Jan Petter Sissener fears flagging out of Norwegian companies and tax evasion if SV gets approval for its tax proposals.
SV leader Audun Lysbakken recently stated at the party’s national meeting that «The feast is for the rich. Lysbakken promised both an increased wealth tax and the reintroduction of the inheritance tax if SV came into government.
It makes manager and investor Jan Petter Sissener react strongly.
– In general, it is a funny statement. But it is not the case that fewer rich people give fewer poor people. No jobs have been created in the private sector in the last five to ten years. With such ill-considered proposals, it will not be the case in the future either, Sissener says to Nettavisen Økonomi.
Read also: Audun Lysbakken: – Very unfair that sky-high inheritance is taxed equal to zero
Destructive
– What is so bad about Lysbakken’s statements?
– It is destructive in at least two ways, primarily the willingness to take risks. In addition, an increased wealth tax and the reintroduction of the inheritance tax for flagging out.
– You fear a flagging out of Norwegian companies if Lysbakken and SV get what they want?
– We have already exported many great Norwegian companies. They then bring their knowledge, expertise and research center to the head office. That Orkla in its time was not allowed to buy Freia for the sake of competition with Nidar… I have never seen a dumber decision, says a resigned Sissener.
Freia ended up in the hands of American Kraft General Foods (Mondelèz International). Most of the production has now been moved out of Norway to the Baltics and Sweden. Sissener fears that the sale of all or part of businesses will be a consequence if SV succeeds.
Also read: Therefore, it is bad news to get back on the tax
Will move
– We can take my own business. It is a business that makes good money. I hope the kids do not sell a third to an outside owner when I die. In that case, it forces me to move to a country in Europe that does not have this tax, says the manager.
– Yes, what will an inheritance tax mean for your own company?
Lysbakken has to answer that. But he should realize that the cost of capital is an extremely important parameter in an increasingly competitive world. The proposed taxes will further inflict a competitive handicap on Norwegian companies.
SV will increase the rate on wealth tax to 1.1 per cent and in addition introduce an additional rate of 0.2 per cent on wealth over NOK 20 million. The limit for married couples should be 40 million. Furthermore, the party will remove the share discount, which for 2021 is 45 percent.
Sky high
With regard to inheritance tax, SV’s proposal will have a bottom deduction of NOK 5 million. The rate is 30 percent up to 100 million, while the rate on inheritance over 100 million kroner is as much as 70 percent.
If you inherit 50 million, you have to pay 13.5 million in inheritance tax with SV’s scheme. If you inherit NOK 200 million, you have to shell out as much as NOK 98.5 million.
Below we have set up a table for what rich heirs must pay out if SV had got its way. Really rich heirs thus risk a billion bucks.
According to Sissener, if you have to take out dividends or sell shares, it is not even enough to sell the entire business. Effective tax will be over 100 percent after 32 percent dividend / gain tax.
– I think fortunately the Labor Party is more sober than this. Should there be a chance that this will be introduced, just order a moving car, Sissener comments on the calculation.
Bakstreversk
Sissener says everyone wants to get richer and reach the middle class, everyone wants a better standard of living for their country and their population.
– We need incentives to invest in new capital and new technology. Increasing wealth tax and inheritance tax is completely backwards. Yes, I fear that if this becomes a reality, one will have to sell out or move the business abroad.
– Which is worse, the wealth tax or the inheritance tax?
– The inheritance tax is destructive, but if I have to choose, I would rather take a moderate inheritance tax. It does not have to be a tax for businesses, but perhaps an inheritance tax for extravagant cottages or houses. And then there is inheritance tax in many countries, Sissener admits.
Special scheme
Properly enough, a special scheme will be introduced for family businesses, where you can get an interest-free deferred payment.
The tax can be paid in with equal amounts over ten years. But the person or persons who inherit a family business worth NOK 200 million still have to pay just over NOK 8 million a year. It is fast eight to ten times a manager’s salary in the family businesses.
– Do you think Lysbakken understands the practical consequences of how the inheritance tax is to be paid?
– No, and if you take it out in the form of dividends or sell shares, there will be 47 percent extra in tax. Neither the heirs nor the heirs can lose the equity in the business for such large amounts.
The online newspaper has offered SV to respond to Sissen’s allegations of tax evasion and flagging out, without receiving a response.
Read also: Støre placed everything in the bank – has missed tens of millions
Marginal
– A reintroduction of the inheritance tax and increased wealth tax is justified by rejecting the differences in Norway?
– In that case, it will be completely marginal. It makes virtually no people less poor. We have a state budget of NOK 1,450 billion, and through the wealth tax we collect approx. 14 billion. Even if it increases by 50 per cent, it is equivalent to only NOK 7 billion, less than half a per cent of the current state budget.
– It is 15 percent of what we distribute in development assistance, there will be no money to spend. Who will be less poor, and how will this be distributed among the poor, will free sports equipment be distributed? Sissener asks rhetorically.
He thinks there is only one way to go: to get people into work so it pays off for tax purposes.
Provoked
– I am provoked that the only thing the politicians focus on is how to tax more and spend more money. Nobody talks about how the values should be created, and this also applies to the politicians on the right.
– I would rather the politicians focused on how Norway should make money from lasting industrial companies and businesses, rather than taxing more.
Sissener believes we must ask ourselves what should be the competition parameters in Norway, what competitive advantages do we have. Otherwise it goes «to the forest».
– We are not centrally located in the markets we serve, we do not produce cheaper than others, we do not work more or earn less, and we do not have a better tax system, he says.
Impossible
Sissener is also concerned that those who talk about shutting down the oil industry to reduce oil dependence. He believes they have no idea how we are going to replace this revenue.
– The oil industry pays in approx. NOK 270 billion in tax a year, while all other businesses account for about NOK 75 billion. We are talking about 330,000 companies.
– They will thus cut 80 percent of the tax revenue, but they are not possible to replace. In that case, we must almost quadruple the tax revenues from today’s other businesses. There should be a focus on SV and much more important than being able to go for free in the public toilets, says Sissener, referring to the decision at the most recent national meeting.
Read also: So many have opted out of SV in the last week
Flirting
– Are you now putting your hopes in the Labor Party in a red-green government?
– I place my hope that the Labor Party is more intelligent and more moderate. Their old slogan that “do your duty, demand your right”, is a sensible mantra. I also hope for Norway that Erna Solberg and Trygve Slagsvold Vedum start flirting a bit.
– Yes, the farmers are not happy about the inheritance tax, many of the farms are inherited, right?
– The farmers are lucky to have deflated values. But we can imagine a nice farm that you live off, but where you have to sell 30 percent of the farm to the rich neighbor to be able to afford the inheritance tax.
Broilers
– Do Norwegian politicians show signs of not having been in business?
– There are very few, if any politicians, who have had a working life outside politics, especially in competitive industries. In part, these are broilers from the youth party who have never earned a penny, and it does not matter which party they come from.
– The gang there has almost never worked outside of politics. And then it’s a little captivating that it’s mostly youth politicians and younger politicians who always complain about the wrong things we have done. Well, well, we leave a fortune of 11,000 billion kroner, Sissener answers, with reference to the Petroleum Fund.
He believes that Erna Solberg does not “have a better track record” than the politicians on the red-green side.
– No, during her reign we have had an explosion in public spending. And we have not had better public services, quite the contrary.
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