Heavily Taxed Norway, Has $1t Fund

[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.