As proposals for a wealth tax emerge in France and elsewhere, critics point to Norway, saying its levy on the rich drove wealthy taxpayers abroad.
But although it has contributed to the mass exodus of billionaires in recent years, defenders of the Norwegian tax insist it has not put the public finances under pressure.
Norway is one of the rare European countries that still imposes such a tax, introduced in the Scandinavian country as early as the 19th century.
Taxpayers are subject to a one-per cent tax rate on their net wealth if it exceeds 1.7 million kroner (US$264,000). This increases to 1.1 per cent for anything above 20.7 million kroner.
The relatively low thresholds mean that out of 5.7 million inhabitants, some 720,000 pay the tax — “about 20 per cent of the adult population with income,” Mathilde Fasting, an economist at liberal think tank Civita, said.
These income levels distinguish it from the mooted “Zucman tax” in France — named after French economist Gabriel Zucman — which would see the ultra-rich pay a two-per cent tax on fortunes exceeding 100 million € (US$116 million).
This would affect 1,800 French taxpayers — or 0.0045 per cent of households, according to AFP’s calculations.
Critics say such measures have a disastrous economic impact.
‘Contributing to the common pot’
Norway’s Labour government says the country’s wealthiest must contribute to its generous welfare state.
“It is fair that, with my wealth, I contribute to the common pot,” said Prime Minister Jonas Gahr Store, who is himself a multimillionaire.
Like the proposed Zucman tax, the Norwegian wealth tax covers productive assets, such as business ownership.
In 2022, Norway hiked its wealth tax rate from 0.85 per cent to 1.1 per cent.
By 2024, some 300 multimillionaires and billionaires had moved from Norway to Switzerland, including Kjell Inge Rokke, one of the country’s richest men.
However, according to Floris Tobias Zoutman, an economics professor at the Norwegian School of Economics (NHH), this exodus was due to a general tightening of fiscal policy, not just the increase in the wealth tax.
At the same time, the government also raised taxes on dividends and capital gains, now subject to a rate of 37.8 per cent.
Entrepreneurs who often took out dividends or sold shares in companies to pay the wealth tax were thus doubly affected, and some chose to leave.
“To socialist politicians in Norway, entrepreneurs are mere piggy banks to be raided for ever more spending,” said startup founder Fredrik Haga in a 2024 op-ed titled “Why I left Norway.”
Bazooka shot
The wave of departures seems to have slowed significantly since the tightening in 2024 of the “exit tax” on people moving wealth outside Norway.
But some entrepreneurs now say they are considering launching their businesses in neighbouring Sweden, where the wealth tax was abolished in 2007 — at the risk of limiting innovation in Norway.
The aim of tightening the exit tax “is to corral entrepreneurs inside Norway, impeding them from heading for the exits. The inevitable result: They’ll leave even before starting their businesses,” warned Fredrik Haga.
“After shooting itself in one foot, the government is now aiming a bazooka at the other one,” he said.
Yet despite the exodus, revenues from the wealth levy are steadily increasing, thanks to the broad tax base.
The country will take in an estimated 34 billion kroner in 2025, up from 27 billion in revenues in 2022, according to Oslo’s finance ministry.
This has failed to win over critics.
“We know that people who move out over time will stop investing in Norway or turn their investments to where they live,” said Mathilde Fasting of Civita.
