MANAGER
The richest in the US have higher taxation than the richest in Norway, a new Statistics Norway report shows. The new government must implement promised changes, or answer for breaches of promise to reverse the development of inequality in Norway.
NEW MANDATE: Minister of Finance and SP leader Trygve Slagsvold Vedum is the one who must give the tax committee a new mandate. Photo: Terje Bendiksby / NTB
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Manager: This is an editorial from Dagbladet, and expresses the newspaper’s views. Dagbladet’s political editor is responsible for the editorial.
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We’re starting to get used to it now. Another Statistics Norway report states that the inequality is greater than the official figures have previously given the impression of, and that it is increasing more sharply.
Yet surprisingly little is happening.
Dagbladet Børsen could Thursday report on, among other things, these three main conclusions: Income inequality has increased by 36 percent more than previously thought from 2001 to 2018. Inequality in wealth also increases significantly when taking into account the market value of unlisted companies. The report also points to a very basic problem: The tax system on wage income is progressive, but for the very richest it is regressive. The richest 1 percent pay significantly lower tax as a share of income.
The report even finds that there is a higher taxation of the richest in the United States than in Norway.
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A much used The objection to such findings is that the welfare state in Norway compensates for the economic inequalities. In this report, the researchers have taken this into account. According to the researchers, inequality growth is also significantly higher even when the calculation includes the value of municipal welfare services.
What to do to rectify this? The researchers behind the report are far from giving the recipe. Much of the growth in inequality is due to the fact that the richest have the opportunity to avoid tax by placing the values in their companies.
One of the report’s authors, economics professor Magne Mogstad, is not gracious: “After all, there is little sign that politicians will do anything about the richest using their companies as money boxes without taxing the funds,” he told Dagbladet Børsen.
Instead, the political debate is characterized by how hard one should tax the middle class. The government will have higher taxes for those who earn more than 750,000, while SV will start at 600,000.
SV and Ap have wanted the changes that Mogstad is calling for, which technically means changing the shareholder model and the exemption method. The government statement from Hurdal states that the government will “study the extent of adjustments to the shareholder model and the exemption method”, and “what measures are needed to avoid such unintentional adjustments”.
This requires a stronger strategy
Statistics Norway has now delivered a solid foundation. That’s a good, first step. The next step must be for the government to make changes to the mandate of the new tax committee, which with its work will lay much of the foundation for a modernization of Norwegian tax policy.
Former Minister of Finance Jan Tore Sanner set up the committee this summer. Almost immediately, the Labor Party’s Hadia Tajik criticized the mandate for not being strong enough in terms of economic redistribution, and announced changes if a Labor-led government came to power. The government must follow up on this, and Minister of Finance Vedum is responsible. A late or lack of response will have to be interpreted as a breach of promise to do something significant against the development of inequality in Norway.
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