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Taxing unrealized gains has caused an entrepreneurial exodus in Norway

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Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#81

Post by Aeolun »

vidarh wrote: post #72
cbmuser wrote: post #28

Earlier quoted context omitted.

I have lived in Norway for a year and it’s definitely not as bright as you’re painting it. Rent prices are extremely high and apartments are quite small compared to other European cities. Alcohol is so expensive, that Norwegians go on alcohol shopping tours to Sweden. Trains in Oslo don’t run 24 hours, so you have to take long detours with busses at night or pay obnoxiously high rates when taking a cab. No, Norway is…

Alcohol is so expensive as a choice with broad political support in Norway. Yes, Norwegians like to whine about it, and go to Sweden or Denmark to avoid it, yet Norwegians also keep voting for the parties (almost all) that agree with keeping alcohol taxes high. Rent is high in large parts because average incomes are high. This is one of the effects of a relatively flat income structure. As someone earning far above a…

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.

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#82

Post by SiempreViernes »

HarryHirsch wrote: post #45
cbmuser wrote: post #28

Earlier quoted context omitted.

I have lived in Norway for a year and it’s definitely not as bright as you’re painting it. Rent prices are extremely high and apartments are quite small compared to other European cities. Alcohol is so expensive, that Norwegians go on alcohol shopping tours to Sweden. Trains in Oslo don’t run 24 hours, so you have to take long detours with busses at night or pay obnoxiously high rates when taking a cab. No, Norway is…

Don't forget that Norway banned Life of Brian and people had to travel to Sweden to watch it.

Not even Swedes are so petty that they keep bringing that up dude. You are better of mentioning they raised the worst terrorist in the Nordics!

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#83

Post by Aloisius »

no_wizard wrote: post #56
Aloisius wrote: post #49

Earlier quoted context omitted.

Taxing people for going into debt certainly an... interesting idea.

That’s not it. That’s too general. Applying a tax when the financial purpose of the loan is solely to avoid paying any taxes on realizing the gains is what I’m talking about. This is demonstrably a vehicle of tax avoidance used by wealthy individuals to avoid taxes on what they would otherwise have to because they would have to sell the asset otherwise

I've tried to get people to explain to me how this works and I have yet to hear a answer that doesn't end with, paying far more in interest than one would have paid in long-term capital gains or needing to die a few years after the loans to prevent that - or having to sell stock in order to make payments thus paying not only interest, but also capital gains tax.

These are variable rate short-term loans. Even the best, in the US, is WSJ prime rate - 0.75 points - that would be 7.25% right now.

Maybe when interest rates were near 0, you could have stretched it for a while, but it still sounds like little more than living off credit cards.

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#84

Post by vidarh »

Aeolun wrote: post #81
vidarh wrote: post #72

Earlier quoted context omitted.

Alcohol is so expensive as a choice with broad political support in Norway. Yes, Norwegians like to whine about it, and go to Sweden or Denmark to avoid it, yet Norwegians also keep voting for the parties (almost all) that agree with keeping alcohol taxes high. Rent is high in large parts because average incomes are high. This is one of the effects of a relatively flat income structure. As someone earning far above a…

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 hour talking to an accountant beforehand, it's just a minor extra cost of doing business.

E.g. at a $10m valuation you'll end up paying You don't have to like it, and people are free to whine about it, but in reality it's a problem only if you don't know what you're doing.

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#85

Post by no_wizard »

JeffL wrote: post #76
no_wizard wrote: post #31

Earlier quoted context omitted.

The unpolluted definition of socialism is about public (e.g. social) ownership of the means of production. Technically, it’s not mutually exclusive of market systems, simply that participants are socially owned in some form. To be more specific about what I said, the roots of socialism called for the “seizing of the means of production” if governments and capital would not voluntarily convert to some form of social o…

I agree with and appreciate your comment, but I do think there is some validity in the more broad usage of "socialism" that has come to be. To steel man the other sides argument, if you have to pay taxes on an asset, be that the means of production or real estate, or else the government will come and take it away from you, it feels more like renting than owning, and the only thing you "own" is the right to pay rent o…

I do think we need some disambiguation of things.

For example, I have (in what I realize is largely futile) advocated for a return to using more accurate political terms for describing philosophies. Left and right are terrible terms to use for this. Liberal, Progressive are Conservative are much better, but still lack some depth for range. Terms like fascism, neoliberal, neoconservative etc are much better and better represent ideas in discourse.

Folks who seriously think about socialism as a real economic philosophy often also have accompanying liberal and/or progressive ideas attached to it, like higher taxes to fund social safety nets and better schools, for example.

They however aren’t the same thing. Taxes are a political act with economic consequences, regardless of what those consequences are.

Where as social ownership of the economy can have more diversity in practical implementation and thus should not be lumped together like it is.

I realize this isn’t a common discussion point, particularly in the US where these philosophies were never given equal footing to capitalism[0]. Frankly I sincerely believe most Americans, even educated folks who should know better, don’t differentiate socialism from communism and use the terms at least somewhat interchangeably and often incorrectly.

[0]: free markets aren’t inherent to only capitalism either. They absolutely exist in a market socialist economy. Remember the origins of corporations were chartered with expectation they would serve a purpose that demonstrably benefited the public good

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#86

Post by psd1 »

HeckFeck wrote: post #4
exe34 wrote: post #2

easy, impose an exit tax. capital doesn't need to be free when it's trying to evade justice. 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.

You do realise they were taxing the entrepreneurs before their companies made a profit? What sort of "justice" is that?

You can avoid profit indefinitely - just ask uber. That's if we're sticking to the customary definition of "profit".

So that you know, the practice in question is to open a line of credit on the value of your stock. This enables you to put large amounts of money in your pocket without "realising" your gains. It's a blatant tax dodge. "going into debt" lol no. Close the loophole.

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#87

Post by seryoiupfurds »

asadotzler wrote: post #78
seryoiupfurds wrote: post #59

If you ask a socialist to describe their ideal world, it is one in which everyone is equally poor. 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.

If you build strawmen it's easy to knock them down. Socialist mostly want a floor so people don't starve to death or lose their roof to medical bills. That floor would be quite easily to establish at a comfortable life for 10 billion people on this planet while still allowing for more than enough many times over millionaires.

And yet socialist countries starved millions, and their only periods of relative prosperity were when they loosened their ideology and allowed limited market reforms.

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#88

Post by karencarits »

vidarh wrote: post #67

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 a…

Note that the total tax burden has, at least seemingly, increased significantly under the current government [1]. So the conditions may have changed

[1] https://www.nho.no/tema/privat-eierskap/ny-menon-rapport-kra...

Re: Taxing unrealized gains has caused an entrepreneurial exodus in Norway

#89

Post by vidarh »

freefaler wrote: post #68
vidarh wrote: post #60

Earlier quoted context omitted.

> 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. There is data about this: https://www.gemconsortium.org/data And also check how many big companies have been starte…

> 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 years in EU.

Norway isn't in the EU, and the EU doesn't have wealth taxes, so it doesn't seem awfully relevant.

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