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Norway wealth tax pushes the rich to move to Switzerland – millionaire prime minister has embarked on a push to tax the wealthiest for social justice
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- Bloomberg
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- 77 words
There needs to be a way to "capture" or heavily-disincentivize capital flight, preferably on the global level. Enough economic parlor games.
Certain assets can be taxed at source (property is the most obvious one, as you can't exactly transfer a house to another country), but I agree that it's pretty tough. One thing I think makes sense is to end double-taxation treaties with small tax havens (Switzerland does a lot of things other than tax-dodging so harder in this case) such as Bermuda, Mauritius, BVI, Cayman Islands, etc.
Can you elaborate on this?
It's hard enough negotiating this at national levels. Doing same at international levels must be even harder. And, yet, fervently agreed.
There has been great (compared to previously) progress recently. Adoption of OECD Pillar Two (15% minimum corporate income tax) is now very likely to go ahead. Hopefully Pillar One will also be adopted (which proposes than income should be taxed at source).
Start with a land value tax. Ramp it up while simultaneously lowering income taxes.
That's a Milton Friedman bit isn't it? Makes hella sense. I imagine it terrifies the wealthy.
Land Value Tax is also one of the central tenants of Georgism.
That's right, the Monopoly creator advocated for that
Such a biased way to word it.
Nobody is pushing them.
They're choosing to move their assets after having tried to sulk their way out of being taxed in their own country, and not managing to lobby/sulk/threaten to move for some time already.
The taxation would be on the highest level of wealth, in tiers just like in other countries. They won't exactly be left destitute...
Actually it kicks in at a relatively low level of wealth, less than the cost of a typical apartment. Details here: https://www.skatteetaten.no/en/rates/wealth-tax/
Ok, but a 1% tax split between the municipality and the state isn't exactly going to break the bank. Also, there's various discounts on the tax basis for various assets, including a 75% reduction on people's primary residence.
I sometimes wonder if the wealthy don't form the same emotional connections to where they live or come from to the extent that we can start calling their bluffs and be like "If you don't like it, leave and uproot your children and social network cuz money is all that matters to you and we don't want "people" like that here"
It'll probably end up failing like the French attempt at wealth taxes. Realistically, you need to at least leave the Schengen for this to have any shot of working. "Live" in Switzerland, and just, y'know, spend a lot of time touring Norway, as you have the right to do as someone in the Schengen can.
They need to increase taxes on the mega corporations while imposing strict regulations on price increases, preferably a regulation of profit altogether.
Individuals can easily move but corporations are not just going to pack things up and go elsewhere, it would be a net loss for them.
I think as Ireland has shown, corporations are willing to move if they feel it's in their financial interest. I think a regulation on how much profit they're allowed to make would certainly be sufficient to trigger flight.
That's not a problem if the void can be filled by another corporation that won't move. And if more countries adopt the policy then the corporations would be forced to stay.
Something needs to start. The current state of Capitalism is blatantly unsustainable.
Why/how would another company fill that niche? They're just opening a new headquarters in a different country. Plus, it's not like if, say, Mastercard moved you'd suddenly get a company called Bestcard taking their place.
Capitalism? Heh, this statement about sums up the current state of Capitalism. We are in such a late stage that people can't even imagine new competition sprouting up.
The entire point of Capitalism is for competition to flourish. If there's a niche market and a company suddenly decides to stop operating for whatever reason, it's not unreasonable to assume that another company would step in to take a piece of the pie, nay, guaranteed.
This wasn't my point, I was just talking about operating within the country. Plus, it should be irrelevant what country a company's HQ is in. As long as they operate within a country, they should follow that country's laws.
If you sell in the country you should follow the country's laws, period. Why is this an issue? Tax havens only work because there are no laws that close this loophole, it's not a strong argument.
We can’t imagine new competition in this scenario because one company will be limited on their total profit and the other will not.
That is an absurd advantage which you would abuse mercilessly until you’re back to the only player in the market
There are obviously workarounds to that issue. For instance, imposing a profit regulation for that specific niche market would be one way to prevent abuse. If there's a void, the government can give incentives to new companies so they can thrive.
We can't just reject every idea and do nothing about Capitalism. Sooner or later, people won't be able to even afford rent or basic living, which has already happened to a lot of people. At some point, too many people will be in this boat and things will get violent then.
I'm not, but bad ideas or ideas that don't understand the full reality of how the systems work only distract from the issues. You are not the first person to think of something like this, and it's got major flaws. Globalism especially opens the door to markets that you otherwise can't sell to.
So your country bans the product because they want to make too much on a sale, but some other country doesn't and ships globally. Are you going to make it a crime to purchase from these companies? How do you enforce and catch any of this (one of the MAJOR issues that France was told would occur, and did)? How badly can this be abused when someone like Trump/Boris/Whatever gets the wheel?
There's so many reasons why policies like this aren't tried, and it's not just because of evil corporations (although YES they have an affect). A lot of them refuse to acknowledge finical and global reality OR come with hellishly oppressive states. Singapore could probably do something like this if they wanted, but they also have a death grip on the entire country, which is not ideal if you disagree with the government in any way shape or form.
I disagree, it's already generating a discussion as evidenced by your reply. The same needs to happen in the legislature, with well-established and respected economists educating the policy makers. Gatekeeping ideas will only slow things down.
A discussion that's been had 100x? This is like saying antivax or climate change denial arguments generate good discussion on the science. It really doesn't. It mostly slows things down as you have to prove over and over again that things people think are true or should work some specific way just don't.
As for well established and respected economists, well take your pick. I'd argue it was only very recently that we really entered the dark ages of ignoring just about all economic insight (and even still I expected the current economy to be in a recession by now, so I guess kudos to the Fed and Biden's team for keeping it together this long).
The simple problem is that a lot of the solutions aren't popular or easy, and that doesn't keep you in office. Almost everyone agrees we need to do more to handle wealth inequality, but it's not a snap your fingers issue that will be solved if we just get the right person in office. Hell a lot of it probably starts with breaking monopolies as they're so so bad for just about any economic system.
Why would a corporation not move if a profit limit was implemented? That sounds like a good way to kill your economy (although I suspect the oil industry would keep Norway's economy fairly strong).
So no profit is better than some profit? That makes no sense.
Why would a company have no profit if they moved? Companies move all the time.
What exactly are you referring to? I was saying to impose a profit limit on corporations that operate within the country. If they leave, as in close their business, then they would have 0 profit from that country. Are you talking about their headquarters? Regardless, their HQ shouldn't matter, as long as they operate within the country then their profits should be regulated.
Yeah economic velocity or whatever the proper term is should be a major goal of any fiscal policy. Money sitting in banks gaining interest isn't helping anyone.
Related: Mapping the Migration of the World’s Millionaires
Countries that incentivize you to be rich will gain more of the rich. Countries that disincentivize you to be rich will gain fewer of the rich. It's sad and maybe unfair, but it is simple and true.