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Norway Isn’t Bowing to Threats of Capital Flight
Norway’s progressive lawmakers have put together a new “exit tax” that will have wealthy exiles paying a loophole-free exit levy on unrealized capital gains.
Jun 11, 2024
So you think the rich have life easy, do you? Just try telling that to the deep pockets who’ve spent tens of millions buying condos at 432 Park Avenue, the 11-year-old Manhattan luxury tower that once rated as our hemisphere’s tallest residence. Condo owners in the tower have had to put up with “faulty elevators, leaky plumbing, and noise issues.” They’re now suing the building’s operator.
Or consider the plight of those fabulously wealthy souls who’ve had to pay millions to move their mansions off the sandy coast of Nantucket, the one-time hippie refuge that’s become a summer “holiday hot spot for billionaires.” The problem? With climate change raising water levels, seaside homes on this Massachusetts island now have a nasty habit of “falling into the ocean.”
Or contemplate what life would be like if you were a person of means who fell in love with a mega-yacht the length of a football field and just had to be able to call that yacht your own. The purchase sets you back well over $100 million. But now you’ve just realized you’ll be annually paying at least 10% of that purchase price to dock and staff and fuel and insure your oh-so-cute new plaything.
The one saving grace amid challenges like these: Things could be a lot worse. You could be a rich Norwegian.
On this list of the world’s 500 richest, only one Norwegian today appears—in 374th place.
Norway’s wealthiest have faced a wealth tax ever since 1892, and, over the generations since then, no nation in the world has taken taxing wealth as seriously. But that tradition came under a direct challenge just over a decade ago, in 2013, when a new conservative government came into power. Over the next eight years, that government set about cutting Norway’s richest some slack at tax time.
This conservative government, under prime minister Erna Solberg, trimmed down Norway’s wealth tax, eliminated the nation’s levy on inheritances, and slashed the tax rate on incomes. The predictable result: Norwegians with the greatest wealth, a Statistics Norway analysis found, saw the greatest gains.
“The richest have been given 100 times more in tax cuts than the lowest-paid under Erna Solberg,” the Norwegian Labour Party’s Hadia Talik would charge. “If you want less inequality, tax policies have to be distributive. That’s the fairest way and gives a better basis for the country to create value.”
In the 2021 elections, voters would agree. The center-left government they voted into power that year moved quickly to reverse the Conservative Party’s rich-people-friendly tax cuts. By 2023, the top wealth tax rate on Norway’s largest fortunes had risen from 0.85 to 1.1%, just one of a number of moves that distinctly displeased many of Norway’s richest, among them the industrialist Kjell Inge Røkke. Midway through 2022, Røkke announced he was moving to Switzerland.
Other rich Norwegians would follow Røkke out. By 2022’s close, over 30 of Norway’s richest had departed, more wealthy emigres than Norway had seen over the previous 13 years combined. But that exodus would only strengthen the resolve of tax-the-rich progressive lawmakers.
“The wealthiest should contribute more to society,” noted Bjørnar Moxnes, the Red Party leader, “and it’s important that Norway doesn’t let itself be held hostage by billionaires who threaten capital flight.”
Norway’s richest, the finance ministry state secretary Erlend Trygve Grimstad would add, have always had to pay more in taxes to help keep the nation’s world-class public services—including free healthcare—strong and vital.
“Those who enjoy success with this social model,” Grimstad posited, “must contribute more than others.”
Other Norwegians—like the Financial Times economics commentator Martin Sandbu—would directly challenge the case against raising taxes that Norway’s tax exiles were trying to make.
These exiles, Sandbu observed, tend never to say “that they just want to pay less” at tax time. They instead pose as the “geese that lay golden eggs.” They’re only moving, these rich insist, “because the wealth tax forces them to take capital out of their companies to pay it, and that, in turn, is bad for growth, business development, and employment where their companies are based.”
But Norwegian companies, Sandbu countered, show no signs of suffering from a lack of access to capital. The capital these companies need can “come from other sources than the original owners, and it may be precisely this dilution that rankles, especially for self-made entrepreneurs or family businesses.”
Those Norwegian wealthy who feel most rankled, Norway’s current legislative majority believes, do have every right to exit the nation. But they have no right to leave with all the wealth that Norway’s commitment to economic security—for everyone—has helped those rich amass.
How to keep wealthy exiles from jetting off with wealth they should be sharing? Norway’s progressive lawmakers have put together a new “exit tax” that will have wealthy exiles paying a loophole-free exit levy on unrealized capital gains. Exiles will have the option of paying their exit tax in interest-free installments over 12 years or paying the total due, with interest, after 12 years.
These exiles will, of course, have the option of returning home to Norway anytime they’d like. And if they do return, they’ll be reentering what may be the world’s most equal nation. One telling indicator of that equality: the Bloomberg Billionaires Index. On this list of the world’s 500 richest, only one Norwegian today appears—in 374th place.
In a few years, who knows, you might not find any Norwegian on that list at all.
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Grieve Now If You Must - But Prepare for the Great Challenges Ahead
A working-class revolt has taken place, and frustration is spilling out in all sorts of directions. If Britain is to have a future, the escalating culture wars have to stop
Jun 24, 2016
Britain has voted to leave the European Union: here is a statement that continues to shock leavers and remainers alike. Earlier this month I wrote that "unless a working-class Britain that feels betrayed by the political elite can be persuaded, then Britain will vote to leave the European Union in less than two weeks". And this - perhaps the most dramatic event in Britain since the war - was, above all else, a working-class revolt. It may not have been the working-class revolt against the political establishment that many of us favoured, but it is undeniable that this result was achieved off the back of furious, alienated working-class votes.
"Many of the leavers already felt marginalised, ignored and hated. The contempt - and sometimes snobbery - now being shown about leavers on social media was already felt by these communities, and contributed to this verdict."
Britain is an intensely divided nation. Many of the communities that voted most decisively for leave were the same communities that have suffered the greatest battering under successive governments. The government's Project Fear relied on threats of economic turmoil. But these are communities that have been defined by economic turmoil and insecurity for a generation. Threats that you will lose everything mean little if you already feel you have little to lose. These threats may well have deepened the resolve of many leavers, rather than undermined it. A Conservative prime minister lined up corporate titans and the US president to warn them not to do something: they responded with the biggest up-yours in modern British history.
This was not a vote on the undeniable lack of accountability and transparency of the European Union. Above all else, it was about immigration, which has become the prism through which millions of people see everyday problems: the lack of affordable housing; the lack of secure jobs; stagnating living standards; strained public services. Young remainers living in major urban centres tend to feel limited hostility towards immigration; it could hardly be more different for older working-class leavers in many northern cities and smaller towns. Indeed, the generational gap is critical to understanding this result. The growing chasm between the generations has only been deepened.
Asking Labour voters to flock to back a flawed status quo endorsed by a Conservative prime minister was always going to be a tough ask. Most of them did, but not enough to compensate for the leave flood. And now what? Scotland has been dragged out of the EU against its will, and the demands for another independence referendum will be difficult to resist. Sinn Fein is calling for a border poll. Economic turmoil beckons: the debate is how significant and protracted it will be. A new, more rightwing Conservative administration seems inevitable: it will undoubtedly pursue a new election, hopefully when Labour is in as divided and chaotic a state as possible. Campaigns to defend threatened workers' rights and the NHS will be more important than ever. The EU will be consumed with panic about its very existence. These are inevitable political realities to confront.
"If the left has a future in Britain, it must confront its disconnect with the lives of working-class people."
As for David Cameron. He called a referendum not because he thought it was in the national interest, but because it was useful to manage internal Conservative divisions. The referendum was inevitably framed as a struggle between two Conservative factions. Ironically, Cameron winning the last election was his downfall. If he had won just a handful fewer seats and failed to secure a majority - as he expected - he may not have had to honour his referendum pledge. In a matter of months, he went from suggesting he could support British withdrawal from the EU to warning of economic Armageddon if the country did so. It looked preposterous. He spent years suggesting immigration was a huge problem that needed to be massively reduced, and failed to do so, breeding further contempt and fury.
But while much of the blame must be attributed to Cameron, far greater social forces are at play. From Donald Trump to Bernie Sanders, from Syriza in Greece to Podemos in Spain, from the Austrian far-right to the rise of the Scottish independence movement, this is an era of seething resentment against elites. That frustration is spilling out in all sorts of directions: new left movements, civic nationalism, anti-immigrant populism.
Many of the nearly half of the British people who voted remain now feel scared and angry, ready to lash out at their fellow citizens. But this will make things worse. Many of the leavers already felt marginalised, ignored and hated. The contempt - and sometimes snobbery - now being shown about leavers on social media was already felt by these communities, and contributed to this verdict. Millions of Britons feel that a metropolitan elite rules the roost which not only doesn't understand their values and lives, but actively hates them. If Britain is to have a future, this escalating culture war has to be stopped. The people of Britain have spoken. That is democracy, and we now have to make the country's verdict work.
If the left has a future in Britain, it must confront its own cultural and political disconnect with the lives and communities of working-class people. It must prepare for how it responds to a renewed offensive by an ascendant Tory right. On the continent, movements championing a more democratic and just Europe are more important than ever. None of this is easy - but it is necessary. Grieve now if you must, but prepare for the great challenges ahead.
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Don't Shut Post Offices--Reinvent Them
Feb 29, 2016
Naomi Klein delivered the following remarks in Ottawa on February 29 at the Leap Day launch of Delivering Community Power, a proposal to turn postal offices into green community hubs to power Canada's next economy. Leap Day is the official kickoff date for dozens of climate action and events already planned in Canada and worldwide, which will take place throughout February and beyond. Check out leapyear2016.org and #leapmanifesto on Twitter for more.
I'd like to begin by acknowledging that we're on the traditional territory of the Algonquin people.
I'm delighted to be here today with my colleagues from the Canadian Union of Postal Workers, Idle No More, ACORN, and the Canadian Labour Congress, brought together by our allies from Friends of Public Services.
2016 is a leap year; today, February 29th, is Leap Day. We all enjoy the extra day we add to our calendars every four years to align them with the earth's orbit around the sun.
We do this because it's easier to change our human-created systems than to change the laws of nature. In this way, the leap year is a perfect metaphor for the present moment, in which our political and economic systems badly need updating to accommodate the hard realities of our common home, the Earth.
We see the conflicts all around us. In the gap between what scientists tell us we must do to prevent catastrophic warming, and the emission reduction pledges our government has proposed. In the gap between even those inadequate pledges and the actual policies that would get us there.
We see more gaps between the promise of reconciliation with First Nations in Canada and the gross inequities facing Indigenous communities. We see more gaps still, between the values of inclusion and compassion with which so many Canadians identify--and the economic policies that continue to exile many to the margin.
The gaps are huge and they are many. Too many, in fact, to tackle slowly and one at a time. In a time of overlapping crises, we need visionary policies capable of addressing multiple failures at the same time. So, how do we make the leap?
The Proposal
We're here to launch a concrete proposal for what a post-carbon economy could look like in Canada, one that would touch every community in the country. "Delivering Community Power" lays out a vision for post offices with solar panels on the roof, electric chargers outside, and a low-emissions fleet on the roads.
But this is far from cosmetic. Services provided inside would expand to include food delivery, door-knocking on elders' homes, and perhaps most exciting, affordable banking.With this proposal, the post office once again becomes a community space, where you can come in to mail a letter or make a deposit; organize farm-to-table food delivery for your home; get advice and a loan for rooftop solar panels; invest in a community energy project; and buy products from local businesses.
We believe this is no time to further contract public services. But neither is it a moment to simply protect a static status quo.Rather, our moment calls on us to reimagine what is possible.
And we find ourselves at a critical juncture that makes this kind of visionary change both necessary and entirely possible. The Trudeau government is in the process of unleashing billions of dollars of stimulus to Canada's economy, which is suffering thanks to our ill-advised ride on the oil roller coaster.
What we are saying is that every new public dollar we spend has to do more than simply spur random economic activity. Given the pressing nature of the climate crisis, as well as the many social justice fronts on which this government has pledged to act, that money must fuel the transformation of our economy. Of our energy system. Of our public sphere so that it meets all of today's complex needs.
Canada needs more than stimulus money. We need catalyst money--investments thoughtfully designed so that they bring down emissions, while making Canada a fairer and better place to live, particularly for the most vulnerable.
Which is where today's launch comes in. Progressives often get asked: we know what you're against, what are you for? Well, this is it, or a big piece of it. We encourage everyone to take a look.
Six months ago we launched The Leap Manifesto, a bold proposal for how we can transition Canada off fossil fuels in a way that battles systemic inequalities. We called for a transition grounded in "caring for the planet and one another"--and this proposal from Canada's postal workers turns that principle into a concrete vision for how to boldly retrofit one of our most ubiquitous and beloved brick-and-mortar institutions.
Since we launched The Leap, more than 30,000 people and close to 200 organizations have endorsed the document, and today dozens of groups are hosting teach-ins, sit-ins, rallies, community events and solar installations to celebrate the Leap Year. And not just in Canada: from Zagreb to Copenhagen to the Bronx.
We all have the same message for decision-makers: small steps are not enough; it's time for a leap. So let's get to work. Thank you.
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