5 ms·

The thing about the Nordics is that you can not consume that wealth personally without being heavily taxed - when it is tied up in company assets.

fakedang 1y ago
Not to mention, flaunting wealth by conspicuous consumption also comes with its own kind of social stigma, even in upper class circles.
- emptysongglass 1y ago
  Doesn't mean it isn't done. The Lego family was caught flying their private jet all over the world so they sold it and now have exclusive renting rights to a plane in a hangar operated by another company.
  - ahoka 1y ago
    Yes, everything is about the looks in Scandinavia.
  - tossandthrow 1y ago
    There is a strict separation between business and personal consumption. If the Lego family uses business jets to go on vacation, then they need to 1) pay market rate for using the jets and 2) pay full income taxes, VAT etc. Anyhow, when you are rich enough this tripling in cost does not really matter - but it does reflect in the income equality statistics.
geysersam 1y ago
Not sure that's true. How do you even "consume" wealth, assuming the wealth is more significant than a few millions in the bank. Nordic countries have high VAT but that's hardly going to hurt you.. On the other hand Sweden has less property tax than the US. I guess if you consume services then that will be more expensive in the Nordics, since tax on salaries is high.
- flakeoil 1y ago
  I suppose the person means that you have to pay about 50% in taxes to take out the capital/profit from the company before you can use it as a private person.
  - Y-bar 1y ago
    Dividend and capital gains taxes are a flat 30% (https://en.wikipedia.org/wiki/Taxation_in_Sweden#Corporate_and_capital_gains_tax https://en.wikipedia.org/wiki/Taxation_in_Sweden#Corporate_a...)
    - pavlov 1y ago
      In Finland the tax treatment for dividends is even friendlier. If you have a 1.5M balance sheet, you can pay yourself 120k euros in dividends annually at an effective tax rate of only 7.5%. Let’s just say that small businesses and professionals have very good lobbyists. An employee making 120k / year pays over 40% tax. This creates a tremendous incentive for professionals to incorporate and use every trick in the books to build up a larger balance sheet on paper.
      - hrududuu 1y ago
        This type of comparison needs to add corporate income tax (20%) in order to be an apples to apples comparison,so 27.5. It's still a stark difference in taxation, and I know of no other country that does what Finland does for dividend taxation. In fact for earned income,things look even uglier when you add in tax-like social security contributions. Perhaps not coincidentally, Finnish companies are also an outlier in paying extremely high dividends.
    - olejorgenb 1y ago
      In Norway it's 37.8%. Though you do get "skjermingsrente" (about the same rate as the central bank rate) on the amount you originally invested (ie.: not on any untaxed gains you've had).

fakedang 1y ago

Not to mention, flaunting wealth by conspicuous consumption also comes with its own kind of social stigma, even in upper class circles.

emptysongglass 1y ago
Doesn't mean it isn't done. The Lego family was caught flying their private jet all over the world so they sold it and now have exclusive renting rights to a plane in a hangar operated by another company.
- ahoka 1y ago
  Yes, everything is about the looks in Scandinavia.
- tossandthrow 1y ago
  There is a strict separation between business and personal consumption. If the Lego family uses business jets to go on vacation, then they need to 1) pay market rate for using the jets and 2) pay full income taxes, VAT etc. Anyhow, when you are rich enough this tripling in cost does not really matter - but it does reflect in the income equality statistics.

geysersam 1y ago

Not sure that's true. How do you even "consume" wealth, assuming the wealth is more significant than a few millions in the bank. Nordic countries have high VAT but that's hardly going to hurt you.. On the other hand Sweden has less property tax than the US. I guess if you consume services then that will be more expensive in the Nordics, since tax on salaries is high.

flakeoil 1y ago
I suppose the person means that you have to pay about 50% in taxes to take out the capital/profit from the company before you can use it as a private person.
- Y-bar 1y ago
  Dividend and capital gains taxes are a flat 30% (https://en.wikipedia.org/wiki/Taxation_in_Sweden#Corporate_and_capital_gains_tax https://en.wikipedia.org/wiki/Taxation_in_Sweden#Corporate_a...)
  - pavlov 1y ago
    In Finland the tax treatment for dividends is even friendlier. If you have a 1.5M balance sheet, you can pay yourself 120k euros in dividends annually at an effective tax rate of only 7.5%. Let’s just say that small businesses and professionals have very good lobbyists. An employee making 120k / year pays over 40% tax. This creates a tremendous incentive for professionals to incorporate and use every trick in the books to build up a larger balance sheet on paper.
    - hrududuu 1y ago
      This type of comparison needs to add corporate income tax (20%) in order to be an apples to apples comparison,so 27.5. It's still a stark difference in taxation, and I know of no other country that does what Finland does for dividend taxation. In fact for earned income,things look even uglier when you add in tax-like social security contributions. Perhaps not coincidentally, Finnish companies are also an outlier in paying extremely high dividends.
  - olejorgenb 1y ago
    In Norway it's 37.8%. Though you do get "skjermingsrente" (about the same rate as the central bank rate) on the amount you originally invested (ie.: not on any untaxed gains you've had).