[jplrssn]

Not surprising that an Atlas Shrugged reading entrepreneur dislikes taxation.

But government services cost money, and by other accounts [0] Norway are doing pretty well:

Norway performs well in many dimensions of well-being relative to other countries in the Better Life Index. Norway outperforms the average in jobs, work-life balance, education, health, environmental quality, social connections, civic engagement, safety and life satisfaction.

[0] https://www.oecdbetterlifeindex.org/countries/norway/

[jjtheblunt]

Does Norway perform well in various well-being metrics essentially because Norway is extremely oil rich?

(I don't pretend to know the answer, and ask because I don't see how to figure that out)

[jplrssn]

It's a good question. If that were the case, I would have expected to also see other oil rich countries at the top of those rankings.

[thrw42A8N]

Norway is uniquely located among those, though.

[vlovich123]

It’s uniqueness is more how they manage their petrol dollars through a government investment fund rather than subsidizing government services directly or giving back the money to buy popular support like you see in Alaska.

[tharmas]

Yes, well managed indeed! Far superior to what the Canadians did with their oil wealth. The Norwegians negotiated a good price for their oil. The Canadians practically gave it away. https://thetyee.ca/Series/2012/08/01/Norway-Petro-Wealth-Ser...

[mediaman]

Yes, they're just a petrostate. Over half their economy is oil and mining.

[currymj]

they separate out oil activities in their national accounts. “Mainland Norway” GDP is also not bad compared to neighboring countries.

although it doesn’t measure indirect effects of oil wealth on other sectors. but still, “petrostate” isn’t really accurate.

[SiempreViernes]

Careful, did you pay him the three dollars it costs to quote his text?!

[Aeolun]

Anyone that gets taxed more than they have money to pay is inclined to dislike that taxation. I completely agree with the wish to not cannibalize hour company before it’s even properly profitable.

They’re ‘unrealized gains’ for a reason.

That said, I also feel there is a way to do this tax properly.

[danudey]

> They’re ‘unrealized gains’ for a reason

The bridge that governments are attempting to make is between "you can't tax me on these, they're unrealized gains!" and "I'm going to fund my billionaire lifestyle by borrowing against these unrealized gains."

Maybe tax people on those unrealized gains if they use them as collateral?

[bluefirebrand]

Maybe don't allow unrealized gains to be used as collateral for borrowing?

[voisin]

I am inclined to agree with your suggestion and agree with OP.

Mr Entrepreneur starts a business with $1,000 of his own capital and manages to grow his stake to $1,000,000. If the only way for him to use the $1,000,000 as collateral for a loan is to sell it and realize the gain, then he doesn’t need the loan anymore and a successful entrepreneur is deprived of ongoing ownership. But by allowing him to borrow on the $1,000,000 and taxing him, he is still able to maintain his share and use a portion of the loan proceeds to pay the new collateral tax. Netting less of the loan proceeds seems preferable for everyone than to force him to sell his stake.

[danudey]

Is a man not entitled to the unrealized sweat of his brow?

[cbmuser]

I have lived in Norway for a year and it’s definitely not as bright as you’re painting it.

Rent prices are extremely high and apartments are quite small compared to other European cities.

Alcohol is so expensive, that Norwegians go on alcohol shopping tours to Sweden.

Trains in Oslo don’t run 24 hours, so you have to take long detours with busses at night or pay obnoxiously high rates when taking a cab.

No, Norway is definitely not the paradise you’re trying to make it.

Also, these people that left Norway weren’t against paying taxes. They were against the socialist government trying to rip them off with a completely unfair taxation.

[jaredklewis]

He's not "painting" a picture. He's citing statistics. You've countered with an anecdote.

Of course data is not perfect, and there are often issues with methodology, data quality, or analysis the data. Even so, I usually find data more persuasive than anecdotes.

[david38]

Statistics is exactly how people paint. Surely you’ve heard “there’s, damn lies, and statistics”?

[elygre]

They left because they didn't want to pay taxes. No monkeying about, they want to be rich and tax free.

[dzhiurgis]

How do you pay taxes for something that doesn't exist with money you do not have?

[mikrl]

I think the rationale is that if you have unrealized gains, there is a high likelihood that you are well off, and can therefore be pressured into reifying your economic potential into a resource that the government can appropriate (ie money)

It’s not a straightforward tax like income tax, it’s more of a class based tax that has some aspects in common with income / CG taxes.

It makes sense when you consider that the capital owning class is and was always the most well off, even more so than aristocrats, since the Industrial Revolution anyway.

[slowmovintarget]

It makes zero sense when you consider that the stock market is how most people save for retirement.

What you're saying is people aren't allowed to save for retirement, and you have to tax them every step of the way, destroying that savings because they might be well off due to owning stocks. That's not reasonable.

[mikrl]

In Canada we have two types of nonstandard tax accounts, an RRSP and a TFSA.

The RRSP is what I think is called a 401K in the USA: you put money in pre-tax and pay income tax when you liquidate/withdraw in the future.

The TFSA you put post-tax money into and pay no tax to withdraw, including CGT, though there is a maximum capacity.

I would imagine if this tax came to Canada, RRSPs and TFSAs would be exempt from it.

My brokerage lets me open RRSP, TFSA and a standard cash/chequing to buy securities, but CGT only applies to the cash account which I don’t use as I haven’t maxed out the others. If I was maxing out the others, I’d have enough slack to do the financial dance, at least in the governments eyes…

[thrw42A8N]

What a nice way to preserve feudal classes. It'd be just terrible if someone not rich attempted startups.

[vidarh]

Having started companies in Norway without being rich at the time, it's not generally remotely a problem. The wealth tax is low, and it only kicks in over a threshold. If you can't afford to have your company pay you enough or lend you money to cover the wealth tax at the point where it starts to become a challenge, then your company is likely a shitty investment.

There can be extreme corner cases where it's a challenge, but it's extremely rare.

[mikrl]

I don’t support these kinds of taxes but I think that is also a little hyperbolic.

Poll taxes, and even flat taxes can also be seen as unjust taxes on ‘money you do not have’ when you subtract the cost of life from someone’s income.

This one is novel in the modern era because it only substantially negatively affects capital owners, rather than wage / fixed income earners.

As both capital owner and wage worker though, I just see it as yet another potential headwind… and yes, there are class dynamics at play that go beyond the economy and up into political power and the state.

[danudey]

I think the issue that these laws are trying to solve (and perhaps not with sufficient nuance) is that the ultra-rich get paid in stock or options, which then go up in value. Those "unrealized gains" aren't taxable (because they're only theoretical at this point), but they're still able to go to the banks and borrow against those gains anyway to fund their lifestyle tax-free.

Obviously you need to be a bit sane about it; I have "unrealized gains" by virtue of having stock options in a company, but while I'm paid well I'm definitely not rich by any stretch. I'm just some dude with stock.

[vidarh]

Alcohol is so expensive as a choice with broad political support in Norway. Yes, Norwegians like to whine about it, and go to Sweden or Denmark to avoid it, yet Norwegians also keep voting for the parties (almost all) that agree with keeping alcohol taxes high.

Rent is high in large parts because average incomes are high. This is one of the effects of a relatively flat income structure. As someone earning far above average, I'm better off in the UK, while someone on a job below the top ~10% or so would probably have a higher standard of living in Norway.

Not having things run 24/7 is annoying, but a factor of being a country with one of the lowest population densities in the world.

> They were against the socialist government trying to rip them off with a completely unfair taxation.

Nobody forced them to start their businesses. The wealth tax is not new, and has remained in place through both left- and right-wing governments, thought with some swings back and forth in rates.

[Aeolun]

Everyone starts a company with the idea it may never apply to them, so why worry about it before it becomes a problem.

Of course, with the leaving tax, they may just move abroad before doing anything.

[vidarh]

It was not that it didn't apply to me. I've had shareholdings in Norwegian companies worth well over the deductible several times. The point is that it isn't a problem in practice as long as you're aware of it and plan accordingly. Yes, if you start a company in Norway without a liquid market for your shares, and without understanding the tax implications, you might end up having a bad time of it. If you spend an hour talking to an accountant beforehand, it's just a minor extra cost of doing business.

E.g. at a $10m valuation you'll end up paying <$90k wealth tax after rebates. If your company is valued enough that your shares are worth $10m, you can finance a $90k loan either directly or via your company, and bake it into your funding rounds. Yes, it's an extra drag on your business, but from first-hand experience, preparing for this just isn't a big deal in most instances.

You don't have to like it, and people are free to whine about it, but in reality it's a problem only if you don't know what you're doing.

[Aeolun]

> You don't have to like it, and people are free to whine about it, but in reality it's a problem only if you don't know what you're doing.

Maybe? Or maybe it's just a PITA that most people don't want to deal with? It's not nice when you company is doing well, and your reward is having to pay a bunch of extra taxes and deal with financing all that somehow.

At least, I find paying income/value-added tax a lot more palatable, since it's always over money you just received, not money you have to conjure into existence somehow.

[vidarh]

Of course it's not fun to have to pay. At the same time the vast majority of the wealth tax is paid by a vanishingly small proportion of society that mostly pay extremely little in income tax despite being some of the richest people in the country. It's effectively largely plugging a loophole.

At the same time there is a significant social good in encouraging efficient investment of capital. If someone can't get returns sufficient that the wealth tax is nothing but a minor nuisance, it's better that capital gets distributed elsewhere.

[HPsquared]

In accounting terms I guess the tax burden just decreases the NPV of all assets.

[HarryHirsch]

Don't forget that Norway banned Life of Brian and people had to travel to Sweden to watch it.

[vidarh]

While I like to tell that story too (it was supposedly advertised in Sweden as "so funny it was banned in Norway"), it was not technically banned. It was not given a certificate, so it couldn't be shown in public cinemas, due to concern it might breach the blasphemy laws, at a point where Norway was still fairly religious.

It's also the last time that ever happened - the Heathen Society tried repeatedly to provoke the use of the blasphemy paragraph for many years until it was repealed, and kept failing. The paragraph had at that point not actually been invoked since Arnulf Øverland was acquitted in 1933 (after being charged following a speech titled "Christianity, the tenth plague" - "Kristendommen, den tiende landeplage").

[SiempreViernes]

Not even Swedes are so petty that they keep bringing that up dude. You are better of mentioning they raised the worst terrorist in the Nordics!

[HPsquared]

For a small country with that much oil money, "better than average" is a pretty low standard.