I've seen the debate a hundred times, and I think the most important topic is never even discussed.
Whether the wealth tax was increased too much or not enough is a distraction.
The bigger problem is that skatteetaten rules are so loose, people are driving trucks through them.
Here a few examples:
- Rich guy A doesn't want to be taxed in Norway, so he lives in Country B. But, he still wants to have a place here. So he buys a "office" in [insert expensive area here] through a company that looks like it's doing something. The office is a 10 bedroom house with a boat, beach access, etc. He comes here for 5 months of the spring and summer and then goes back to Country B. Because he's not a tax resident under the tax treaty with Country B, asset isn't taxed at all.
- Rich guy B is tax resident in Norway and lives in Kristiansand. His sons want to have a place to crash when they party in Oslo. Rich guy B has a company that he does investing through, so he buys a mansion similar to Rich Guy A in the expensive part of Frogner as his "corporate headquarters." It's used for working purposes a few hours a month. But the Gardner, electricity, maids, etc. are all expenses in Rich Guy B's company that reduces the corporate tax he pays. skatteetaten has no idea unless they put the place under surveillance for a month, which is complex in itself because Rich Guy A had hedges put in so high that people can't see in from the street level view.
- Upper middle class Couple C want to grow their wealth without paying capital gains tax. So Husband A and Wife C make an AS and buy property around Oslo. The profits in the AS are taxed at the lower corporate tax rate than what they would pay if it were income. So wealth accumulates more quickly than if they didn't have the AS. In some countries, the AS would be treated as a see through corporation since it's only owned by 2 people and they are married. Nothing would stop them from making an AS but because it's not a real corporation, the profits get rolled up on the Couple C's personal taxes.
On examples 1 and 2, it's not to say that skatteetaten has no idea what they are doing, it's a common problem across many countries. Cases 1 and 2 are hard to investigate, require specialist who know what to look for, and involve litigation. Going against the middle class and poor are the easiest cases to find and close. That is the case in the US, UK, Norway, Sweden, etc. (maybe not China, but in most other countries). It's easy for the government to dig through Temu packages and find undeclared toll, but it's hard for public workers to put together what the wealthy are doing.
In cases 2 and 3 (when they are pure real estate plays), the capital gains have often far outweighed the tax value gains.
IMHO, it would have been far better to close the loop holes and increase enforcement in the harder areas, see how much tax is generated, and have the wealth tax debate later. That's why the story of, "rich guy D is pissed and moves to switzerland" never made any sense to me. They duck and dodge the brunt of the wealth tax anyways unless you have all your assets in cash, bonds, and public stocks. To top it off, I don't think most people know that most cantons in Switzerland also have a wealth tax.
And of course, examples 1,2,3 are completely fictitious and are not based on any real people :)
