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I live in a country with wealth tax (Norway), and I'm a bit conflicted on it. On one side, it is effectively the only real tax a many in the "ownership class"

I live in a country with wealth tax (Norway), and I'm a bit conflicted on it. On one side, it is effectively the only real tax a many in the "ownership class" are paying - relative to their wealth. On the other side, it is a really problematic tax for entrepreneurs. It is downright horrible for startups and scaleups - critical funds that should be used to grow your company, has to be given out in dividends to founders, so that they can afford to pay the wealth tax. And it is unfair - as it is a tax that foreign owners don't have to pay, but domestic owners have to pay. One natural consequence of this has been that the wealthy people are simply...leaving the country. (our total / combined max wealth tax is 1.1%)

WalterBright 2y ago
Sweden, France, California, Washington state and NYC have discovered once again that taxing the heck out of rich people causes them to leave. And when they leave, they take their spend/invest/hire money with them.
- FrustratedMonky 2y ago
  Sure. If you can move to another state to live cheaper, why wouldn't people. That is the argument for a more nationally consistent tax code, so the 'rich' can't just game the system by moving to the one cheap state where they bought off the politicians. And same goes internationally, if all countries would enact laws against money laundering, or at least enforce it, then the rich wouldn't so easily move their money around. Just because they can avoid taxes doesn't mean it is the governments fault for having taxes.
  - kjksf 2y ago
    Or maybe it's an argument for allowing states to try different economic strategies and compete for business based on outcomes of those strategies. If California taxes people and businesses at insane levels, maybe we shouldn't replicate insane level of taxation everywhere else in U.S., on the off chance that it is not, in fact, an optimal level for generating wealth for the people. Maybe Texas and Florida should be allowed to enact competing taxation schemes so that we can see which one is better. And maybe Americans should have a freedom of movement within U.S. without having their private property confiscated by the state when they try to leave. The justification for taxation based on residency is that you use commons like roads and school and police that the government funds so you need to contribute to funding those things. What exactly is justifications for hitting people with more taxes when they try to leave the state?
    - arrosenberg 2y ago
      > If California taxes people and businesses at insane levels, maybe we shouldn't replicate insane level of taxation everywhere else in U.S., on the off chance that it is not, in fact, an optimal level for generating wealth for the people. This is nonsense. California is the strongest state in the union economically, with one of the highest quality of life and income per capita. We have an affordability crisis that is related to the topic at hand - billionaires hoarding wealth and driving up the cost of living - but that's a national problem that California can't solve on it's own. Our taxes pay for the things that enable our success - roads, power, dams, parks, libraries, and all that other good stuff. Meanwhile Floridians can't use their beaches due to red tide and dumping tires in the water. The people of Houston JUST got their power back yesterday a week after a mere Category 1 hurricane. Maybe they should raise some taxes and do something about that so their cities stop losing economic productivity multiple times a year...
      - WalterBright 2y ago
        https://www.statsamerica.org/sip/rank_list.aspx?rank_label=pcpi1 https://www.statsamerica.org/sip/rank_list.aspx?rank_label=p...
        arrosenberg 2y ago
        California is the 4th highest state in income per capita, which supports my statement. Thanks :)
        WalterBright 2y ago
        Its tax collections are going down despite increasing taxes. https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT3CANO https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT3CANO
        arrosenberg 2y ago
        That line is trending upward. Collections are down because the economy cooled after Q2 2022 due to the end of zero-percent interest rates. Again, something beyond the control of the state government.
- pseudocomposer 2y ago
  Would this not be easily solved with a one-time 50-90% wealth tax when they exfiltrate their money from the place where others earned it for them, rather than the ~1% annual wealth tax they want to leave over?
  - dexterdog 2y ago
    Because most will leave as soon as the law is announced before it becomes law in that case.
    - ryandrake 2y ago
      OK, so make it retroactive on the day the law was passed. Laws are words written on paper, it's not like dark wizardry. These kinds of objections always come up. "But, rich people are oh so clever, and they will exploit loopholes in any law that gets written!" Well, write stronger laws. Don't include exceptions. Lawmakers need to think more than 5 minutes about what kinds of options/resources are available to people, and how those people might game their way into getting around the spirit of the law.
      - WalterBright 2y ago
        > OK, so make it retroactive on the day the law was passed Ex post facto laws are illegal. Even so, you might get the taxes once, before they leave. That's not a plan for a future.
        ryandrake 2y ago
        First up, ex post facto clauses have been interpreted as applying to criminal laws only. AFAIK there exists no constitutional bar to retroactive tax legislation. The same may be true for states. And, It's not like they're all going to leave. Sure, a few grumpy ideologues like Musk will Go Galt and move away, but it's not like everyone subject to the tax is going to suddenly leave. People have been predicting the demise of California, New York, and so on forever, yet somehow, they have not all moved to Texas yet, and we still have plenty of high-earning taxpayers here. Maybe they like clean air and a functioning power grid, I don't know.
- infinitezest 2y ago
  There is also the upside of them taking their lobbying dollars with them.
  - WalterBright 2y ago
    The USSR did not have lobbyists nor wealthy people. Didn't work out too well for the commoners.
- rvrs 2y ago
  Ah yes California, Washington, NYC — places where rich people famously do not live
  - WalterBright 2y ago
    All have seen an exodus of rich people, mostly leaving for Texas and Florida, which are booming. Musk famously decamped from California to Texas. Bezos from Washington to Florida.
- jmward01 2y ago
  A statement like this probably needs a source or two to first show it is true (wealth taxes actually are causing rich people to flee) second, show that they actually do take their spend/invest/hire money with them and finally that it is harmful that that happens. Leaving creates a vacuum and if the rich really are leaving then it would be a big vacuum that clearly can't be filled with someone else that is rich since they are all leaving. Without someone big there to fill the vacuum it that implies it is being filled with a lot of smaller companies. This actually sounds like a good thing to me to tell you the truth. Can we emphasize this effect?
  - WalterBright 2y ago
    Jeff Bezos famously left the state just before the Washington's new cap gains tax targeted at him was set to go into effect. I know other people with 8 figure fortunes who left, too. I didn't know it was controversial that spending a lot of money in a local economy makes it more prosperous, and when a big spender leaves, the local economy goes down. The Rust Belt is an example of the latter.
    - shakow 2y ago
      > spending a lot of money in a local economy makes it more prosperous Do these people really spend a lot of money in the local economy? Realistically, even assuming they pay a couple dozen people $100k/year for service and indulge daily in 3 $500 meals, what will be the actual influence on the local economy? > The Rust Belt is an example of the latter. The Rust Belt is an example of what happens when the state allows companies to leave, build their gadgets for a tenth of the price across the Pacific, then sell them back home without serious tariffs; not an example of what happens when Mr. Studebaker or Mrs. Bethlehem Steel leave for Florida.
      - WalterBright 2y ago
        Zillionaire Paul Allen was famous for spending billions in the local economy. He transformed Seattle. He's passed away, and his projects are being sold off and closed down. > the state allows companies to leave If you have to build a wall around your state to keep people from fleeing, you have failed.
- feedforward 2y ago
  The US had a tax rate of over 90% for the wealthy in the 1950s (although with loopholes they could push it lower, like now). Didn't seem to have much of an effect on the wealthy, and the US working class did very well.
  - WalterBright 2y ago
    Very few paid those rates, because there were a large number of tax shelters available. For example, a lot of your personal expenses could be covered by your business. Reagan, as part of the deal to lower the top rates, traded away those tax shelters. The thing about tax shelter investing, however, is they only make sense as a tax shelter. They are poorly performing investments otherwise. A tax policy that encourages poor investments is not a good policy. Keep in mind that the government in the 50s was far, far smaller than it is today. Funding the vast growth in government is inevitably going to get sucked out of the middle class.
    - omnimus 2y ago
      > Keep in mind that the government in the 50s was far, far smaller than it is today. Funding the vast growth in government is inevitably going to get sucked out of the middle class. And where US gov grew? Army. Where that money goes? To few weapon contractors = to ultra rich. Its not like US put those investments in some other pocket than top 10%
  - throwaway7ahgb 2y ago
    The old top tax rates are constantly echo'd around and not relevant towards any conversation. The only thing that matters is what the effective rate was. They could create a 100% tax bracket but if nobody paid it, it's just words in a book.
- eigart 2y ago
  Damned if you do, damned if you don’t. To me it looks like a race to the bottom. We have a very nice society, and most people are happy to pay taxes. We also don’t tax rich people more in relative terms, it’s just that it creates a threshold level of wealth where you can choose to move.
  - RhysU 2y ago
    > most people are happy to pay taxes Source? I hate paying taxes.
    - eigart 2y ago
      No source, it’s just my impression that most Norwegians feel they get a fair deal.
    - immibis 2y ago
      If you live in America, Republicans made it as difficult as possible with the intention of you hating it. If you live in any other country, you simply get less money than you would have otherwise.
      - danpad 2y ago
        that is simply not true. Try to solve the scenario of earning 10 USD a month via YouTube monetization with your tax domicile being in the Czech Republic while being full-time employed. "Simply get less money" is a vast overstatement.
      - throwaway7ahgb 2y ago
        I lived in London and left after paying 50%+ income on taxes. I also had to get private healthcare because I couldn't wait weeks to see a doctor. So no, it's not just US Republicans, please stop.
        danaris 2y ago
        The Tories are very similar in their outlook and practices in many ways.
- carlob 2y ago
  This is patently false for the only case I have data on. The wealth tax in France had quadrupled its collections in a time where the French GDP had doubled, and all this was without an exit tax. Unfortunately Macron got rid of it a few years ago and replaced it with something that only applies to real estate.
  - omnimus 2y ago
    The thing is lots of the ultra rich moved to Luxemburg so this happened and this is going to keep happening. Its same why every tech company has european HQ in Ireland. If it were EU wide it might work somehow but with so many ultra rich high in politics there is no way this could happen. There is always going to be tax haven countries taking advantage of this situations. New French gov will want to reintroduce these taxes but i think they have to find different ways.
    - carlob 2y ago
      I don't think you even need the ultra rich high in politics, there is a more mundane explanation: countries are competing against one another to attract the HQs. It's a race to the bottom and it's called fiscal dumping.
  - throwaway7ahgb 2y ago
    It's kind of amazing when people talk about a tax failing as a bad thing. This leads me to believe that most people want taxes on wealth for punishment and no other reason.
    - carlob 2y ago
      I want wealth taxes for redistribution mostly. So yeah.
- piva00 2y ago
  Sweden has a large ratio of billionaires relative to the rest of the population, and they aren't leaving. It's 14th in the world by number of billionaires, 7th per capita [0]. Rich people here pay a flat 30% tax on capital gains so they usually pay less taxes relative to their income than a salaried person earning >45-50k SEK. There's no wealth tax in Sweden. I don't think you know much about Sweden's tax system (or even in general) given this comment. [0] https://en.wikipedia.org/wiki/List_of_countries_by_number_of_billionaires https://en.wikipedia.org/wiki/List_of_countries_by_number_of...
- immibis 2y ago
  And what's wrong with that? Regular people, not having to compete with rich people, might actually be able to afford stuff.
FrustratedMonky 2y ago
The US had same problem with family farms. The farm itself was very valuable, so when being left to the children as inheritance, it was heavily taxed. But, this is a problem, because what is left is not enough for the kids to make a living. So in the act of trying to tax the rich with inheritance, there are some lower/middle layers getting hit very hard. Taxes don't have to be a flat number, there should be exemptions carved out like for family farms. But of course, anything can be gamed.
- rahimnathwani 2y ago
  What is special about family farms, that doesn't apply to other family-owned businesses?
  - mickael-kerjean 2y ago
    your typical business isn't working at the same level of the maslov pyramid than a farm. I don't want a world where only the wealthy can afford to give milk to their kids
    - FrustratedMonky 2y ago
      I think because farms need to be a certain size to be effective. And, even though they might be worth a lot as real-estate, the land could be worth millions, the people farming could be poor. Guess, to your point. If a family owns a dry cleaner, similar situation.
  - throwaway7ahgb 2y ago
    Because when the US was settled (not that long ago), 90%+ of people were farmers. Now the East and West coast voters see no value in these farms so want the government to tax them away. They also naively think that the local farmers market can supply the country's food supply.
- Terr_ 2y ago
  > The US had same problem with family farms. [...] it was heavily taxed [...] what is left is not enough for the kids to make a living Math or it didn't happen! I say that because I've seen this kind of claim many times, and usually either (A) the Federal Estate Tax has no real affect on what happens or (B) their definition of "family farm" is wildly grandiose. https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threatens-small-farms https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threa...
para_parolu 2y ago
Is it a big problem for country that wealthy people are living? I thought most country wealth comes from oil and gas. And until it’s no longer the case it somewhat makes sense to avoid large wealth gaps.
- roenxi 2y ago
  That argument is a bit circular. It is a bit like saying someone doesn't need to get a law degree until after they've opened a legal firm - there are some obvious cause-effect issues. If there is a tax on wealth, why would we expect there to be local examples of great wealth created that aren't physically extracted from the land? If a Norwegian had a great idea for a new product, presumably they wouldn't be stupid enough to hang around in Norway being taxed back into the middle class.
  - immibis 2y ago
    You can't presume that. They might quite enjoy living in Norway. More than they'd enjoy having twice the money, especially when both numbers are high enough to have anything they want.
  - para_parolu 2y ago
    Sure, but we are talking about democracy and power of majority. Majority of people may be better if there is no high wealth gaps. Future proofing of country economy is a related problem but it may be too far away.
slwvx 2y ago
It looks like the Norwegian wealth tax is for wealth above $170M, which seems pretty aggressive to me. Gabriel Zucman and others made a website [2] in 2020 aimed at the US that included a wealth tax; the lowest bracket it had was for wealth above $1M. I like wealth taxes, and prefer Zucman's model over that of Norway. Progressive income taxes and wealth taxes seem to me like great mechanisms to build a middle class and to increase social stability. I.e. stabilize the wealth and income distributions (in the statistical sense) so that they do not become bimodal. [1] https://www.lifeinnorway.net/wealth-tax/ https://www.lifeinnorway.net/wealth-tax/ [2] https://triumphofinjustice.org/ https://triumphofinjustice.org/
- cpursley 2y ago
  The problem is, ultra-rich people don't pay income taxes because they don't have incomes. And they type of income earners who earn high are often those who spend years studying for no/low pay like doctors, lawyers (yeah, yeah), local small biz owners, etc. The tax experiment I'd like to see is a very progressive sales/VAT tax that exempts certain used goods, essentials (groceries, etc) and hits luxuries, sin tax (that burden public healthcare) hard. Augmented with certain tariffs, natural resources, etc. This gives people the opportunity to "choose" their own tax rate.
  - ryandrake 2y ago
    > The tax experiment I'd like to see is a very progressive sales/VAT tax that exempts certain used goods, essentials (groceries, etc) and hits luxuries, sin tax (that burden public healthcare) hard. I'd like to see this, too, but all you'd get is companies constantly bellyaching about why is my essential product considered a luxury?? And lobbying to get them on the low tax list rather than the high tax list. Every company is going to have their little excuse about why their product isn't really a luxury.
  - inhumantsar 2y ago
    the tax experiment I'd like to see applied at scale is a Land Value Tax. for the unfamiliar, the gist is taxing the value of the land, not the improvements on it. the idea being to reduce the amount of land speculation, expands the number of homes built, and lower the cost of doing business by incentivizing land owners to use the land to its fullest productive potential. eg: replacing a single-family homes with multi-family homes, surface parking for multi-level garages, or empty lots for literally anything. add to that tax advantages for things like rewilding, below-market rentals, or other public-good use cases, and anti-nimby reforms and it could make a number of separate government programs easier to implement, if not redundant.
dgb23 2y ago
> One natural consequence of this has been that the wealthy people are simply...leaving the country. (our total / combined max wealth tax is 1.1%) I assume that was to be expected. The more interesting question would be: Is this a net gain for Norwegians?
- sieabahlpark 2y ago
  [dead]
tim333 2y ago
Not sure if any counties done this but a solution to wealth tax on startups could be if the government allowed the 1% or similar tax to be paid in equity rather than cash. The shares could then go to a sovereign wealth fund.
bko 2y ago
A lot of people think wealth is just a large Scrooge-McDuck pile of money sitting in someone's vault and a wealth tax means just sharing some of that money with others. But most wealth is owning and running extremely valuable companies. So taxing someone like Elon 2% or whatever of his 'wealth' per year, would mean some random Blackrock bozo passive investors running the companies after a few years. You're basically preventing him from owning a valuable company. Sure he's still rich, but he can't run Tesla, or any company for that matter. For someone that actually did something to create a company (replace Elon w/ Bezos, Branson, Jobs, etc), would we be better off with them running the company or a few additional 100s of millions in the coffers of a government that spends $5 trillion a year (less than one hundredths of 1 percent)?
- virtualwhys 2y ago
  Define wealth. I wouldn't confine wealth to just the billionaire class; I'd say wealth is anyone with 5 million+ USD in liquid assets (specifically, that sum of money in stocks, bonds and cash). The poorest of the poor in the United States (that have to pay tax), make around $12K per year, and pay more in tax, percentage-wise, for their work than an individual doing absolutely nothing but passively investing in the market does (10% long-term capital gains). There's zero political will to change this because, surprise, every senator, and most members of congress, would be shooting themselves in the foot if legislation to increase captial gains tax were passed. There's too much focus on billionaries -- the United States population as a whole consists of many, many individuals with absurd amounts of wealth that pay next to nothing for doing nothing. At any rate, it is what it is, the American corporate wealth machine benefits, largely, the already wealthy.
  - xur17 2y ago
    > 10% long-term capital gains That is not the long-term capital gains rate in the US.
    - virtualwhys 2y ago
      You're right, it's actually 0% with any amount invested, $100,000 or $1,000,000,000,000,000, doesn't matter, provided you don't sell more than roughly $40k, or, god forbid, generate additional income through, say, work. That flat tax rate certainly scales nicely the wealthier you happen to be, paying a max of 20% if you hold for more than a year and decide to cash in on this now several year massive run up in the markets.
WalterBright 2y ago
The WSJ has a good article today on France's experience with wealth taxes: https://www.wsj.com/articles/france-elections-wealth-tax-new-popular-front-jean-luc-melenchon-emmanuel-macron-d1b1e3c3 https://www.wsj.com/articles/france-elections-wealth-tax-new...
Justsignedup 2y ago
Yeah the problem is that europe is doing the right thing BUT the US says fuck it do what you want. So it forces europe to have to compete on the same bs market as the US.
- throwaway7ahgb 2y ago
  Or the US is smarter and realizes it's a failing policy. We can have a debate which country is more prosperous between the US and the entire EU.
  - Justsignedup 2y ago
    That's not a debate I will take, as clearly the US is richer than the EU. However... richer != better. In a similar way that a billionaire is certainly richer than half the country, but that doesn't mean its the direction we _want_.
auc 2y ago
A consumption tax can avoids some of the ills of this - it is undodgeable for the wealthy (unless they commit fraud) and it is very progressive

WalterBright 2y ago

Sweden, France, California, Washington state and NYC have discovered once again that taxing the heck out of rich people causes them to leave. And when they leave, they take their spend/invest/hire money with them.

FrustratedMonky 2y ago
Sure. If you can move to another state to live cheaper, why wouldn't people. That is the argument for a more nationally consistent tax code, so the 'rich' can't just game the system by moving to the one cheap state where they bought off the politicians. And same goes internationally, if all countries would enact laws against money laundering, or at least enforce it, then the rich wouldn't so easily move their money around. Just because they can avoid taxes doesn't mean it is the governments fault for having taxes.
- kjksf 2y ago
  Or maybe it's an argument for allowing states to try different economic strategies and compete for business based on outcomes of those strategies. If California taxes people and businesses at insane levels, maybe we shouldn't replicate insane level of taxation everywhere else in U.S., on the off chance that it is not, in fact, an optimal level for generating wealth for the people. Maybe Texas and Florida should be allowed to enact competing taxation schemes so that we can see which one is better. And maybe Americans should have a freedom of movement within U.S. without having their private property confiscated by the state when they try to leave. The justification for taxation based on residency is that you use commons like roads and school and police that the government funds so you need to contribute to funding those things. What exactly is justifications for hitting people with more taxes when they try to leave the state?
  - arrosenberg 2y ago
    > If California taxes people and businesses at insane levels, maybe we shouldn't replicate insane level of taxation everywhere else in U.S., on the off chance that it is not, in fact, an optimal level for generating wealth for the people. This is nonsense. California is the strongest state in the union economically, with one of the highest quality of life and income per capita. We have an affordability crisis that is related to the topic at hand - billionaires hoarding wealth and driving up the cost of living - but that's a national problem that California can't solve on it's own. Our taxes pay for the things that enable our success - roads, power, dams, parks, libraries, and all that other good stuff. Meanwhile Floridians can't use their beaches due to red tide and dumping tires in the water. The people of Houston JUST got their power back yesterday a week after a mere Category 1 hurricane. Maybe they should raise some taxes and do something about that so their cities stop losing economic productivity multiple times a year...
    - WalterBright 2y ago
      https://www.statsamerica.org/sip/rank_list.aspx?rank_label=pcpi1 https://www.statsamerica.org/sip/rank_list.aspx?rank_label=p...
      - arrosenberg 2y ago
        California is the 4th highest state in income per capita, which supports my statement. Thanks :)
        WalterBright 2y ago
        Its tax collections are going down despite increasing taxes. https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT3CANO https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT3CANO
        arrosenberg 2y ago
        That line is trending upward. Collections are down because the economy cooled after Q2 2022 due to the end of zero-percent interest rates. Again, something beyond the control of the state government.
pseudocomposer 2y ago
Would this not be easily solved with a one-time 50-90% wealth tax when they exfiltrate their money from the place where others earned it for them, rather than the ~1% annual wealth tax they want to leave over?
- dexterdog 2y ago
  Because most will leave as soon as the law is announced before it becomes law in that case.
  - ryandrake 2y ago
    OK, so make it retroactive on the day the law was passed. Laws are words written on paper, it's not like dark wizardry. These kinds of objections always come up. "But, rich people are oh so clever, and they will exploit loopholes in any law that gets written!" Well, write stronger laws. Don't include exceptions. Lawmakers need to think more than 5 minutes about what kinds of options/resources are available to people, and how those people might game their way into getting around the spirit of the law.
    - WalterBright 2y ago
      > OK, so make it retroactive on the day the law was passed Ex post facto laws are illegal. Even so, you might get the taxes once, before they leave. That's not a plan for a future.
      - ryandrake 2y ago
        First up, ex post facto clauses have been interpreted as applying to criminal laws only. AFAIK there exists no constitutional bar to retroactive tax legislation. The same may be true for states. And, It's not like they're all going to leave. Sure, a few grumpy ideologues like Musk will Go Galt and move away, but it's not like everyone subject to the tax is going to suddenly leave. People have been predicting the demise of California, New York, and so on forever, yet somehow, they have not all moved to Texas yet, and we still have plenty of high-earning taxpayers here. Maybe they like clean air and a functioning power grid, I don't know.
infinitezest 2y ago
There is also the upside of them taking their lobbying dollars with them.
- WalterBright 2y ago
  The USSR did not have lobbyists nor wealthy people. Didn't work out too well for the commoners.
rvrs 2y ago
Ah yes California, Washington, NYC — places where rich people famously do not live
- WalterBright 2y ago
  All have seen an exodus of rich people, mostly leaving for Texas and Florida, which are booming. Musk famously decamped from California to Texas. Bezos from Washington to Florida.
jmward01 2y ago
A statement like this probably needs a source or two to first show it is true (wealth taxes actually are causing rich people to flee) second, show that they actually do take their spend/invest/hire money with them and finally that it is harmful that that happens. Leaving creates a vacuum and if the rich really are leaving then it would be a big vacuum that clearly can't be filled with someone else that is rich since they are all leaving. Without someone big there to fill the vacuum it that implies it is being filled with a lot of smaller companies. This actually sounds like a good thing to me to tell you the truth. Can we emphasize this effect?
- WalterBright 2y ago
  Jeff Bezos famously left the state just before the Washington's new cap gains tax targeted at him was set to go into effect. I know other people with 8 figure fortunes who left, too. I didn't know it was controversial that spending a lot of money in a local economy makes it more prosperous, and when a big spender leaves, the local economy goes down. The Rust Belt is an example of the latter.
  - shakow 2y ago
    > spending a lot of money in a local economy makes it more prosperous Do these people really spend a lot of money in the local economy? Realistically, even assuming they pay a couple dozen people $100k/year for service and indulge daily in 3 $500 meals, what will be the actual influence on the local economy? > The Rust Belt is an example of the latter. The Rust Belt is an example of what happens when the state allows companies to leave, build their gadgets for a tenth of the price across the Pacific, then sell them back home without serious tariffs; not an example of what happens when Mr. Studebaker or Mrs. Bethlehem Steel leave for Florida.
    - WalterBright 2y ago
      Zillionaire Paul Allen was famous for spending billions in the local economy. He transformed Seattle. He's passed away, and his projects are being sold off and closed down. > the state allows companies to leave If you have to build a wall around your state to keep people from fleeing, you have failed.
feedforward 2y ago
The US had a tax rate of over 90% for the wealthy in the 1950s (although with loopholes they could push it lower, like now). Didn't seem to have much of an effect on the wealthy, and the US working class did very well.
- WalterBright 2y ago
  Very few paid those rates, because there were a large number of tax shelters available. For example, a lot of your personal expenses could be covered by your business. Reagan, as part of the deal to lower the top rates, traded away those tax shelters. The thing about tax shelter investing, however, is they only make sense as a tax shelter. They are poorly performing investments otherwise. A tax policy that encourages poor investments is not a good policy. Keep in mind that the government in the 50s was far, far smaller than it is today. Funding the vast growth in government is inevitably going to get sucked out of the middle class.
  - omnimus 2y ago
    > Keep in mind that the government in the 50s was far, far smaller than it is today. Funding the vast growth in government is inevitably going to get sucked out of the middle class. And where US gov grew? Army. Where that money goes? To few weapon contractors = to ultra rich. Its not like US put those investments in some other pocket than top 10%
- throwaway7ahgb 2y ago
  The old top tax rates are constantly echo'd around and not relevant towards any conversation. The only thing that matters is what the effective rate was. They could create a 100% tax bracket but if nobody paid it, it's just words in a book.
eigart 2y ago
Damned if you do, damned if you don’t. To me it looks like a race to the bottom. We have a very nice society, and most people are happy to pay taxes. We also don’t tax rich people more in relative terms, it’s just that it creates a threshold level of wealth where you can choose to move.
- RhysU 2y ago
  > most people are happy to pay taxes Source? I hate paying taxes.
  - eigart 2y ago
    No source, it’s just my impression that most Norwegians feel they get a fair deal.
  - immibis 2y ago
    If you live in America, Republicans made it as difficult as possible with the intention of you hating it. If you live in any other country, you simply get less money than you would have otherwise.
    - danpad 2y ago
      that is simply not true. Try to solve the scenario of earning 10 USD a month via YouTube monetization with your tax domicile being in the Czech Republic while being full-time employed. "Simply get less money" is a vast overstatement.
    - throwaway7ahgb 2y ago
      I lived in London and left after paying 50%+ income on taxes. I also had to get private healthcare because I couldn't wait weeks to see a doctor. So no, it's not just US Republicans, please stop.
      - danaris 2y ago
        The Tories are very similar in their outlook and practices in many ways.
carlob 2y ago
This is patently false for the only case I have data on. The wealth tax in France had quadrupled its collections in a time where the French GDP had doubled, and all this was without an exit tax. Unfortunately Macron got rid of it a few years ago and replaced it with something that only applies to real estate.
- omnimus 2y ago
  The thing is lots of the ultra rich moved to Luxemburg so this happened and this is going to keep happening. Its same why every tech company has european HQ in Ireland. If it were EU wide it might work somehow but with so many ultra rich high in politics there is no way this could happen. There is always going to be tax haven countries taking advantage of this situations. New French gov will want to reintroduce these taxes but i think they have to find different ways.
  - carlob 2y ago
    I don't think you even need the ultra rich high in politics, there is a more mundane explanation: countries are competing against one another to attract the HQs. It's a race to the bottom and it's called fiscal dumping.
- throwaway7ahgb 2y ago
  It's kind of amazing when people talk about a tax failing as a bad thing. This leads me to believe that most people want taxes on wealth for punishment and no other reason.
  - carlob 2y ago
    I want wealth taxes for redistribution mostly. So yeah.
piva00 2y ago
Sweden has a large ratio of billionaires relative to the rest of the population, and they aren't leaving. It's 14th in the world by number of billionaires, 7th per capita [0]. Rich people here pay a flat 30% tax on capital gains so they usually pay less taxes relative to their income than a salaried person earning >45-50k SEK. There's no wealth tax in Sweden. I don't think you know much about Sweden's tax system (or even in general) given this comment. [0] https://en.wikipedia.org/wiki/List_of_countries_by_number_of_billionaires https://en.wikipedia.org/wiki/List_of_countries_by_number_of...
immibis 2y ago
And what's wrong with that? Regular people, not having to compete with rich people, might actually be able to afford stuff.

FrustratedMonky 2y ago

The US had same problem with family farms. The farm itself was very valuable, so when being left to the children as inheritance, it was heavily taxed. But, this is a problem, because what is left is not enough for the kids to make a living. So in the act of trying to tax the rich with inheritance, there are some lower/middle layers getting hit very hard. Taxes don't have to be a flat number, there should be exemptions carved out like for family farms. But of course, anything can be gamed.

rahimnathwani 2y ago
What is special about family farms, that doesn't apply to other family-owned businesses?
- mickael-kerjean 2y ago
  your typical business isn't working at the same level of the maslov pyramid than a farm. I don't want a world where only the wealthy can afford to give milk to their kids
  - FrustratedMonky 2y ago
    I think because farms need to be a certain size to be effective. And, even though they might be worth a lot as real-estate, the land could be worth millions, the people farming could be poor. Guess, to your point. If a family owns a dry cleaner, similar situation.
- throwaway7ahgb 2y ago
  Because when the US was settled (not that long ago), 90%+ of people were farmers. Now the East and West coast voters see no value in these farms so want the government to tax them away. They also naively think that the local farmers market can supply the country's food supply.
Terr_ 2y ago
> The US had same problem with family farms. [...] it was heavily taxed [...] what is left is not enough for the kids to make a living Math or it didn't happen! I say that because I've seen this kind of claim many times, and usually either (A) the Federal Estate Tax has no real affect on what happens or (B) their definition of "family farm" is wildly grandiose. https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threatens-small-farms https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threa...

para_parolu 2y ago

Is it a big problem for country that wealthy people are living? I thought most country wealth comes from oil and gas. And until it’s no longer the case it somewhat makes sense to avoid large wealth gaps.

roenxi 2y ago
That argument is a bit circular. It is a bit like saying someone doesn't need to get a law degree until after they've opened a legal firm - there are some obvious cause-effect issues. If there is a tax on wealth, why would we expect there to be local examples of great wealth created that aren't physically extracted from the land? If a Norwegian had a great idea for a new product, presumably they wouldn't be stupid enough to hang around in Norway being taxed back into the middle class.
- immibis 2y ago
  You can't presume that. They might quite enjoy living in Norway. More than they'd enjoy having twice the money, especially when both numbers are high enough to have anything they want.
- para_parolu 2y ago
  Sure, but we are talking about democracy and power of majority. Majority of people may be better if there is no high wealth gaps. Future proofing of country economy is a related problem but it may be too far away.

slwvx 2y ago

It looks like the Norwegian wealth tax is for wealth above $170M, which seems pretty aggressive to me. Gabriel Zucman and others made a website [2] in 2020 aimed at the US that included a wealth tax; the lowest bracket it had was for wealth above $1M. I like wealth taxes, and prefer Zucman's model over that of Norway. Progressive income taxes and wealth taxes seem to me like great mechanisms to build a middle class and to increase social stability. I.e. stabilize the wealth and income distributions (in the statistical sense) so that they do not become bimodal. [1] https://www.lifeinnorway.net/wealth-tax/ https://www.lifeinnorway.net/wealth-tax/ [2] https://triumphofinjustice.org/ https://triumphofinjustice.org/

cpursley 2y ago
The problem is, ultra-rich people don't pay income taxes because they don't have incomes. And they type of income earners who earn high are often those who spend years studying for no/low pay like doctors, lawyers (yeah, yeah), local small biz owners, etc. The tax experiment I'd like to see is a very progressive sales/VAT tax that exempts certain used goods, essentials (groceries, etc) and hits luxuries, sin tax (that burden public healthcare) hard. Augmented with certain tariffs, natural resources, etc. This gives people the opportunity to "choose" their own tax rate.
- ryandrake 2y ago
  > The tax experiment I'd like to see is a very progressive sales/VAT tax that exempts certain used goods, essentials (groceries, etc) and hits luxuries, sin tax (that burden public healthcare) hard. I'd like to see this, too, but all you'd get is companies constantly bellyaching about why is my essential product considered a luxury?? And lobbying to get them on the low tax list rather than the high tax list. Every company is going to have their little excuse about why their product isn't really a luxury.
- inhumantsar 2y ago
  the tax experiment I'd like to see applied at scale is a Land Value Tax. for the unfamiliar, the gist is taxing the value of the land, not the improvements on it. the idea being to reduce the amount of land speculation, expands the number of homes built, and lower the cost of doing business by incentivizing land owners to use the land to its fullest productive potential. eg: replacing a single-family homes with multi-family homes, surface parking for multi-level garages, or empty lots for literally anything. add to that tax advantages for things like rewilding, below-market rentals, or other public-good use cases, and anti-nimby reforms and it could make a number of separate government programs easier to implement, if not redundant.

dgb23 2y ago

> One natural consequence of this has been that the wealthy people are simply...leaving the country. (our total / combined max wealth tax is 1.1%) I assume that was to be expected. The more interesting question would be: Is this a net gain for Norwegians?

sieabahlpark 2y ago
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tim333 2y ago

Not sure if any counties done this but a solution to wealth tax on startups could be if the government allowed the 1% or similar tax to be paid in equity rather than cash. The shares could then go to a sovereign wealth fund.

bko 2y ago

A lot of people think wealth is just a large Scrooge-McDuck pile of money sitting in someone's vault and a wealth tax means just sharing some of that money with others. But most wealth is owning and running extremely valuable companies. So taxing someone like Elon 2% or whatever of his 'wealth' per year, would mean some random Blackrock bozo passive investors running the companies after a few years. You're basically preventing him from owning a valuable company. Sure he's still rich, but he can't run Tesla, or any company for that matter. For someone that actually did something to create a company (replace Elon w/ Bezos, Branson, Jobs, etc), would we be better off with them running the company or a few additional 100s of millions in the coffers of a government that spends $5 trillion a year (less than one hundredths of 1 percent)?

virtualwhys 2y ago
Define wealth. I wouldn't confine wealth to just the billionaire class; I'd say wealth is anyone with 5 million+ USD in liquid assets (specifically, that sum of money in stocks, bonds and cash). The poorest of the poor in the United States (that have to pay tax), make around $12K per year, and pay more in tax, percentage-wise, for their work than an individual doing absolutely nothing but passively investing in the market does (10% long-term capital gains). There's zero political will to change this because, surprise, every senator, and most members of congress, would be shooting themselves in the foot if legislation to increase captial gains tax were passed. There's too much focus on billionaries -- the United States population as a whole consists of many, many individuals with absurd amounts of wealth that pay next to nothing for doing nothing. At any rate, it is what it is, the American corporate wealth machine benefits, largely, the already wealthy.
- xur17 2y ago
  > 10% long-term capital gains That is not the long-term capital gains rate in the US.
  - virtualwhys 2y ago
    You're right, it's actually 0% with any amount invested, $100,000 or $1,000,000,000,000,000, doesn't matter, provided you don't sell more than roughly $40k, or, god forbid, generate additional income through, say, work. That flat tax rate certainly scales nicely the wealthier you happen to be, paying a max of 20% if you hold for more than a year and decide to cash in on this now several year massive run up in the markets.

WalterBright 2y ago

The WSJ has a good article today on France's experience with wealth taxes: https://www.wsj.com/articles/france-elections-wealth-tax-new-popular-front-jean-luc-melenchon-emmanuel-macron-d1b1e3c3 https://www.wsj.com/articles/france-elections-wealth-tax-new...

Justsignedup 2y ago

Yeah the problem is that europe is doing the right thing BUT the US says fuck it do what you want. So it forces europe to have to compete on the same bs market as the US.

throwaway7ahgb 2y ago
Or the US is smarter and realizes it's a failing policy. We can have a debate which country is more prosperous between the US and the entire EU.
- Justsignedup 2y ago
  That's not a debate I will take, as clearly the US is richer than the EU. However... richer != better. In a similar way that a billionaire is certainly richer than half the country, but that doesn't mean its the direction we _want_.

auc 2y ago

A consumption tax can avoids some of the ills of this - it is undodgeable for the wealthy (unless they commit fraud) and it is very progressive