Analysis-Norway's wealth tax trades millionaires for equality

By Francesco Canepa and Terje Solsvik

OSLO (Reuters) -Sitting successful his lakeside villa successful the Swiss metropolis of Lucerne, Borger Borgenhaug misses his grandchildren and the odor of the Nordic oversea connected a wide summertime night.

The carpenter turned real-estate tycoon says that is the terms helium pays to flight Norway's beefed-up wealthiness taxation – an yearly levy that has driven hundreds of millionaires overseas portion underpinning 1 of the world's astir adjacent societies.

"The governmental clime successful Norway has go progressively hostile to ​business owners," Borgenhaug, who near successful 2022, told Reuters.

With a wealthiness taxation dating backmost to 1892 and a civilization of openness that allows citizens to presumption the taxation returns of others, Norway has much acquisition than astir successful squeezing the rich. Its exemplary offers ‌lessons for countries debating akin moves, from Britain to France and Italy, oregon adjacent a metropolis similar New York.

The takeaway: a wealthiness taxation volition scare disconnected immoderate millionaires, but if acceptable broadly enough, revenues tin inactive beryllium worthy it.

EXODUS OF THE WEALTHY

The taxation was a defining contented successful Norway’s predetermination successful September, which returned the Labour Party to power. The enactment ‌had raised the levy and tightened exit rules during its erstwhile term.

Individuals wage 1% connected nett wealthiness betwixt 1.76 cardinal and 20.7 cardinal crowns ($174,000–$2 million) and, since 2022, 1.1% supra that. Exactly 671,639 radical – astir 12% of the colonisation – paid successful 2023.

Main homes bask a 75% discount connected assessed value; shares and commercialized spot get 20%. Assets overseas are included, but indebtedness is deductible.

Leaving Norway triggers an exit taxation of 37.8% connected unrealised superior gains supra 3 cardinal crowns - specified arsenic notional gains connected shares that person gone up successful worth but are yet to beryllium sold. Loopholes that allowed emigrants to defer outgo indefinitely were closed successful 2024.

The changes turned a trickle into a stream. Data from blimpish think-tank Civita shows 261 residents with assets supra 10 cardinal crowns ($973,000) near successful 2022 and 254 successful 2023 - much than treble the emblematic ⁠rate earlier the hike.

Business mag Kapital's ranking of Norway's 400 richest radical shows 105 present unrecorded overseas oregon ‌have transferred wealthiness to relatives who do. Some of their pictures bent connected a "wall of shame" successful the offices of the small, absorption Socialist Left party.

THE CASE FOR: EQUALITY AND REVENUE

Supporters reason the taxation acts arsenic a redistributive backstop successful a state that scrapped inheritance taxation successful 2014 and ranks among the world’s wealthiest acknowledgment to oil, shipping and fisheries.