From: lessgovt@gmail.com   
      
   Norway Provides a Stark Reminder of the Wealth Tax's Folly   
   By Andrew Wilford, June 15, 2023, Real Clear Markets   
      
   It’s become fashionable in progressive circles to kick around various   
   versions of a wealth tax. From the comprehensive wealth taxes proposed by   
   Elizabeth Warren and Bernie Sanders to proposed taxes on various forms of   
   wealth like mark-to-market capital    
   gains taxes and “billionaire’s taxes,” wealth taxes are fast becoming   
   the left’s white whale of tax policy. But in their single-minded pursuit,   
   progressives have often ignored wealth taxes’ potential to sink the boat.   
      
   A recent report on Norway’s experience with its own wealth tax found that   
   ever-increasing taxes on the wealthy have consequences. In the wake of a   
   recent increase in Norway’s wealth tax rate up to a maximum of 1.3%, the   
   country lost 30 billionaires    
   and multimillionaires, more than had fled the country in the previous 13   
   years. This includes the highest-taxed Norwegian last year.    
      
   If a 1.3% tax rate does not sound very high, remember that wealth tax rates   
   are not comparable to taxes that Americans are used to paying, as they target   
   the entirety of an individual’s wealth rather than just a subset.    
      
   For example, imagine you hold shares of a Dow Jones index fund. Since a year   
   ago, those shares have appreciated by about 1.45 percent. If you had to pay a   
   1.3% wealth tax rate on a 1.45% capital gain, it would be equivalent to about   
   a 90% capital gains    
   tax rate.    
      
   Even that makes the picture a bit rosier than it is, as not all components of   
   an individual’s wealth gain value in a given year. Wealth taxes are   
   indifferent to that fact, meaning that taxpayers can be left in situations   
   where they are forced to pay    
   taxes on assets that saw a negative return in that year.   
      
   One other aspect of Norway’s wealth tax that its American admirers often   
   fail to mention is who pays it. Norway’s wealth tax targets all single   
   Norwegians with a net worth of about $150,000, or married Norwegians with a   
   net worth of around $300,000.    
   If a similar wealth tax were implemented in the United States, just owning a   
   substantial portion of home equity would be enough to push a taxpayer into the   
   wealth tax bracket. That’s a middle-class tax, not one targeted at the   
   ultra-wealthy.   
      
   Even so, Norway derives a relatively small amount of tax revenue from its   
   wealth tax, just around 1 percent of total revenue. That’s in part because   
   Norwegians keep fleeing it, but far more because wealth taxes are notoriously   
   difficult to administer    
   and enforce. Combatting wealth tax avoidance requires armies of expensive tax   
   enforcement agents, and valuing non-liquid assets is notoriously difficult.    
      
   Rather than raking in vast sums of tax revenue, European countries like Norway   
   have often found that they end up bogged down in endless legal battles over   
   asset valuation or with their citizens running for the hills. It’s for this   
   reason that most of    
   the rest of the developed world has been moving away from wealth taxes, not   
   towards them.   
      
   The U.S. should learn from Norway’s mistakes, not seek to repeat them.   
   Wealth taxes are economically harmful, nearly impossible to effectively   
   administer, and often don’t even end up raising the promised revenue.   
   They’re best left in Europe.   
      
   Andrew Wilford is a policy analyst with the National Taxpayers Union   
   Foundation, a nonprofit dedicated to tax policy research and education at all   
   levels of government.    
      
   https://www.realclearmarkets.com/articles/2023/06/15/norway_prov   
   des_a_stark_reminder_of_the_wealth_taxs_folly_940719.html   
      
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