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Perhaps this is why they can afford many government programs that the US simply cannot. Without a prolific income stream comparable to Norwegian oil, the only w

• skj 7y ago
  Without advocating taxing any group too heavily, is there any evidence that this practice has ever created a brain drain?
  • kingkawn 7y ago
    Just anti-tax propaganda
  • isostatic 7y ago
    No
  • marvin 7y ago
    That would be a very interesting study. Anecdotally, only one person in my group of ambitious acquaintances has left Norway due to better opportunities elsewhere. Some super-wealthy (>$20 million net worth) have left to avoid paying the annual wealth tax of 0.85% of the market value of all taxes.
• thatguyagain 7y ago
  Their income tax is 22% if I'm not mistaken.
  • punnerud 7y ago
    Sales tax is 25% (lower on food + public transport). Income tax is close to 50% for most of people (progressive), in addition there is a 14% tax per employee that the companies have to pay. If you take out dividend there is a 25% tax that don't earn you pension.
    • Scoundreller 7y ago
      But where/how does the money get spent? Surely the government doesn’t burn it. And a better metric would be to look at tax burden, because top marginal rates are just that: what you pay on our last dollar, not your first. Sales tax isn’t charged on rent/food/property so it’s only charged on a small percentage of one’s after-tax income.
    • eisa01 7y ago
      Average income tax (as taken from your paycheck), seems to be around 30% - it’s lower than many other north west European countries
      • magicalhippo 7y ago
        But coupled with the VAT of 25% the effective tax rate is closer to 50%.
    • atombender 7y ago
      Norway is also one of the few remaining countries that have a wealth tax (among OECD countries, the only other one is Switzerland), which is currently at 0.85% of all net assets above 1.4m NOK, including cash, public and private stock, cars, boats, and of course real estate. Material assets such as real estate is assessed based on tables that take square footage, age, etc. into consideration. The tax is, unusually and somewhat controversially, uncapped. In theory, you could end up owing 100% or more of your income in wealth tax.
      • em500 7y ago
        Netherlands also has a wealth tax.
        • atombender 7y ago
          It's a bit different. Also, no capital gains tax.
    • vidarh 7y ago
  • marvin 7y ago
    Income tax comparisons will dramatically underestimate the tax burden for Norwegian citizens, but even then I believe you are only quoting the capital gains rate for non-securities investments. Summarizing from a comment I posted elsewhere: * 25% VAT on everything except food, which is 12%. Electric vehicles currently exempt * 40% income tax on average including 8% public pension contribution. Highest marginal tax on income is 47%, which applies to incomes greater than $116k. * Employer has to pay 14% of your salary as employment tax. Company profits are taxed at 24% (this is separate from the capital gains tax). Stock-based compensation is taxed as income, so no possibility of weaseling around the employment tax. You won't get stock-based compensation unless you're in a startup or a C-class executive at a (big) private company. The wealth tax does weird things to the valuation of stock options; they'll almost always be worthless unless your company is sold or goes public. * Net assets above ~$175k are taxed at 0.85% p.a, primary residence contributes only 25% of its market value to net assets * 29% capital gains tax, primary residence is exempt as is most tax income from renting out primary residence. Sell your home with $1 million profit? No tax. * 22% tax on capital gains or "general" incomes that are not linked to securities ownership. Relatively small amounts are collected through this bracket. * On average ~$10k tax on all new motor vehicles, electric vehicles currently exempt * A tax of approximately 30% (~5 NOK per liter) is applied to gasoline, in addition to the 25% VAT. Annual tax of ~$1000 on all motor vehicles, increasing with how good the vehicle is. Electric vehicles currently exempt. * Various taxes on alcohol, tobacco, air travel. Some municipalities have a property tax on the order of ~$500 p.a. for an average residence. I've eyeballed most of the currency conversions.
• punnerud 7y ago
  The government is not allowed to use more than 4% (return on investment), in practice today this is close to 2% because the return on the fund is lower these days.
• vonseel 7y ago
  You hit the nail on the head. Half-Norwegian here. Locals all speak of the oil as a gift to Norway from the seas/God/whatever. An economic analysis in comparison to Finland and Sweden would be interesting.
• ceejayoz 7y ago
  The US produces 10x the oil Norway does, and was producing significant amounts of oil as far back as the 1860s. We've had that profit stream, we just let it get captured by private corporations (or in Alaska's case, given away to garner votes).
  • ISL 7y ago
    Population of Norway, 2017: 5.258 million Population of United States, 2018: 327.2 million
    • asark 7y ago
      Shoulda been taxing any extraction of non-renewable resources into a fund like this. The whole country—literally, the physical country—gets poorer when that stuff's taken out. Shame we didn't capture some of that value for public, shared, long-term benefit. [EDIT] all non-renewables, that is, not just oil. Should easily make up the difference between population and extracted natural resource value vs. Norway.
      • Scoundreller 7y ago
        That makes a lot more sense than taxing people’s work.
    • ceejayoz 7y ago
      Discovery of oil in the United States: 1859. Discovery of oil in Norway: 1969. Imagine if we'd have had the foresight to take Norway's approach that natural resources are the nation's natural resources and let the returns build for 160 years.
      • chrisco255 7y ago
        We used ours to build an automobile-based economy. We didn't exactly lose out on the deal. The unfortunate discovery that CO2 contributes to global warming came much, much later. But at any rate, American economic dominance largely depends on infrastructure and mass market autos.
• DanCarvajal 7y ago
  U.S. Government spending is roughly 38% of GDP and in Norway it's 48%. I think it's safe to say that the U.S. can and does spend a lot, the debate is more towards what ends and how. I'm inclined to think we do a really poor job, with numerous reasons why. Source: https://data.oecd.org/gga/general-government-spending.htm https://data.oecd.org/gga/general-government-spending.htm
  • coliveira 7y ago
    Most spending in the US is squandered around war and socialism to the rich. The country has doing little int the last few decades to support science and combating global warming; they're also cutting social programs.
    • DanCarvajal 7y ago
      Like I said, various reasons. Though in terms of science I'm not sure you're correct. U.S. spends above age in R&D spending as a percentage of GDP. Source: https://data.oecd.org/chart/5Dtz https://data.oecd.org/chart/5Dtz
• chiefalchemist 7y ago
  > "Without a prolific income stream comparable to Norwegian oil..." The USA certainly has such streams. The difference is priorities, not revenue.
• michaeljohansen 7y ago
  Norwegian software developer here. I pay my taxes with pleasure, knowing that the money supported my education, my ability to go to the hospital, good roads, good airports, and lots of other public functions that are great because we collectively invest in them. I think anything below 20% in taxes simply means a country's public functions will suffer. It's weird to me that Americans have so much against taxes. If a country has a low degree of curruption, and has incentives to innovate in the public sector, then taxes are a good thing. Obviously I can't speak for the general population, but as for my close proximity: My colleagues think taxes are good too. No brain drain here.
  • coliveira 7y ago
    I believe that the problem in most countries is that rich people have successfully brainwashed the population into thinking that is bad to support their own people with schools, health care, cultural programs, etc. On the other hand, they successfully brainwashed the masses into believing the socialism for the rich is necessary: for example, you will see people crying on the newspapers because the rich are paying "too much" in taxes, when in fact they never payed so little.
  • Majromax 7y ago
    > I think anything below 20% in taxes simply means a country's public functions will suffer. Honestly, the biggest difference between nations isn't so much in income/payroll taxes, but in the VAT. The US simply doesn't have one at the federal level, and state sales taxes are typically in the neighbourhood of 6% (https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...).
    • weberc2 7y ago
      I don’t know what that graph is showing but it’s not the sales tax I pay at the register. In Illinois it’s usually 9-11% if I recall correctly. I’m in Chicago, so maybe the local sales tax is much higher than the state average?
  • slowhand09 7y ago
• hannob 7y ago
  > Tax any group too heavily and you create brain drain, which hurts in the long run. Sweden and Denmark disagree. And they're among the most wealthy countries with the highest standard of living anywhere.
• deleted 7y ago
  [deleted]
• roywiggins 7y ago
  The best comparison is Sweden, which is right next door, culturally and linguistically similar, but does not have oil like Norway does.
  • kwhitefoot 7y ago
    But is does have more and more easily used land. And while it looks very similar from outside Scandinavia it doesn't look quite so similar close up. Culturally similar but far from the same. Topographically they are quite different, timber is more profitable in Sweden for instance because the country is much flatter and transport is much easier. The two countries have different challenges to overcome and different histories that still affect the way people think.
• YeahSureWhyNot 7y ago
  yeah also take a look at how many immigrants and refugees they let into their country. the number is probably very close to 0.
  • ceejayoz 7y ago
    https://en.wikipedia.org/wiki/Immigration_to_Norway https://en.wikipedia.org/wiki/Immigration_to_Norway > In 2017, Norway's immigrant population consisted of 883,751 people, making up 16.8% of the country's total population. This includes both foreign-born and Norwegian-born with two foreign-born parents, and four foreign-born grandparents. In this population, 724,987 are foreign-born immigrants, while 158,764 are Norwegian-born with foreign-born parents. The ten most common countries of origin of immigrants residing in Norway are Poland (97,196), Lithuania (37,638), Sweden (36,315), Somalia (28,696), Germany (24,601), Iraq (incl.Kurdistan region) (22,493), Syria (20,823), Philippines (20,537), Iran (incl. Kordestan province) (21,364) and Pakistan (19,973). The immigration population comprises people from a total of 221 countries and autonomous regions.
    • YeahSureWhyNot 7y ago
      so more like 130k real refugees 2% of total populationthat have been handpicked and all paperwork in order or now compare rhat to UK, France or USA where the number is close to 10% where 1/3 of them are illegal, don't speak the language and don't pay any taxes.
      • kwhitefoot 7y ago
        Not sure where you get the 130k from but yes Norway is strict about applying the rules on refugee status, economic migrants are sent back out unless they qualify for a residence permit (have a job so they can support themselves and their dependents). For those who are allowed in Norway provides free or cheap language classes, accommodation, and enough money to live on. However, unlike other countries, refugees who are granted asylum are not allowed to live just wherever they like, they are scattered around the country and effectively can only move when they can provide the money to do so on their own. So one doesn't get the same degree of concentration of foreign people as one gets, for example, in Sweden where until recently such a policy did not exist. My impression is that this has made Norway a less popular destination for those who are, or cannot prove that they are not, economic migrants.
• marvin 7y ago
  Withdrawals from the oil fund amounted to 17.4% of the total state budget of Norway in 2018. (This is in the neighborhood of 3% of the fund size). This is the only "oil money" that is used on the government budget -- incomes from taxation of petroleum companies are put into the fund, never used directly. Taxation in general is very high, at approximately 55% of the gross domestic product. We could fund plenty of social welfare programs on tax revenue alone. The electorate in the US would not accept a tax burden that is close to that of the Scandinavian countries.