Norway plans to increase taxes on billionaires attempting to flee the socialistic nation, where residents already experience one of the highest tax burdens on the planet.
Officials across multiple Norwegian parties agreed to end a five-year time limit on exit taxes for unrealized gains and extend the rules “to apply to the transfer of shares to close family members living abroad” with immediate effect, according to a report from Bloomberg. As the country’s left-leaning government continues to increase taxes on the wealthy, a higher number of wealthy citizens have been seeking emigration.
Only three European countries in the Organization for Economic Cooperation and Development levy a net wealth tax, by which individuals must pay the government according to the market value of their assets minus liabilities, according to a report from the Tax Foundation. As of this spring, citizens with a net worth above $190,000 must pay 0.95%, while those with a net worth above $2.3 million must pay 1.1%.
Kjell Inge Rokke, who owns two-thirds of shipping and offshore drilling conglomerate Aker, recently moved to Switzerland. The entrepreneur, who entered the business world by selling fish from a trawler in the United States, is worth $4.9 billion, according to data from Forbes. Bjorn Daehlie, an Olympic cross-country skiing champion, has likewise relocated since the nation’s new government took control last year.
The top individual income tax rate in Norway equates to 47.8%, according to an analysis from the Heritage Foundation, which noted that the country’s overall tax burden equals 39.9% of total domestic income while government spending amounts to 51.8% of economic output. In comparison, the United States’ top income tax is 37%, while the overall tax burden equals 24.5% of total domestic income and government spending amounts to 38.9% of output.
Democratic lawmakers in the United States have recently pushed measures to raise taxes on the wealthy. Voters in Massachusetts approved a significant tax hike on millionaires during the most recent midterm elections while voters in California rejected a similar measure, even though both states are among the most heavily taxed in the nation. Wealthy Americans already provide an outsized share of federal tax revenue, even when compared to the rich in other developed countries, according to another report from the Tax Foundation, which noted that the top 1% of earners paid more than 40% of federal income taxes in 2018.
Sen. Elizabeth Warren (D-MA) has proposed a federal “ultra-millionaire” tax that would establish a 2% annual levy on households and trusts with net worths above $50 million, effectively functioning as a wealth tax. Households and trusts with a net worth of more than $1 billion would pay another 1% annual surtax.
“A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations,” she contended. “As Congress develops additional plans to help our economy, the wealth tax should be at the top of the list to help pay for these plans because of the huge amounts of revenue it would generate.”
Sen. Bernie Sanders (I-VT) has lauded Norway’s government-run education system and universal healthcare programs. He met with Anniken Krutnes, the Norwegian ambassador to the United States, earlier this year to discuss “becoming a government that works for all.”