They left because they didn't want to pay taxes. No monkeying about, they want to be rich and tax free.
How do you pay taxes for something that doesn't exist with money you do not have?
I think the rationale is that if you have unrealized gains, there is a high likelihood that you are well off, and can therefore be pressured into reifying your economic potential into a resource that the government can appropriate (ie money)
It’s not a straightforward tax like income tax, it’s more of a class based tax that has some aspects in common with income / CG taxes.
It makes sense when you consider that the capital owning class is and was always the most well off, even more so than aristocrats, since the Industrial Revolution anyway.
Does Norway perform well in various well-being metrics essentially because Norway is extremely oil rich? (I don't pretend to know the answer, and ask because I don't see how to figure that out)
It's a good question. If that were the case, I would have expected to also see other oil rich countries at the top of those rankings.
How do you pay taxes for something that doesn't exist with money you do not have?
I think the rationale is that if you have unrealized gains, there is a high likelihood that you are well off, and can therefore be pressured into reifying your economic potential into a resource that the government can appropriate (ie money) It’s not a straightforward tax like income tax, it’s more of a class based tax that has some aspects in common with income / CG taxes. It makes sense when you consider that the c…
What a nice way to preserve feudal classes. It'd be just terrible if someone not rich attempted startups.
If their business grows at a rate higher than interest, there's no reason why the bank wouldn't be happy to add the interest to the loan. If their business is growing at a rate lower than interest, it's a poor investment and they ought to sell it off and put their money somewhere else. Such as lending it out.
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. 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 (…
Is this tax because the state needs the money or is it social engineering?
All tax regimes, including zero tax, are social engineering.
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.
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 is a bad solution to taxation. It brakes the long-established tax practice of "realization principle". 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…
> Suppose the same principle was applied to a home owner. Norway does apply the wealth tax to home owners. Though there is a discount factor for different types of assets, and the value of your primary home is discounted by 75%. There's also a minimum threshold.
There is a difference between a well-established market with "value" that is established and something much more speculative like other type of assets.
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.
This is a bad solution to taxation. It brakes the long-established tax practice of "realization principle". 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…
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 have been multiple political initiatives aimed at restarting the collection of the tax, none successful so far, despite a large majority of Germans (70+%) being in favor of collecting the wealth tax.
> 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.
In some states there are, which is also a bad & unjust practice. The difference is that the rates are between 0.49% and 2.5% and reassessment period differs between the states/localities (these are local taxes). This is way less that the proposed Norway taxes and "value" can be established much more justly than a "startup shares".
So, it's OK if it has rules and the Norway laws don't have any rules... is that what you're saying here/