Norway's Wealth Tax Unchains a Capital Exodus

https://citizenx.com/insights/norway-wealth-exodus/

by bko • 8 months ago

47 82 8 months ago

rdtsc2• 8 months ago

The recent wealth tax increase in Norway was expected to bring in an additional $146M in yearly tax revenue.

I guess it's interesting to see who was expecting it. The country's tax authorities, the economists, regular folks? This would seem like something a freshman in econ 101 would be able to predict.

The whole "just raise taxes from 10% to 15%" works well in an isolated environment with no other places to go. If there are places with 12% taxes, it should be obvious that's where people will move their wealth to.

Cities like Lucerne actively court Norwegian expatriates, creating communities of former Nordic residents who share similar tax-driven motivations for relocation.

Exactly. This happens for companies here in US as well. A city was raising taxes on a company headquartered there and were also asking them to donate for parks and other such nice things. Another state got wind of that, and invited the company to move the headquarters there instead, with all kinds of tax breaks and credits and such. So it's not only a passive move, but other locations actively trying to recruit entities to move there.

unethical_ban• 8 months ago

I guess it becomes "is it worth it to pressure for more wealth redistribution" or "what stick can we pair with carrots to keep greedy capital from flying away"?

Like, if you relocate your headquarters from country X then country X nationalizes assets, or you are banned from operating in the country, etc.

formerly_proven• 8 months ago

https://en.wikipedia.org/wiki/Exit_tax

ceejayoz11• 8 months ago

I guess it's interesting to see who was expecting it.

I mean, we saw good results in Boston with a similar policy. It made more than expected, and millionaires didn't seem to leave.

https://www.nbcboston.com/news/politics/data-shows-mass-is-h...

Another state got wind of that, and invited the company to move the headquarters there instead, with all kinds of tax breaks and credits and such.

This is not a good thing, IMO. It's a race to the bottom, where taxpayers lose.

(I also question the article quite a bit. The link in the line "Instead, individuals worth $54B left the country, leading to a lost $594M in yearly wealth tax revenue" looks like it should be a cite, but doesn't actually go anywhere except a page which reveals that this article is hosted by a company selling… Swiss citizenship.)

alex435785• 8 months ago

On the contrary, state level capital controls would be absurd. People and companies should be free to move to states that match their priorities.

paleotrope• 8 months ago

The Massachusetts law is an income tax not a tax on wealth.

matco11• 8 months ago

It is somewhat different: in your example, it’s just a matter of the taxation rate.

In Norway, it seems they were taxing paper gains: as an entrepreneur you take all the risk and put the effort to make your company succeed, maybe work with the smallest salary you can, so as to help your company grow more… then they come and say: “well on paper, if hypothetically you were to sell your company now, it would be worth X, so we are going to tax you on that.” …now to pay taxes you have to sell a chunk of your company, or find other ways to fund your tax bill, which is probably going to take away resources from growing your company, which probably means your company’s will grow less and hire less…

Workaccount22• 8 months ago

So people who are smart enough to start a successful company, are also smart enough to avoid Norway as a place to found it in.

There is a reason Norway, and by extension most of Europe, completely missed out on the tech boom, and all of Europe is just using American tech.

Such a shame, and Europeans still get offended when you point it out to them. Better to have stagnation than billionaires, amirite?

MLR• 8 months ago

By the by, one of the people specifically pointed out in this article was apparently paying a total tax bill of 17 million dollars against a net worth of 2 billion, and whatever tiny increase in taxes he would've ended up paying was enough to make him flee the country.

If you can't bear to pay back even a tiny, tiny fraction of what you've been given then you shouldn't have it at all.

Atomic_Torrfisk4• 8 months ago

The article is misleading, and well propaganda. The official national statistical institute of Norway tracks wealth tax revenues per year. From 2022 to 2023, revenues moderately increased from around NOK 26 billion to NOK 29 billion.

raincom• 8 months ago

Best example: Oracle moved their HQ to Texas, then moved to Tennessee.

rdtsc2• 8 months ago

That wasn't the company I thought of initially but that's an even better example, as it involved two moves!

chrsw• 8 months ago

People don't want to contribute to the country that made them rich. I expect that in a place like the USA, where your taxed money can go to helping people who don't look like you or don't have your same values. But I assumed Norwegians don't mind helping Norway.

alex435785• 8 months ago

People are already contributing a ton to Norway, with a tax-to-GDP ratio of approximately 42.2%. Norway has a sovereign wealth fund with over US$1.9 trillion in assets. Not getting taxed even more by Norway is hardly unreasonable.

At what point can we say people have contributed enough to help Norway?

subscribed• 8 months ago

I think you're misrepresenting the issue here.

You're talking about taxing income but the wealth tax is not a tax on the income. Wealthy individuals pay MUCH lower taxes (in terms of the effective tax rate) than poor oflr middle-class people.

A good example of that is the UK, where the income is taxed up to 65% (marginal tax rate between £125k and £150k) while at the same millionaire getting their money from capital gains is taxed between 24% and 32%. Of course unless the money if funneled through the shell companies (common) and the effective rate dips well under 10%

As a person who pays their tax id like wealthy individuals to pay the same rate. Simple as that.

pembrook• 8 months ago

As of 2024 it was actually 50% last I saw.

This trend is increasing across the whole continent and it's extremely bleak. The only growth sector in all of Europe is government spending. Aging populations mean social outlays are increasing every year, while the private sector is being actively looted by governments, stifled, and chased away so the economy isn't growing enough to fund the increasing social welfare demands.

Somehow my child understands that money must be earned before it can be taken away and redistributed, but the adults with PhDs can't figure this one out.

It's a death spiral of deficits, political instability, and more stupid policy like increasing taxes in countries that already have the highest taxes in the world.

Luckily Norway has oil wealth so they could probably afford to completely kill their private sector and chase away all private capital. It will just deepen their status as a petro-state. Becoming white Saudi Arabia is a bizarre goal for socialist politicians who also claim to be "moral" and care about "the environment." But as the saying goes, the children of wealth tend to make dumb decisions.

bonesss• 8 months ago

That’s not at all the issue. You’re talking about individuals paying high personal taxes, high VAT, and high local taxes for a lifetime without complaint. Also Scandinavia has some meaningful issues of immigration & welfare.

The issue is taxing unrealized gains (stocks and property). You need post-tax money to pay taxes on the gross pre-capital-gains-tax value of assets before you make money on them. It’s highly punitive for certain kinds of entrepreneurs and portfolios, and fundamentally unfair.

Grading/graduating capital gains taxes to bake the pain into the process of realizing gains would make a lot more sense IMO. It’s not about dodging paying even an excess share, it’s about avoiding economic self-sabotage.

nicbou• 8 months ago

I moved to Germany at the start of my career. Did Germany make me rich, or was it the country where I was born, raised and educated?

Immigration makes you feel weird about those things. My presence here was very transactional for the first 8 years. My right of residence was tied to my income and my good behaviour. I paid a lot of taxes and got very little in return. In fact a large portion of the government thinks I ought to fuck right off.

Nonetheless it's the system I chose and the system I believe in, so I'll gladly support it with my taxes. I am not the one who benefits, but I do it for The Greater Good.

Still, now I can become a citizen. I have all the documents; I just need to send them. But there are talks of rearmament and conscription. I need to ask myself how much I really owe this country that just takes and takes.

robocat2• 8 months ago

People don't want to contribute to the country that made them rich.

That's such a mean take. A fairer take is that they have already contributed - via income/gains taxes - and often because the company makes the country better off.

Wealth taxes are double taxation: you've worked to get rewards and then those rewards are rug-pulled from you.

Wealth taxes are also a lie: the Finland wealth tax rate of 1.1% appears so reasonable, however if your returns were 5% then the effective tax rate is fucking 22%.

If a country doesn't encourage businesses and business-owners, then the country goes to shit because there's nothing to tax (which pays for the goodness for everybody).

Disclaimer: I don't think all businesses are good or worthwhile. I do think that we need systems that deliver good compromises.

Edit: As voters we are asked to vote for party policy - however we are usually ignorant of the likely outcomes of policy. In my experience, very few people understand systems.

chairmansteve2• 8 months ago

Yes, but if there is too much wealth concentration the country turns into an oligarchy.

Obviously there needs to be a balance. Each country needs to find it's own balance. The Norwegians have chosen their balance. Not everyone will be happy.

yohannparis• 8 months ago

This is an interesting outcome.

Now you know which ones weren't really in Norway for the opportunities and the country lifestyle and values.

kazinator2• 8 months ago

Rather, what we know is that there are idiots in Norwegian politics who didn't see this coming because they don't understand basic economics, psychology, and second-plus order effects of changes to complex systems.

They tried to pull a magic lever to get more money and ended up with a big loss, which was predictable.

When you go after people's money or stuff, they fucking take evasive action! Literally everyone!

- toddler having their toy taken away by another toddler;

- homeless dude under the bridge having something taken from his tent;

- international billionaire playboy being taxed extra.

Wealthy people enjoy something called mobility. They have options. They can move wealth, as well as themselves, around the globe. Catching the poor is like fishing for eel with oiled hands.

If you're a government and want to squeeze people for money and have them be not able to do anything about it, you have to pick on the struggling working class.

aDyslecticCrow2• 8 months ago

If we cannot tax the money before it accumulates too high, there is little hope getting it afterwards. But taxing it too early penalise entrepreneurship.

Tax large properties and excessive luxury seems like one of the few methods could work, but it doesn't have the same reach.

Atomic_Torrfisk4• 8 months ago

yulker• 8 months ago

In a way it almost seems good? It seems like opportunistic capital that takes flight so easily probably wasn't seriously integrated into the local economy anyway.

Atomic_Torrfisk4• 8 months ago

opportunities

opportunities? I live here, opportunities are slim at the moment, because of the economy, not the millionaires.

wronex• 8 months ago

The problem isn’t Norway. The problem is everywhere else allowing the amassing of incredible wealth with suspiciously low taxation. But we can’t even agree on a common minimum corporate tax. So yeah. Go Norway. Shame on everyone else.

throwaway-11-1• 8 months ago

I agree, a lot of responses in this thread seems to basically just slippery slope into "guess you can't ever tax extreme wealth"

kazinator2• 8 months ago

Boo yeah! Tax the rich; feed the poor; till there are no rich no more ... because they went somewhere else.

https://www.youtube.com/watch?v=cY_1ZFNgY2g

ceejayoz11• 8 months ago

I mean, that's why https://en.wikipedia.org/wiki/Eat_the_rich exists.

BurningFrog• 8 months ago

Norway is arguably the richest country in the world, mostly from their huge oil wealth.

It's hard to understand why they keep raising taxes.

ceejayoz11• 8 months ago

It's hard to understand why they keep raising taxes.

Because they can do better things with it than buy a second megayacht.

alex435785• 8 months ago

Because if 6 people can vote to take from 4 people, odds are they will.

ZeroGravitas• 8 months ago

And if 6 billionaires can pay to take from 4 million, they will.

thinkingtoilet• 8 months ago

How much effort have you put into understanding Norway's economic situation and tax burdens? It might not be that hard to understand at all.

tyfon• 8 months ago

It's to avoid the dutch decease, but the "oil fund" revenue is now paying for 20% of the state budget so it's getting close.

The total tax level for Norwegians are only in the middle of the chart when compared to other OECD countries so it is not really that high comparatively.

The main issue with the "wealth tax" is that it is also taxing active capital (company values, stock etc) even if that capital is not making a profit.

On another note, as a Norwegian, I happily pay my taxes even if I am in the top bracket. It is for the most part spent wisely.

grebc• 8 months ago

It is nice to feel that your taxes in your country are being spent wisely.

I know it’s subjective so different for everyone but here in Australia I feel like it’s been a long time since we had actual leadership and we’ve had lousy middle management steering the ship.

magicalhippo• 8 months ago

The oil money is already about 25% of the national budget, and has recently been flagged by the auditer general as a high risk to our society[1] should stocks fall.

Spending more oil money seems like a bad idea at this point.

[1] https://www.riksrevisjonen.no/rapporter-mappe/no-2025-2026/r...

Workaccount22• 8 months ago

Next up is NYC, with an economy about 2x the size of Norway's. Let's see how that goes over...

seg_lol• 8 months ago

How large should the exit tax be? Earned it here, the money stays here.

MrGilbert• 8 months ago

I'm a bit… hesitant to accept the article at face value. Obviously, the "mission" of this company is to help (rich) people to secure their wealth. I never knew such services exist, which might just mean that I'm not rich.

The article states: "This is why obtaining second citizenship and multiple passports is a crucial diversification strategy in the modern world."

Sounds like blunt advertising to me.

ml-anon• 8 months ago

Ding ding ding

tencentshill• 8 months ago

It's an ad for their service. By "The Network state AG", co-founded by Alex Recouso (who curiously does not have a Wikipedia page, and very little information on google not controlled by him). Related to a concept promoted by A16Z, Vitalik Buterin, Srinivasan (an investor!) and other creepy crypto billionaires.

It uses the same sentence structure as Palantir's advertising. Very final. Very direct. Inevitable.

Incredibly off-putting knowing the philosophy of those invested in the concept.

rozap• 8 months ago

Yea, this is an ad for yarvinist nonsense.

I think a lot about how there's no shame in our industry. It's really wild how these folks are just so blatantly antisocial.

Qiu_Zhanxuan• 8 months ago

Those people should be named and shamed.

If they're bi-national, have their citizenship revoked and them and their descendant forbidden from entering the country ever again unless they pay the tax they evaded.

gnarlouse• 8 months ago

Make Class Warfare MAD Again.

d--b• 8 months ago

this is why they should implement exit tax like the us does.

Atomic_Torrfisk4• 8 months ago

Anyone who actually bothers to reads this article will know that it's blatant agenda pushing, nothing more. Here are some of the highlights:

a) The article is published by a company who's caters to rich individuals who want to gain citizenship in other countries by paying their way in. Morally dubious to begin with.

b) The 54B capital flight figure is unsubstantiated. They cite no sources, only a single hyperlink that redirects to their own completely unrelated webpage??

c) The lost tax revenue estimates also seem to be completely made up. In fact, they make no mention of the figures past the title and introductory paragraph. A complete joke of an article.

If you're interested to know the real numbers, the official national statistical institute of Norway (link below) tracks wealth tax revenues per year. From 2022 to 2023, revenues moderately increased from around NOK 26 billion to NOK 29 billion. 2024 statistics are only due to come out this year.

https://www.ssb.no/en/statbank/table/10333

fra• 8 months ago

In practice, I don’t think tax policy is the primary driver for where people chose to live. Even very wealthy people.

If I were very wealthy the first thing I would want to buy is proximity to the people I love, the food I like, the culture I’m excited about. For many people that means being close to home.

I can’t imagine how shallow my life would have to be for me to optimize it around taxes.

digdugdirk• 8 months ago

That's the thing though - the ultra wealthy already do buy that kind of proximity. They have multiple properties all over the world, accessed via private jet, helicopter, or mega yacht. They live in an entirely different reality compared to someone with a job - even someone who works in the c-suite.

They also aren't the ones doing the optimization. They have people for that. This article seems to be written by someone who is trying to bring that kind of service down the ladder to the slightly more common folk - the mega rich, not just the ultra rich.

everyone• 8 months ago

Well good riddance to the fucking parasites.

B1FF_PSUVM• 8 months ago

"This is known as 'bad luck'"

politelemon• 8 months ago

The article is suspicious to me and I am flagging it.

It does not show any sources, it appears to be an attempt to go viral to spread the misinformation circularly. Further, the wealth tax news was from 2023 but they call it 'recent' (the post is dated 2025).

This comment chain on reddit shows that there was a revenue decrease likely due to petrol prices. https://www.reddit.com/r/ProfessorFinance/comments/1or4l6u/n...

Looking at the NO gov website, I can see that there was an increase in revenue from the wealth tax but a decrease from petroleum. https://www.ssb.no/en/offentlig-sektor/offentlig-forvaltning...

So the citizenx site is falsely claiming the decrease in order to further its own agenda.

lo_zamoyski3• 8 months ago

Apparently, the Laffer curve is yet to become common knowledge.

ceejayoz11• 8 months ago

The Laffer curve has yet to become knowledge, period. It's theoretical (if that; hypothetical might be fairer), overly simplistic, and everyone can basically assert at-will where we are on it at any time.

https://en.wikipedia.org/wiki/Laffer_curve

Practical tests have… not gone well. https://en.wikipedia.org/wiki/Kansas_experiment

lo_zamoyski3• 8 months ago

The Laffer curve doesn't tell you what the revenue-maximizing rate is or how to structure taxes.

That point is that capital tends to move away from places with high taxes toward those with lower taxes passed a certain threshold. This seems obviously true.

Practical tests have… not gone well.

You mean like this Norwegian "test"?

asdfman1234• 8 months ago

I'm disheartened by presumably left leaning people who are responding to this news with some variant of "shame on them" and "billionaires are bad."

I'm not trying to defend billionaires but I feel like the last years of left-wing political action has been the left trying to mash the "shame" button without realizing the button has been disconnected behind the panel.

The left used to be able to deplatform people. They can't anymore because there's more platforms. They need to think more in terms of sober cause and effect and basic political realities. If they don't, they'll just convince people that they can't govern.

ceejayoz11• 8 months ago

I'm not trying to defend billionaires but I feel like the last years of left-wing political action has been the left trying to mash the "shame" button without realizing the button has been disconnected behind the panel.

"The shameless have won" is not the left's fault.

asdfman1234• 8 months ago

But that's the problem right there, thinking in terms of blame. The left seems to be more interested in moral correctness than winning. It doesn't matter whose "fault" it is, it is literally an irrelevant discussion. I'd just like to see the left win more.

There's also the tension between "the sort of narratives they tell the people to gain public support" and realpolitik. Narrative is necessary in politics but I'd like to see more of the informed, educated left think more in terms of political realities.

boriskourt• 8 months ago

As others have pointed out this is an advertisement for this service, with a lot of unsubstantiated claims.

chaosprint• 8 months ago

The most foolish method is calculating startup valuations. While there are some so-called discounts, they are essentially negligible. You can think of it this way: if you receive $3 million in seed funding, the government considers you to have $30 million * your equity wealth. If you're one of two co-founders, owning 40% of the shares, that's $12 million in assets! Haha, the government thinks that's equivalent to owning 20 apartments in Oslo. Okay, they seem to have completely ignored the risks and mortality rates of startups.

Of course, this policy wasn't initially targeted at startups; it was primarily aimed at traditional industries. The reality is that the wealthy have plenty of ways to avoid taxes or even leave the country. People who own 20 houses in Oslo are unaffected; the only problem is that there are fewer people starting businesses and fewer opportunities to raise funds.

It's just that the people who formulated the policy were so stupid that they didn't understand the situation at all. These fundamental aspects won't change, because Norway's oil and sovereign wealth fund are enough to sustain them for a long time.

aDyslecticCrow2• 8 months ago

Sweden cut the wealth tax, and got a very high startup to capital ratio; but a rapidly rising wealth gap as a consequence.

That wealth came from the local economy so it's reasonable to think it should return. But in practice there does not seem to exist any good approaches to do so.

ceejayoz11• 8 months ago

Sweden is also a bit of an exception.

https://en.wikipedia.org/wiki/Laffer_curve

A 2011 study by Trabandt and Uhlig published in the Journal of Monetary Economics estimated a 70% revenue maximizing rate, and estimated that the US and most European economies were on the left of the Laffer curve (in other words, that raising taxes would raise further revenue). A 2005 study concluded that with the exception of Sweden, no major OECD country could increase revenue by reducing the marginal tax rate.

rullera• 8 months ago

This is an ad :/

chairmansteve2• 8 months ago

I don't know the details in this case, but extreme wealth is corrosive to democracy.

Maybe Norway is a better place now...

Norway's Wealth Tax Unchains a Capital Exodus

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