111–120 of 150 posts
Not surprising that an Atlas Shrugged reading entrepreneur dislikes taxation. But government services cost money, and by other accounts [0] Norway are doing pretty well: 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, saf…
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> 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... Isn't this exactly how property taxes usually work? (In the absence of caps like California Prop 13, that is.) The realization principle is a hallmark of income tax law, but many taxes are not income taxes.
Yes and property taxes are terrible. Tax. Vacant. Land.
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> If people there are OK with these taxes and don't vote them out it's their choice. My point is that it's a bad and wrong solution with bad consequences. Norway has had this tax for decades, and done just fine. > There is data about this: https://www.gemconsortium.org/data I don't see any data that gives any useful indication about this there. > And also check how many big companies have been started in the last 10…
Taxes are levied on economic activity. In capitalist systems the main economic activity is created by companies by direct tax on profits or direct tax on labor they buy (wages for the workers). Count the number of companies created and grown in the last 20 years and see the trend. If it's going down your tax revenues will decrease. So indeed number of companies created is a very good proxy for future tax revenues.
> Count the number of companies created and grown in the last 20 years and see the trend. If it's going down your tax revenues will decrease. So indeed number of companies created is a very good proxy for future tax revenues.
Even if it was that simple, that does not provide even a correlation - much less causation - with wealth taxes, which Norway has had for decades. E.g. we'd expect to see changes corresponding with changes in the wealth tax rates.
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Do they give a tax refund if the assets then lose (notional) value the next year?
Yes, well credit and other mechanisms keep the ledger balanced. Do you think you're the first person who thought of that criticism or that none of the economics professionals though to address it? What arrogance.
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The other thing is what happens when the notional value goes down a year later? Do they get a tax refund?
The wealth tax is yearly based on your wealth that year.
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Wealth tax is a long-established practice in Germanic Europe. The list of countries that collected it in 1965 is kind of interesting: Austria, Denmark, Finland, Germany, Netherlands, Norway, Sweden, and Switzerland. Most of them eventually abolished it. It made more sense in the past, when speculative valuations were less common and capital flight was less of an issue. It was collected from wealthy people, who could…
There is still a wealth tax in Germany which is, in fact, enshrined in its constitution. However, the tax has not been collected since 1997 due to legal issues regarding its calculation. Back then, the constitutional court decided that wealth in the form of properties would have to be taxed more. However, instead of adjusting the calculation, politics instead decided to suspend collecting the tax. Ever since, there h…
Gee, I wonder who could possibly be financing voices to oppose a wealth tax at the government level. Maybe we should tax the wealthy to stop them from doing stuff like this.
> 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. 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…
> A few percent of interest is a lot cheaper than 38% Not sure why that is comparable.
The other alternative is to borrow 1m, and pay interest on a 1m loan.
Unless you hold the loan long enough for the aggregate interest accrued until you're able to sell some shares exceeds the dividend tax, it's a net saving.
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Everyone starts a company with the idea it may never apply to them, so why worry about it before it becomes a problem. Of course, with the leaving tax, they may just move abroad before doing anything.
It was not that it didn't apply to me. I've had shareholdings in Norwegian companies worth well over the deductible several times. The point is that it isn't a problem in practice as long as you're aware of it and plan accordingly. Yes, if you start a company in Norway without a liquid market for your shares, and without understanding the tax implications, you might end up having a bad time of it. If you spend an hou…
Maybe? Or maybe it's just a PITA that most people don't want to deal with? It's not nice when you company is doing well, and your reward is having to pay a bunch of extra taxes and deal with financing all that somehow.
At least, I find paying income/value-added tax a lot more palatable, since it's always over money you just received, not money you have to conjure into existence somehow.
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 V…
I was 19 when I set up my first company in Norway, and had no prior exposure to business - I still knew the wealth tax was a thing to be aware of.
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Anyone that gets taxed more than they have money to pay is inclined to dislike that taxation. I completely agree with the wish to not cannibalize hour company before it’s even properly profitable. They’re ‘unrealized gains’ for a reason. That said, I also feel there is a way to do this tax properly.
> They’re ‘unrealized gains’ for a reason The bridge that governments are attempting to make is between "you can't tax me on these, they're unrealized gains!" and "I'm going to fund my billionaire lifestyle by borrowing against these unrealized gains." Maybe tax people on those unrealized gains if they use them as collateral?