Taxing Entrepreneurial Wealth: Evidence from Norway, 2021–2025
nber.org
nber.org
Naively, it felt like a lot of fluctuations and rubberbanding occurred right after Covid which wouldn't necessary make representative set.
The author concludes that he found no significant negative effects from Norway’s wealth tax reforms. But I think he misses a more important question: Did the reforms contribute to economic growth?
If the economy isn't growing, that is a problem. And if a tax reform fails to improve growth, then the tax only increased government revenue. This might be good thing for goverment, but it bleeds enterpreneurs.
If there is no evidence of a positive contribution to economic growth, I wouldn't call it a successful growth reform.
Then, I think, wealthy people can take more risks. They have enough resources to start over if something does not work. Risk takers have their role in innovations for example.
An oil scheikhdom is not the place to draw generalizations from when compared tk advanced industrialized countries.
So, in my opinion, we cannot reasonably extrapolate from policies implemented in Norway to predict whether they would work in California or the U.S.
The British destroyed their industrial base from within not from taxes they just gave up in the face of competition and their three sibling countries Canada, Australia, and Zealand have been going down the same road until they got a recent wake up call, not in good way from Donald Trump of all people.
Europe could benefit a lot from breaking the stranglehold of old money.
I actually support wealth taxes (say 0.5% like Swiss) but inherited wealth is a way bigger issue than generated wealth.
Now that they're doing their best to undermine American democracy, perhaps we should do more to encourage them to leave.
He seems to have come to that conclusion, fwiw.
Who was complaining about that? Not me.
Take any non-billionaire and ask them if, given equal options A and B, they'd prefer to spend X% more on option B. They'll say "no." Billionaires aren't magically different. You'd do the same. This isn't people leaving because they're immoral.
I think recognizing that is important because, whatever your goals are, you likely won't reach them unless your actions correspond to reality. Put yourself in a departing billionaire's shoes for a moment. A country has put together enough political momentum and popular opinion to make taxing you in particular at a rate higher than your countrymen something viable and well supported. Does that sort of antagonistic climate sound like the home you want to spend your remaining years in? No, of course not. The only time I'm willing to not be the sort of "knob" who leaves that sort of nonsense is when I choose to be the kind of "knob" who fights back against such impropriety.
Are some, maybe most, of the departing billionaires selish, greedy, and maniacal? Sure, probably. Is the fact that they're leaving evidence of that? No, absolutely not.
Going back to my main point, that if your views don't line up with reality then you're likely to make or suggest the wrong courses of action, there are remarkably few worldviews I think are consistent with "we should selectively tax billionaires and everyone who disagrees can fuck off if they want to and we'll be better off therefore." Your statements seem reasonably aligned with <maximize some definition of happiness amongst non-billionaires> from a preferences standpoint, but even for that goal I don't think your proposed actions are close to correct. Other goals seem even less aligned.
No, they aren't like you or I at all. You'd actually probably loan me a buck if I asked you.
Okay, great. What now? Your framing was that the sort of billionaire who wants to leave because of billionaire-specific tax hikes is not the sort of person you want in your country anyway.
(a) I still haven't seen any evidence that you think that leaving is itself evidence of any particular wrongdoing. Your argument is something along the lines of (i) billionaires are always bad, and (ii) they're so different/bad that attempting to apply a comparison to you or I is unfounded in the first place. That might all be true, but you could've dropped it into any discussion about billionaires. The discussion about wealth taxes is seemingly irrelevant to your argument and also to your point.
(b) The thing you said is that we don't want those people here anyway, so let them leave. That's not consistent with my attempt at an empathetic understanding of your viewpoint. I think you'd much rather they stay and contribute. If that's the case, tribal conversations about in groups and out groups aren't especially useful. As an example of something more productive, we could talk about how wealth taxes could include provisions for moving wealth out of a country (to mitigate the damage from 2nd-order effects of such legislation), how they could be more stringent about which people qualify (if you can "vacation" in a country 300 days per year and not pay a wealth tax, is that functionally different to a billionaire with a team of lawyers from the wealth tax not existing and the billionaire living without issue in the country in question?), etc.
For that matter, if the point is that they aren't like us at all and I can't generate anecdotes to relate to them (an idea I disagree with, but I'm rolling with it for the moment to see what happens), what's to say that things aren't similarly unfathomable regarding their philanthropy? You'd happily pay more taxes. What if those taxes are used to set the national guard on our own citizens and stifle their voting efforts? What if via your personal connections you can ensure instead that those funds actually go to feeding a poor person a hot meal?
On the one hand, I get it. I see rich people screwing us left and right, seemingly just because they don't even recognize that we're people too. On the other, they're also just people, with their own motivations, I want to be cautious overly maligning any individual because of a large fraction of bad actors, and I especially want to be cautious about distracting ourselves from our actual goals and the things which we can do to achieve them.
My argument is simple. If you are so petty over the prospect of a single digit percent tax on your billion of dollars of wealth so as to say "I will take my ball and go home and also publicly whine about taking my ball and going home," then please take your ball and go home. Let the more serious billionaires who aren't so petty stay behind and hopefully use their wealth to do something more productive than their current modus operandi of being a human version of Smaug laying on his horde.
By all means if they are that petty, I think they ought to leave and we'd be alright without them. I'm willing to bet most don't leave because in the case of the potential Californian wealth tax, California is already a high tax state. And yet, there they are, paying high taxes to live like mere kings in California, when they could instead pay low taxes to live like emperors, like the Waltons or the Wexners quietly holding court on some massive compound in the middle of the country. Seems to indicate there are stronger sticking factors than the tax burden. All the more reason to discount those arguments and see them as they are: petty and even childish.
There's certainly a spectrum of this psychopathic billionaire tendency mindset. But there is a certain amount of disregard for your fellow man you have to maintain in order to even feel comfortable accepting that amount of compensation or personal profit making. I mean just think of the hubris alone of what accepting that package from a company you directly control really says. It's money that could buy more domain expertise, more actual talent that drives the business in whatever it is, but instead it goes to your pockets to buy what, your twenty third home? 65th car? Your 8th boat? I think the actions and scale really speak for themselves here.
What might you imagine my actual goals are? You think presence of a billionaire is required for them? I will answer this for you with a resounding "no."
I'd suggest a quick review of the Laffer Curve and how capital flight has resulted in places reducing their tax take due to greed/communism/whatever.
If you want to pay more into inefficient bodies, you are free to do it but don't impoverish your nation with nonsense politics when less than 10% pay 75% of all tax.
You have no problems with that proposal, right? Or, are you going to argue in favor of taxes? But, what if they leave?
The logical limit of your argument is communism and everyone with the ability to read a history book knows that results in corruption and death.
What's the plan?
Forced revaluation and selling of assets once per year?
Who values privately held assets?
Most people actually do have lived experience with communism, just that it's within the scope of their own family unit.
Be gone, bloodsuckers! I will seek employment at places of businesses that are not so foolish to waste so much money on a chief executive. And wouldn't you know, that is the vast bulk of them. The vast bulk of business owners and executives are not in fact billionaires. That represents a failing. Zuck took advantage of his legal rights to the company to enable that compensation. If the shareholders had better control of the shares with voting rights (zuck possesses super shares so that he cannot lose majority voting control) they would have never let that happen for zuck. He is as much a parasite to his own investors as he is to wider society. Greater even, as that is more directly their money that he is spending fueling up that boat.
Have you ever paid Meta anything? Has Meta ever taken any money from you?
> He is as much a parasite to his own investors
None of his investors were unwilling. They can also pull out any time they want.
The irony of places like NYC and SF: so much need from education to sheltering and feeding homeless to building out transit or bettering healthcare outcomes. And yet, two hands raise in the air in a shrug, no money for it is the claim. But also yet, steps away from these problems in these two cities, mindbogglingly vast flows of money, the skim of which would solve all these problems occurring outside the doorways of these buildings.
A tough nut to crack I guess.
Or did you freely give it to him in exchange for a product?
Fun story. Massachusetts decided they were going to go after wealthy people by taxing the sale of yachts built in the state. The wealthy simply bought yachts elsewhere, and many thousands of craftsmen were out of a job. The state rescinded the tax.
Like Jeff Bezos. And I personally know a couple wealthy people who moved there to avoid recent taxes. A real estate agent I talked to recently said that half her clients were selling their homes to move away from WA taxes.
Who are you gonna tax when they leave?
"what percentage of federal taxes do the top 1% pay?"
and the response:
"38.4% of all federal individual income taxes."
2. income comes from many sources, not just wages. Capital gains taxes, for example.
Top 1% wage earners is not the top 1% wealthiest.
By all means, let Zuck and Musk and their ilk become trillionaires. That's definitely going to make our lives better. It should trickle down after all. Waiting any day now.
That’s not some “piss away” tax. Besides, who are you to say how much money is too much for someone to have?
You are right though, who am I to say who has too much money? I am only a wage slave. I don't know how to manage millions let alone billions like God Emperor Zuck. Maybe it would be better if he had even more of my money and more of yours as well. Better yet, lets wind down the state medicaid program and allow him to keep more money under his name. That money to treat my neighbors would be better spent on Musk buying back meta stock, or maybe an even larger boat. Let's wind it all down. Save money not having to print any dollars and just wire it to Zuck and Trump and Lutnick and friends.
Nobody is stealing from billionaires.
The USA is better at playing the zero-sum game of where to begin a business. Zero-sum because many businesses are winner-takes-all and the country that business starts-up in is the one that wins.
Business founders are greedy (almost by definition), and a country needs to think what marginally motivates a founder to keep on going (or to founding 2nd/3rd business).
Hate Meta, or even hate Zuckerberg, but the USA is winning export earnings from the rest of the world because of Meta (and likewise other billionaire companies).
On the third foot, I'm guessing Zuckerberg has other motivations than more dollars?
The game isn't equitable, and the wealth disparity is heinous, and perhaps even the products are despicable. However everyone in the USA is living off the back of that wealth coming into the country.
It is really noticable in New Zealand where top marginal rate is 39% and GST (sales tax) is 15%. Why work an hour to bring in in a dollar to NZ when you get less than 50 cents (after all the other taxes). Our left parties want to tax wealth at 50%+ (if 2% wealth tax and drawdown of 4% ). Invisible inflation makes the taxation much much higher.
A wealth tax of 1% sounds trivial, but it isn't when compared to risk-free returns after drawdowns.
Unfortunately most voters are not founders, so they don't understand marginal motivation. And voters don't understand who brings money into the country. Voters just want increasing amounts of money spent, and politicians cater to them.
If anyone here is a game mechanics designer, what do you most notice about the motivation of taxing wealth?
If NZ really wanted to help startups they'd sort out the tax problems with options so that companies can actually interest people in taking risk by working for new businesses.
Personally, I think I'd be in favour of a wealth tax if I had the kind of wealth that could be taxed. I don't resent the tax I pay now.
Humanity should not strive for kingship, whether minted through "god given right" or coin. We should strive for collective, distributive, balanced control of resources.
Or the 4,400 millionaires Musk created with the SpaceX IPO.
> We should strive for collective, distributive, balanced control of resources.
It's been tried many times. Doesn't work.
It's hard to take anyone seriously when they make these kind of ludicrous, absolutist claims. Yes, it's been tried, and continues to be tried, by literally every country on earth, in various formulations. Maybe we haven't quite hit on the winning formula yet, but that's no reason to stop trying.
If you'd read any history, you'd know we'd tried pure unchecked capitalism without redistribution before, too. Late 17th century Britain comes to mind. I don't want to spoil the story too much, but it turns out that "doesn't work" either.
I have. Read up on the USSR, China, Vietnam, Cuba, Cambodia, etc., under communism. Nothing like that has occurred under capitalism. I suggest "The Black Book of Communism" for you. 100 million dead.
> it turns out that "doesn't work" either.
Google sez: "the standard of living for the laboring population in late 17th-century England generally rose"
> Google sez
I see the problem.
If that's your best argument, billionaires are in trouble.
(And keep in mind that FSD cars are 8 times less likely to get in an accident.)
Billionaires get that way by making things and services that people want to buy.
Very few normal, sane, and well balanced people are capable of doing the things required to become a billionaire. That level of wealth requires such a massive disregard for the well-being of the rest of humanity that it leads to some terrible outcomes. Being so wealthy that nobody can really do anything to get in your way is inherently bad for the human mind.
And you can't have democracy (everyone has an equal say) when you have large wealth inequality, because wealth is power. In practice we have a few billionaires who control everything... that's not democracy, that's oligarchy.
Start with the startups, and move into the equity funds and family offices. Once you hit certain thresholds, you pay a 2.5% wealth tax or provide 1% equity, capped at 25%.
It’s totally legal now as the toadies on the Supreme Court have adopted an expansive interpretation of executive power.
Totally fair to claim this cannot scale to a "big" country, but it absolutely works to attract capital.