Heavily Taxed Norway, Has $1t Fund

[*TheLeonardLeap*]

Norway is one of the most heavily taxed countries on the planet with personal income tax around 55%.

Meanwhile the government has a Sovereign Wealth Fund that has reached $1t after only 20 years of existence.
http://www.businessinsider.com/norway-sovereign-wealth-fund-tops-1-trillion-2017-9

Keep in mind that Norway only has a population of 5.2m people. So while they're being taxed at one of the highest rates in the world, the Government is sitting on a fund worth $192,300 PER CITIZEN.

That means the average person could have been taxed $9,600 less per year since this fund was made, and they wouldn't have any debt from it.

Giving 55% of everything you make right off the bat in income tax, then another 7% on anything you purchase for sales tax, then add in your social security contributions (~9%), and add on a tax of your net wealth once that's all done, and it turns out you're just a serf working hard in order to make the government be able to sit on $1t after 20 years.

That's madness.

[GMDino]

From the link:

Quote:"I don't think anyone expected the fund to ever reach $1 trillion when the first transfer of oil revenue was made in May 1996," said Chief Executive Officer Yngve Slyngstad of Norges Bank Investment Management, which operates the fund.

"Reaching $1 trillion is a milestone, and the growth in the fund's market value has been stunning," he added.

http://www.huffingtonpost.com/charles-heck/we-are-all-millionaires-n_b_4906237.html

Quote:For many years the Norwegian government has allocated all of its net oil and gas revenue to the oil fund - and maintained relatively high income, consumption and gasoline taxes. Thus the government budget is not at all dependent on current petroleum revenues. In preparing the annual government budget, roughly speaking, projected non-oil revenues can fall short of projected expenditures with the gap to be filled by the average real return on the oil fund’s investments (not current petroleum revenue). When this guideline was set in 2000, the average real return was imagined as 4% of the market value of the fund. The guideline was to be interpreted flexibly, depending on economic circumstances. Given the rapid rise in the value of the fund (and lower real returns), the policy debate is tending toward a lower guideline - perhaps 3%. With an oil fund 1.5 times larger than Norway’s GDP, the 4% guideline would mean 6% of GDP!


The relative restraint of Norwegians with regard to tax reductions now means that in the future taxes will not need to rise (or other expenditures decline) as much as they otherwise would to cover pensions and other costs of an aging population, a long-term financial challenge for almost all governments in Europe and North America. To heighten recognition of this long-term benefit of the fund and protect it from raids for other purposes, its formal name was changed in 2006 to Government Pension Fund Global. This giant fiscal reserve is not earmarked for any specific obligations, but the new name highlights its imagined long-term purpose. Once again, the Norwegian government is in an astonishingly strong financial position.

The choices along the way that have brought about this very impressive collective accomplishment grow out of the functioning of Norwegian society and governance (and some good luck), but that is a story for another day.

Restraint in demanding tax reductions reflects a relatively strong sense of the importance, competence and integrity of the Norwegian government as an active instrument of the national political community, also reflected in the Norwegian government’s direct participation in oil and gas development - another story for another day.

Looks like the government and the people started looking ahead, planned accordingly, and are in good financial shape for the future.

Amazing that people could work together like that!

[*TheLeonardLeap*]

"Keep giving us more of your money than any other country in the world gets, and we we'll keep hoarding it so we won't be "forced" to take even more of your money in the future, just the current obscene amount."

I'm sure no corruption will brew there. I'm also sure the people who will die between then and there will be so happy they didn't have that extra $10k/yr in their pocket to enjoy life while they had it, and anyone barely making ends meet or living paycheck to paycheck.

They bought a $192,300 beach towel for each citizen... just in case if Norway ever becomes tropical.

[GMDino]

(09-19-2017, 03:07 PM)TheLeonardLeap Wrote: "Keep giving us more of your money than any other country in the world gets, and we we'll keep hoarding it so we won't be "forced" to take even more of your money in the future, just the current obscene amount."

I'm sure no corruption will brew there. I'm also sure the people who will die between then and there will be so happy they didn't have that extra $10k/yr in their pocket to enjoy life while they had it, and anyone barely making ends meet or living paycheck to paycheck.

They bought a $192,300 beach towel for each citizen... just in case if Norway ever becomes tropical.

What's really weird is that the people who live there like ti because they want that safety net "just n case".

https://www.usnews.com/opinion/economic-intelligence/2014/12/18/why-sweden-denmark-and-norway-have-high-taxes-and-still-show-up-to-work

But hey...who needs to worry about the future, amiright?

[GMDino]

https://www.quora.com/What-motivates-rich-people-in-Norway-to-pay-high-taxes

Quote:Since this is tagged with Bernie Sanders by the OP, I'm thinking the asker is interested in why wealthy people in Norway seem more willing to pay taxes than is the case in USA.

Norway, compared to USA is a society with much more equality. This means the poorest people in Norway are wealthy, compared to in USA, but also that we've got comparatively few ultra-rich the way they do in USA. While Americans talk about the death of the middle-class, in Norway it feels more accurate to claim that "everyone" is middle-class.

To put concrete numbers to that:

• In Norway, a average person in the upper quintile earns 3.9 times as much as a average person in the bottom quintile.
• In USA, the equivalent factor is 8.4
• If we zoom in even more, on the very poorest, the same pattern repeats but in a more extreme form. In Norway a average person in the bottom 10% of income-earners has a income that is a factor of 6.1 smaller than a average person in the top 10% of earners.
• In USA? A factor of 15.9
  

The difference between "rich" and "poor" is more than twice as big in USA as it is in Norway.

The "rich" in Norway are less rich, and the "poor" in Norway are less poor. There's less class-division, and also less class warfare and more solidarity. That's easier to maintain with more moderate income-differences; if you live in Norway, odds are that the professors children and the children of the person cleaning his office attend the same school and are invited in each-others birthday-parties.

In addition to this factor, Norwegians are more left-leaning politically than Americans are; we're more likely to see higher taxation and correspondingly more generous public services as a shared benefit, rather than as "theft" like some on the right of the American political spectrum do.

Last, but not least, even from a purely egoistical perspective, many feel that the services we've got are WORTH the taxes paid.

My family is for example a fairly typical upper-middle-class Norwegian family. We earn about $15K a month, and pay about 30% of that in income-tax; on top of that we pay VAT ranging from 0% to 25% on most of the products and services we purchase; in sum total that's expensive. But look at what we get for that:

• For each child we had (we've got 3) we got over a year of parental leave, paid at 80% our normal salary.
• Education at all levels up to and including universities is tuition free; we don't need to save a cent for College for our kids.
• High-quality childcare is subsidised, and our co-payment was $200/month for one child; less if you've got several as there's rebates, and also less if you're a low earner. For comparison, average childcare-costs in USA is $972/month.
• Universal healthcare-coverage for everyone is included in taxes paid; there is no such thing as separate healthcare-insurance that you need to purchase and pay for in addition.
• If one of our kids fall ill and one of us needs to skip work to be at home and take care of it, we can do this at full salary.
• If one of us fall ill, we can stay at home at full salary; no doctors confirmation of illness is needed for shorter ilnesses up to 3 working-days; while if you're sick for longer you need to have a doctor confirm it (in which case you can be at home ill with full salary for up to 12 months)
• Retirement-insurance, unemployment-insurance, disability-insurance and so on are also included in taxes.
  

Now, if you're REALLY wealthy, as in Trump or Gates level wealthy, then these benefits have little or no value to you. You'll probably pay extra for more luxurious options anyway, and besides, even if you DO use the public offering, you'll be paying more than it's worth given that taxes are progressive and even 1% of a hundred million dollars is a large amount.

But even if you're moderately well off; say you've got a net-worth of half a million dollars and household income well over $100K, these things still have substantial value. Do the math. Look at what you're paying for these things. Then remember to subtract that value prior to comparing Norwegian tax-levels to those in USA.

Quote:Depends on what you mean by rich people.


The really rich people (100 mill. $+) don't really pay that high taxes, because they seldomly have a lot of income. They are rich through ownership of companies and property. 

Wealth tax in Norway is not that high, still hated by the rich though. The companies are taxed 25% on their result, but there are several possibilities to hide this away. Property exists only on municipal level and is not high enough to reduce the temperature on the hot Norwegian property market.

The people who pay the famously high Norwegian taxes are the high income people. Once you hit 100 k $ per year, you pay full tax at about 40 % of your income. There is still a possibilities to get lots of different deductions, mainly the deduction of 25% of all the interest you have to pay. We have a progressive tax system in Norway, so it is a bit convoluted.

There are some rich people who haved moved to other countries to evade the Norwegian tax system. So that social unity thing isn't that ingrained in everybody.

But why do we accept to pay such a high tax?

Well, we do get quite a lot back.

Heavily subsidized kindergarten/daycare for kids from 1-6 years. This enables both parents to work, and also gives single parents the possibilty to pursue a career. Our former prime minister said enabling the women in Norway to join the workforce has given Norway more money than oil.

Education is free. I didn't pay the government a single kroner from I started school at 7 (now the kids start at 6) till i graduated with a masters degree in energy engineering.

Health care is close to free. You pay a small fee to your doctor and for medicine. But after you pay 2670 NOK (approx. 300 $), everything is free. For kids all healthcare (including dentistry) is free.

If you lose your job you have a security net and you get some of your salary from the government.

If you lose the opportunity to work because of health problems, both physical and mental, you get a government pension.

Once you retire, you get a government pension. Though this is topped up by a savings program payed for by your employer.

I could go on all day....

This is what we call a welfare system, and is why we are willing to pay high taxes.

[*TheLeonardLeap*]

(09-19-2017, 03:21 PM)GMDino Wrote: What's really weird is that the people who live there like ti because they want that safety net "just n case".

https://www.usnews.com/opinion/economic-intelligence/2014/12/18/why-sweden-denmark-and-norway-have-high-taxes-and-still-show-up-to-work

But hey...who needs to worry about the future, amiright?

What's really really weird is people who are okay giving all their hard worked for earnings to other people with the promise of "yeah, sure, this will totally be here for you when you need it" instead of wanting to make their own safety net.

Social Security is literally the same design as a Ponzi Scheme.

"Oh sure, just pay into this for 45 years and you'll have even more money saved up for retirement. Now excuse us while we take your money to pay for someone else's retirement. What'll happen to your retirement if we spend your money on other people, you ask? Oh, don't worry, we are sure the next generation after you will give us enough money to ensure you're okay. Probably. Oh, and by the way... you don't have a choice in the matter."

People go to jail for that type of shit in Wall Street.

[GMDino]

(09-19-2017, 03:50 PM)TheLeonardLeap Wrote: What's really really weird is people who are okay giving all their hard worked for earnings to other people with the promise of "yeah, sure, this will totally be here for you when you need it" instead of wanting to make their own safety net.

Social Security is literally the same design as a Ponzi Scheme.

"Oh sure, just pay into this for 45 years and you'll have even more money saved up for retirement. Now excuse us while we take your money to pay for someone else's retirement. What'll happen to your retirement if we spend your money on other people, you ask? Oh, don't worry, we are sure the next generation after you will give us enough money to ensure you're okay. Probably. Oh, and by the way... you don't have a choice in the matter."

People go to jail for that type of shit in Wall Street.

Yep.  Weird.  And they are all better off because of it.

I mean plus the strong economy and lack of a super rich class and super poor class.  It's almost like a fair and open taxation system that was approved by the citizens themselves is better way to go.  Weird.

[*michaelsean*]

(09-19-2017, 03:57 PM)GMDino Wrote: Yep.  Weird.  And they are all better off because of it.

I mean plus the strong economy and lack of a super rich class and super poor class.  It's almost like a fair and open taxation system that was approved by the citizens themselves is better way to go.  Weird.

So seriously you would be happy paying upwards of 70% of your income in taxes?

[GMDino]

(09-19-2017, 04:54 PM)michaelsean Wrote: So seriously you would be happy paying upwards of 70% of your income in taxes?

Maybe 70% isn't necessary...but a more fair/transparent tax plan?

With the same standard of living?  Free healthcare?  Free education for the kids? Why not?  Knowledge that the country can not only take care of itself and its citizens would make a higher tax rate easier to swallow.  

(And Yes, I am aware I can send the government as much money as I want.  Thanks.)

[*michaelsean*]

(09-19-2017, 04:58 PM)GMDino Wrote: Maybe 70% isn't necessary...but a more fair/transparent tax plan?

With the same standard of living?  Free healthcare?  Free education for the kids? Why not?  Knowledge that the country can not only take care of itself and its citizens would make a higher tax rate easier to swallow.  

(And Yes, I am aware I can send the government as much money as I want.  Thanks.)

To me it's just wrong at a very fundamental level.  Like in my DNA.  It's hard to explain exactly why, but it appalls me.

[GMDino]

(09-19-2017, 05:02 PM)michaelsean Wrote: To me it's just wrong at a very fundamental level.  Like in my DNA.  It's hard to explain exactly why, but it appalls me.

You might be a ruggedly individualist who wants nothing from the state or others.  

All seriousness aside I look at it as the individuals working together to benefit the whole.  But again it would have to be with the kind of transparency and efficiency shown in the OP.

[Benton]

(09-19-2017, 04:54 PM)michaelsean Wrote: So seriously you would be happy paying upwards of 70% of your income in taxes?

Depends on quality of life and ability to do business.

Right now, 35% of Americans pay virtually no taxes. No income tax, they have some form of assistance that's most likely paying any type of property or sales tax. So, when you bring in folks who pay income taxes, you've got (across the board) a rate of somewhere around 15%. Tack on sales taxes, property taxes, etc, and you're talking about an average that's probably closer to 25%. That's a rough guess, and if anyone can do better, go for it.

So, with an average total tax (everything from income to cigarettes) of about 25%, we have massive debt, unsafe infrastructure, low education numbers, poor health standards, high unemployment and increasing dissatisfaction with just about everything. Very few people are making a whole lot of money off the current system, which isn't working for anyone else.

I'm not in favor of 70% of your income going to taxes. On the other hand, I'm not in favor of 25% of my income going to taxes and it resulting in a steady decline. It also negatively impacts my ability to make that other 75% of the income, as a crappy and unhappy economy isn't good for any business.

[Bengalzona]

(09-19-2017, 05:02 PM)michaelsean Wrote: To me it's just wrong at a very fundamental level.  Like in my DNA.  It's hard to explain exactly why, but it appalls me.

Cultural difference.

You were brought up in a culture that glorifies personal wealth. Because of that, people are taught to have a basic distrust of other people (including the government) when it comes to money.

They have a society where they have greater trust in their neighbors and their government.

It works for them. They are satisfied with it, or it wouldn't exist.

It wouldn't work here because it would require a reprogramming of society. We generally prefer the way we are already programmed.

Frankly, I'm not sure why anyone here even cares. Their society, their rules. Why would this be an issue here where we are so satisfied with our culture? After all, aren't we the greatest country in the world?

[*TheLeonardLeap*]

(09-19-2017, 03:57 PM)GMDino Wrote: Yep.  Weird.  And they are all better off because of it.

I mean plus the strong economy and lack of a super rich class and super poor class.  It's almost like a fair and open taxation system that was approved by the citizens themselves is better way to go.  Weird.

Because they're a resource rich country of 5m people made almost entirely of a singular culture, with extremely little population growth, who haven't been beset by governmental corruption (yet).

They're not really applicable to a US scale, which has 325m people (we grew by 6m in the last 7 years, .8m more than Norway's total pop), an enormous array of cultures, and tons of corruption.

Things that work on small scales don't always work on large scale. Communism is one of those. You'll note that the countries that have the most success with huge social programs and such are small countries.

Meanwhile you get bigger and more corruption seeps in and you get Venezuela.

- - - - - - - - -

I'm all for fair taxation, but I don't want heavy taxation. I have the ability to make life choices for myself, and I don't want someone telling me to give them all my money so they can decide what's best for me.

If that means we seriously cut back on services, so be it. There's a lot of fat you can cut off the meat that is the US government.

[*michaelsean*]

(09-19-2017, 05:47 PM)Bengalzona Wrote: Cultural difference.

You were brought up in a culture that glorifies personal wealth. Because of that, people are taught to have a basic distrust of other people (including the government) when it comes to money.

They have a society where they have greater trust in their neighbors and their government.

It works for them. They are satisfied with it, or it wouldn't exist.

It wouldn't work here because it would require a reprogramming of society. We generally prefer the way we are already programmed.

Frankly, I'm not sure why anyone here even cares. Their society, their rules. Why would this be an issue here where we are so satisfied with our culture? After all, aren't we the greatest country in the world?

Oh I don't care that they do it. That's up to them.

[Bengalzona]

(09-19-2017, 05:55 PM)TheLeonardLeap Wrote: Things that work on small scales don't always work on large scale. Communism is one of those. You'll note that the countries that have the most success with huge social programs and such are small countries.

Like China?

[Yojimbo]

I wonder how far in first they would be if they just had lower taxes?

http://www.iflscience.com/editors-blog/the-worlds-happiest-countries-of-2017-have-been-revealed/

[StLucieBengal]

(09-19-2017, 06:24 PM)Bengalzona Wrote: Like China?

You think china is doing great?

A lot of problems.

[oncemoreuntothejimbreech]

(09-19-2017, 02:46 PM)TheLeonardLeap Wrote: Norway is one of the most heavily taxed countries on the planet with personal income tax around 55%.

Meanwhile the government has a Sovereign Wealth Fund that has reached $1t after only 20 years of existence.
http://www.businessinsider.com/norway-sovereign-wealth-fund-tops-1-trillion-2017-9

Keep in mind that Norway only has a population of 5.2m people. So while they're being taxed at one of the highest rates in the world, the Government is sitting on a fund worth $192,300 PER CITIZEN.

That means the average person could have been taxed $9,600 less per year since this fund was made, and they wouldn't have any debt from it.

Giving 55% of everything you make right off the bat in income tax, then another 7% on anything you purchase for sales tax, then add in your social security contributions (~9%), and add on a tax of your net wealth once that's all done, and it turns out you're just a serf working hard in order to make the government be able to sit on $1t after 20 years.

That's madness.

So Norway has a surplus of $192K/citizen while the US has a deficit of $154K/citizen and we're criticizing them?

Without looking. I'll bet the average American worker works more and vacations less than they do as well.

[GMDino]

(09-19-2017, 11:44 PM)Yojimbo Wrote: I wonder how far in first they would be if they just had lower taxes?

http://www.iflscience.com/editors-blog/the-worlds-happiest-countries-of-2017-have-been-revealed/

(09-20-2017, 01:51 AM)oncemoreuntothejimbreech Wrote: So Norway has a surplus of $192K/citizen while the US has a deficit of $154K/citizen and we're criticizing them?

Without looking. I'll bet the average American worker works more and vacations less than they do as well.

As someone else said: Culturally we are trained that we need to keep making more for ourselves...not to help each other.

So just seeing the tax rate will set up a tic no matter the reasons or the results.