capital is controlled with internal passports that limit where in your own country you can move to.
Of course, I likewise don't dispute that I don't know what your preferences are. My original statement ("you likely wouldn't want to") was intended to be a general statement, not for you in particular as an individual.
So if taking more or less taxes from the rich results in no meaningful difference in ordinary American lives, shouldn't the government then default to taking less? The other way would be just wasteful. And if your argument is that no, in fact the additional tax revenue from the rich is helpful because it funds various redistributive social programs, then my counterargument is that what those programs seem to be most effective at is incentivizing creating an unemployable underclass at the taxpayer's expense[0] while enriching politically connected players.
[0]: See Thomas Sowell's extensive body of research on the general welfare of black Americans before and after the Great Society programs of the 60s.
Government spending, in certain cases, can and is wasteful. To claim that all is, is clearly false.
I'd be wary of quoting Thomas Sowell, he's basically the guy to victim blame minorities into saying that being poor is their fault.
"Selflessly" insofar as everyone involved has no incentives, internal or external, that direct their behavior one way or another; which is to say, not selflessly at all.
The government isn't a machine that takes action for the good of the citizens with no feeling. It's a messy organization composed of people who are all looking out for their salaries, what makes their boss look good or their rivals look bad, whether they win the next election, and maybe sometimes the stated mission of the organization or the good of the citizens. And moreover, it does all that with the might of the law, the monopoly on violence.
If it's a similar amount of money for a similar level of outcome, I'd much rather the people use the money to better society and not government, for those reasons.
> Thomas Sowell, he's basically the guy to victim blame minorities into saying that being poor is their fault
What a demeaning way to describe a human being with an incredible personal story and his life's work. And it's wrong, too: if you simplify into a sentence or two what he says about minorities (and his body of work extends far beyond that), it's that well-meaning government policies often incentivize minorities into entering cycles of poverty, and that minorities should depend on themselves first and foremost and not the government to improve their lot.
Voluntary association and participation of individuals should be a baseline understanding.
Individuals associating voluntarily is a liberal fiction. Such freedom only exists if you are already wealthy. Otherwise you have to work for an owner of capital or starve.
I don't think being hungry negates voluntary association.
Being hungry should not compel another to association any more than being horny should.
Is that voluntary association? Seems to me like the owners of capital exploit the labour of workers, because they have the ability to compel it.
The laws (and even the liberal ideology you adhere to) exist to favour the ruling class. Why would the ruling class do anything else? When the ruling class are the owners of capital, the laws and culture disfavour workers.
Ultimately it’s not worth discussing this to death yet again, it has been done countless times in the last couple hundred years.
The only real violence you mentioned is if police attack striking workers, which is exceedingly rare in most developed countries with the rule of law. What percentage of striking workers do you think are physically harmed by police in the us? If you think that is a likely or common outcome, we are probably living in different realities. You say that laws just favor the workers, but I wouldn't want to be a worker in a society without property rights. There is no point in working if any value you create can be stolen with impunity.
Now you want to sleep.. need I continue?
In short, the violence is not in "letting someone starve". Most people aren't out there trying to starve themselves. The violence is in preventing someone from saving themselves. Being homeless/penniless is an eyesore for those that aren't. The actions taken to fix the eyesore are the source of violence. What happens to a panhandler if they refuse to comply with police's arbitrarily justified order to "relocate"?
Separately, every institute or person that has published anything has an agenda; so the fact that this particular institute has a mission that you perceive to align with their words doesn't mean that their words are wrong. It is by definition an ad hominem fallacy.
A child of a poor single mother, Barack Obama, made his way to the highest office of the land (not to mention significant personal wealth), whereas a child of a billionaire, John du Pont, died in prison as a convicted murderer. Both had equal opportunities to make something of themselves in a cultural, legal, and economic framework that values the individual.
In this land of equality of opportunity, 93% of people born to parents in the bottom quintile of incomes ended up earning more than their parents, with 57% ending up in a higher quintile; and a full 60% of people born to parents in the top quintile of incomes ended up in a lower quintile[0].
Meanwhile, in Norway, famed for its egalitarian attitudes and highly redistributive policies, a higher percentage were able to climb out of the bottom quintile, but a similar percentage held on to their parents' top-quintile ranking[1]. The country has more billionaires per capita than the US, and still has a legally separate and privileged group of people, the monarchy, who by definition are unequal from the rest of the populace; and it's only a few generations removed from having legal privileges for the aristocracy.
[0]: https://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_a...
[1]: https://www.brookings.edu/wp-content/uploads/2016/07/02_econ...
If this is to be achieved it is going to require a lot of money.
We are a long way from having a child growing up in social housing sharing the same opportunities as a billionaires child.
And there's nothing wrong with that. It's pretty good that they stated their beliefs upfront, so at least we can see where the bias (if any) comes from.
What exactly wealth they create and for whom? They're guilty of hyper-centralizing all services, assets, and resources. Your yacht will not fit in Lugano Lake, Mr. Viking. Try Marbella or Malaga, the places for Scandinavian success people.
Kind of predictable.
Also noticed that a lot of people are suggesting laws against capital flight, but this is also a very risky idea. Having capital that can't be moved inheritly decreases its value. You might be able to capture short term value, but you risk future investment, which could lead to a death spiral.
This is the tricky part of "just raise it a few percent" for these wealthy entities. It seems a small increase won't make a large difference". But if they go from 2% to 2.5%, for instance, but there is a country, somewhere which, has a 2.1% tax, they'd all start feeling. So, in some ideal situation, when we consider only one particular country in a vacuum, it should work. But, it's a lot tricker when there are other countries to consider. Even more interesting, other countries could specifically target these wealthy entities by lowering their wealth tax to 2.4%. That's not unheard of with US states and companies: if one state raise their taxes, some state might start courting companies headquartered in that first state and promising tax cuts if they move their headquarters.