Oh the woes of those poor, hunted billionares...

[Louis VI the Fat]

Tax refugees are paupers who can't afford to live in a civilized country.


I do want to close the loopholes within the civilized world. Monaco, Switzerland, Ireland, all those little islands of dubious sovereignity. I say we force them closed, and force the tax refugees into the jungle. Force 'em to try Colombia and the Congo, let 'em find out how well protected their wealth is in countries without stable governments and the rule of law - you know, all that 'wasteful nonsense' that civilized people pay top tax dollars for.

[Centurion1]

Actually it would probably be pretty safe. a billionaire could most likely buy the congo. And therefore buy all the guns

[A Terribly Harmful Name]

Why do people have to assume that billionaires are inherently evil and selfish due to some weird and mysterious twist? So is everyone, the difference being that millionaires have money to indulge in their excentricities. Take Berlusconi... Who the hell wouldn't want to live that kind of morally reproachable but pleasant lifestyle? Of course, most of us don't have the money for high class whores and security guards, so we spend our nights watching porn instead or doing it with the girl next door.

[Sigurd]

This is only saber rattling by Hagen.
He is a known "right" man and there is an election soon.

What he is protesting against is our assets tax (fortune tax) which very few of our neighboring countries have.
If you have assets - that is, what you own of value minus debt is taxable. Let's say you own a house, a car, a boat and some stocks. You have a mortgage on the house but you have done well and your other assets have no debt.

If your house is worth 4 500 000 (which is not too uncommon for new houses) and you have about 2 000 000 on the mortgage. Mortgage is good to have when it comes to paying taxes
You have been working the stock marked and had some luck.
Let's say you currently have stocks worth 5 000 000
You have used profits made earlier to buy two nice cars, expensive furniture and a sail boat.

Let's see: (in NoK - 100 000 would be US$ 16 000 and € 12 000)

House - 4 500 000
Cash - (money in the bank) 100 000
Stocks - 5 000 000
Car1(Volvo V70) - 500 000
Car2(BMW M5) - 1 300 000
assets (furniture etc.) - 2 000 000
Sailboat - 3 000 000

From this the taxable amounts would be

House - 1 237 500
Cash - 97 000
Stock - 5 000 000
Car1 - 325 000
Car2 - 845 000
Assets - 320 000
Sailboat - 2 250 000

Total (gross fortune) - 10 074 500
minus debt - 2 000 000

tax assessment = 8 074 500

Tax free : 350 000
taxed by 0.9 percent : 190 000
taxed by 1.1 percent : 7 534 500

Tax = 84 590

So in addition to paying taxes on everything I earn (30%) and everything i buy (25%), I have to pay taxes for what I own.
That is OK you say since I earn like 840 000 NoK a year (before tax) and have the cash flow.
but I have to tithe annually to the state because I happen to have been lucky at the stocks. Mind you the stock value is not realized and could swing either way.

What about people like Hagen who has stock values in the billions? Do you think he can pay this stock from what he takes out in cash? Nope.. he is forced to realize stock (by selling) or take up loans to to pay this tax.
Unfair ??

What about the poor old woman in the house she and her now diseased husband have fought and payed for in a life time and finally in the last decade paid out all mortgage?
She sits on a minimum pension, but have a house worth quite a bit due to the crazy real estate marked.
She does not understand why she needs to pay half her income to a "fortune tax". She does not sit on a fortune, she thinks. She sits in the old chair that she has always sat in.

[Husar]

That, my dear Sigurd, shines a completely different light on the situation and is absolutely not what HoreTore was talking about (income tax). If that's the case in Norway then I can understand the guy, sounds like a horrible tax.

Thanks for clarifying this.

[Fragony]

Horetore has been naughty

for shame

[HoreTore]

That, my dear Sigurd, shines a completely different light on the situation and is absolutely not what HoreTore was talking about (income tax). If that's the case in Norway then I can understand the guy, sounds like a horrible tax.

Thanks for clarifying this.

Nonsense! I wasn't talking about income tax really, but I was talking about how much he should pay according to his income(28%). As you can plainly see, even with this tax, he only pays a few percent of his income in taxes.

The asset tax is there simply because the wealthiest people do not pay income tax at all. If that tax was to go away, people like Stein Erik Hagen wouldn't pay any taxes at all.

I see no problems with the tax as applied in this case.

With regards to the pensioners Sigurd talked about though, the situation is different. But it does need some clarification; that pensioner isn't paying any rent, while a pensioner without a house does... Also, I fully support taxing real estate. Why? Because of the financial crisis. Real estate isn't taxed now.. That means that buying real estate is(was...) the most profitable thing to sink your money in. A house isn't just something you live in anymore, it's an investment. As a result, people with money started buying up tons of houses, thus driving the price of real estate through the roof, well beyond the real value of the houses, making a nice, shiny bubble.

I would also support an exception to the asset tax for businesses, allowing them to create "rainy day funds", modeled similar to the BSU-accounts. But then again, as businesses these days are based on credits and debt, it's unlikely to be that big a deal....

What about people like Hagen who has stock values in the billions? Do you think he can pay this stock from what he takes out in cash? Nope.. he is forced to realize stock (by selling) or take up loans to to pay this tax.
Unfair ??

This is nonsense, Sigurd, and you know it. He paid 10 million in total in taxes(most of it is likely asset tax). You know just as well as I do that his income is far, far greater than that. He doesn't have to realize any stock at all, all he needs to do is take out some extra "utbytte"(translation please...) from his company(ies). And as "utbytte" is his income, well, then the situation is exactly the same as for us who are paid the normal way.

[a completely inoffensive name]

I am having a bit of trouble following the math you did there, (probably because I am staying up way too long) but if it is what it sounds like, then that's a very unfair tax and I could understand the guy's protest.

[a completely inoffensive name]

My handy translator translates "utbytte" as dividend.

[HoreTore]

I am having a bit of trouble following the math you did there, (probably because I am staying up way too long) but if it is what it sounds like, then that's a very unfair tax and I could understand the guy's protest.

So you would prefer that he didn't pay tax at all?

Please tell me, why on earth should a guy with billions not have to pay tax?

My handy translator translates "utbytte" as dividend.

Yeah, I think that's the term...

[a completely inoffensive name]

So you would prefer that he didn't pay tax at all?

Please tell me, why on earth should a guy with billions not have to pay tax?



Yeah, I think that's the term...

Well, first I would like to know (being serious here) why exactly he must pay more taxes because he has more money. I never got that concept.

And you are welcome.

[HoreTore]

Well, first I would like to know (being serious here) why exactly he must pay more taxes because he has more money. I never got that concept.

More taxes? I would be thrilled if he paid his 28%, the same I do. Why should he pay 28%? Because we are all equal before the law. He should not get special treatment from the authorities because he's rich. It's a question of morality. Why should I have to pay tax when a guy worth 8 billion doesn't have to? I have to pay my taxes, and so should he.

But you believe that the asset tax should go away, that would mean that he doesn't pay tax at all. Why do you believe that because he has more money he shouldn't pay any taxes?

[a completely inoffensive name]

More taxes? I would be thrilled if he paid his 28%, the same I do. Why should he pay 28%? Because we are all equal before the law. He should not get special treatment from the authorities because he's rich. It's a question of morality. Why should I have to pay tax when a guy worth 8 billion doesn't have to? I have to pay my taxes, and so should he.

But you believe that the asset tax should go away, that would mean that he doesn't pay tax at all. Why do you believe that because he has more money he shouldn't pay any taxes?

Let's set the record straight here before you accuse me of saying things I didn't.

1. I didn't say I wanted him to pay no taxes. I thought you said he paid 10 million in 2007.
2. Throughout this conversation you have made the assumption that his actual income is not in the tens of millions but in the hundreds of millions. You claim it as fact although we have no way of knowing since you do not have proof of this.

Now you look at it as fair if everyone pays the same percentage of their income. I see this 28% being used throughout this conversation. However, I am looking at it this way: even when he pays 5% of his income that's 10 million going to the state. Now I don't know how much you make, and I am not going to guess but I think I can safely assume that 10 million is way, way more then you probably give to the state in even 5 years with your 28% unless I have severely misjudged your wealth.

Now morality is all well and good and here is this guy who is already doing more to prop up the state then many people ever could through their whole lives in just one year. I seem to recall that you made a post a while back complaining of a party that wanted to squander the countries savings. You claim in it that Norway has saved up about 5 national budgets. I will get back to this a little later.

Let's look at this from the eyes of the rich guy for a moment. And let us take a deep breath and realize that it does not matter how much money or power a man has, he is just that. A man. No different then you or me, just in a different circumstance.

He knows that Norway has plenty of money saved up. 5 national budgets is a lot of money in the treasury. He knows that he probably contributes in one year more then most do in their entire life. Most people in this position except the extremely ideological, would resent such tax increases because from their point of view they already do more to help with less (percentage) then those who are not so rich with higher taxes. It would seem unnecessary to him, especially if the government is continuing to grow their saving with a surplus budget every year, then it would seem even more unnecessary except solely for the ability of politicians to praise themselves on another record surplus year to gain favor with the public.

So here we have your morality question.

You think that he is not putting in his fair share because the percentages don't match up and that he is a bad person for leaving the country without paying what you believe he should pay.

I am looking deeper at the raw numbers and am judging his actions on the motivations behind his leaving the country and maybe because I don't automatically judge someone negatively due to extreme wealth I can see maybe where exactly he is coming from and I can actually sympathize with him in this case. What is the purpose of taxing him higher besides the government being able to write down a larger number of surplus money this year?

If Norway had debt or has a deficit budget running that needs to be fixed then yes, this guy has the responsibility to help the country in which he resides by contributing more. But since Norway does not seem to have debt problems and since it seems to be able to contribute more to its savings each year indicating a budget surplus then raising taxes on the guy seems just greedy and greed is not very moral.

Now I must be going to bed. I will eagerly read your (hopefully civil) reply when I wake up.

[Sigurd]

Utbytte would be profit in english.

If this guy is a billionaire then 1.1 percent (lets say 1.0 for easy calculation) of 1 biliion would be 10 million.
If he has 3 billions then he pays 30 million just in fortune tax (let's call a spade a spade).

In 2007 Stein Erik Hagen had a 24 Billion fortune. He should have paid 240 million in fortune tax alone. And that is if he did not realize any of this in hard cash (Income). When he sells stock he needs to pay tax from it (28%). But if he has huge loans - this gets greatly reduced. Note that this affects fortune tax as well.

Thanks to my mortgage and the high interest rates, I only paid 18% tax last year and didn't have to pay outstanding tax (restskatt).

You can take out some stock (by selling) one year and keep it all in stock next year. For guys like Hagen, that would be zero income that particular year. If you take out 100 million, that would last a while, even for guys like Hagen.

[Sigurd]

double post...

Just one more thing. If for example the interest rates rises to a level where it no longer profits you, and if you have assets, you could reduce your loan by paying back parts or the whole loan.
I don't think you have to pay interests on such out-of-schedule paybacks. You pay a set amount of interests once a month based on how much loan you have had the previous or current month (I forget the details).
If Hagen because of the high interests we just have had, returned much of what he had loaned, he would be in peril with regards to the fortune tax. It could be that he was much in debt in 2007, but found out he would reduce this in the economical hardships we have had. He is now irritated because he needs to fork out because of this stupid, special for Norway "fortune" tax.

[Andres]

I don't think you have to pay interests on such out-of-schedule paybacks. You pay a set amount of interests once a month based on how much loan you have had the previous or current month (I forget the details).

Slightly off topic, but maybe good to know.

Could be different abroad, of course, but in Belgium, paying capital back earlier (out of schedule) is considered a breach of contract and you'll generally have to pay 3 months of interest on the amount paid back earlier as compensation. The damage for the bank is that it loses part of the profit of its' investment (Yes, a loan to you is an investment for the bank, and they make profit out of it; generally, you have to pay more interest than the bank has to pay on that amount - when interest rates are low, try to get a loan on an interest rate that's fixed for the entire duration of the loan). Also in Belgium, you don't get tax benefits for the amount you pay back out-of-schedule. Before you'd consider doing such a payback, you'd first have to make some caculations to see if it's profitable or not.

[Idaho]

Well, first I would like to know (being serious here) why exactly he must pay more taxes because he has more money. I never got that concept.

And you are welcome.

The notion that taxes are a proportion of your income/wealth is as old as taxes themselves. It's interesting to question the notion - but I think we'd live in a strange and radically different world if we did all pay a poll tax.

[HoreTore]

Let's set the record straight here before you accuse me of saying things I didn't.

1. I didn't say I wanted him to pay no taxes. I thought you said he paid 10 million in 2007.
2. Throughout this conversation you have made the assumption that his actual income is not in the tens of millions but in the hundreds of millions. You claim it as fact although we have no way of knowing since you do not have proof of this.

1. Those 10 million is what he paid in asset tax, as asset tax is basically all he pays. If you cut the asset tax, he pays nothing. Simple.
2. No proof? His reported income is just over 8 million in 2007. But, take a look through what he spends, and you'll soon enough find out that his real income must be in the hundreds of millions. Heck, he bought his new palace(worth over 100 mill) in 2007. And then there's that army of servants he employs... And his wife always seems to have new jewels... It should be quite obvious that the guy earns a few hundred million a year.

Utbytte would be profit in english.

If this guy is a billionaire then 1.1 percent (lets say 1.0 for easy calculation) of 1 biliion would be 10 million.
If he has 3 billions then he pays 30 million just in fortune tax (let's call a spade a spade).

In 2007 Stein Erik Hagen had a 24 Billion fortune. He should have paid 240 million in fortune tax alone. And that is if he did not realize any of this in hard cash (Income). When he sells stock he needs to pay tax from it (28%). But if he has huge loans - this gets greatly reduced. Note that this affects fortune tax as well.

Thanks to my mortgage and the high interest rates, I only paid 18% tax last year and didn't have to pay outstanding tax (restskatt).

You can take out some stock (by selling) one year and keep it all in stock next year. For guys like Hagen, that would be zero income that particular year. If you take out 100 million, that would last a while, even for guys like Hagen.

Take a look at the tax list again, Sigurd. His taxable fortune is just over a billion. Fits in quite neatly with 10 million in taxes, doesn't it?

And yes, it's the loans and tricky stock loopholes he uses to make his income disappear.

Edit: and you're sure his fortune was 24 billion? Sure that isn't his family's fortune? I thought he split it up among his kids a couple of years ago...

[Sigurd]

Slightly off topic, but maybe good to know.

Could be different abroad, of course, but in Belgium, paying capital back earlier (out of schedule) is considered a breach of contract and you'll generally have to pay 3 months of interest on the amount paid back earlier as compensation. The damage for the bank is that it loses part of the profit of its' investment (Yes, a loan to you is an investment for the bank, and they make profit out of it; generally, you have to pay more interest than the bank has to pay on that amount - when interest rates are low, try to get a loan on an interest rate that's fixed for the entire duration of the loan). Also in Belgium, you don't get tax benefits for the amount you pay back out-of-schedule. Before you'd consider doing such a payback, you'd first have to make some calculations to see if it's profitable or not.

We are sooo off topic here, but I would like to add this anyway:
I just checked the law concerning finances.

Apparently in Norway there is a slight difference between a floating interest rate loan and a fixed interest rate loan.

As a debtor to a loan with a floating interest rate, I have the right to pay back part or the whole thing before the agreed payback time.
Additionally the bank can't demand more interests than the used credit time. But they can demand a compensation in a form of a fee, which is limited to the cost of administrating the liquidation of the loan. If however you are a consumer (I guess consumer loans), the bank have no claims of compensation.

On the fixed interest loans this is different and the bank might demand compensations of lost income on interest rates.

I would not bind my loans to a fixed interest rate, because I can manage a 3-5 interest points increase just fine.
Right now my mortgage is creeping below 3 percent and the fixed interest rate, If I would have considered it is around 5-6%. I believe in the long run (20 years) you save money on the floating interest rate. I bet those that bound their interest rate at 7-8% is . They bound their interest just before the world economy crashed. I remember I was sweating too, when the interest went from 2.94% to 8 in a few months. Then the world economy collapsed and I am back where I started.

[Sigurd]

Edit: and you're sure his fortune was 24 billion? Sure that isn't his family's fortune? I thought he split it up among his kids a couple of years ago...

http://no.wikipedia.org/wiki/Stein_Erik_Hagen

[HoreTore]

Two rather interesting articles in Aftenposten today, Sigurd, on page 12.

The first one, translated for english speakers...

- The asset tax means nothing

NHH-professor* slaughters the arguments against the asset tax, and says Stein Erik Hagen is allergic to taxes.

- That the asset tax destroys jobs is just nonsense, says Terje Hansen, professor at NHH, who's specialty is tax questions. The professor dismisses the idea that the tax destroy the incentive to invest.
- It's pure baloney. The asset tax is so small that it really doesn't matter for the rich, he says.
He refers to a study Bergens Tidende(a newspaper) did of the 30 richest people in Hordaland.
According to the magazine kapital's estimates, these people had personal fortunes between 800 million and 8 billion NOK. The average tax was still no more than 0,2% of the real fortune.
- And that was income and asset tax combined. The super-rich pays very little tax. They spend more on their summer vacation than they pay in taxes, say Hansen.
Stein Erik Hagen has on multiple occasions said that he wants the tax on dividends to increase, while removing the asset tax.
- He only says that because he has arranged it so that he can take out tax free dividends from his companies. He's allergic to paying taxes, says Hansen.
More people than Hansen are tired of hearing about a difficult life for businesses in Norway.
- The picture of Norway as hostile to businesses is created by certain politicians and unhappy business leaders, but they should learn how it is in other countries, says professor Torger Reve at Handselshøyskolen BI/"Trade College BI".

*NHH is Norges Handelshøyskole/"Norwegian Trade College", the bastion of free trade and liberal economics... It's where the future CEO's study.

The second article of interest, is a small one about John Fredriksen. For those of you who don't know who he is, he's the most famous norwegian tax refugee. What the article is about? He's moving back to Norway, because of the socialist tax and financial policies....

[HoreTore]

http://no.wikipedia.org/wiki/Stein_Erik_Hagen

Ah.

You should learn to use better sources, Sigurd. Those 24 billions are his family's fortune... And those were cut up and divided among his children.... Kapital lists the family fortune as one entry, with Stein Erik Hagen as the name, as they've always done. But the fortune is divided up now.

[Sigurd]

Ah.

You should learn to use better sources, Sigurd. Those 24 billions are his family's fortune... And those were cut up and divided among his children.... Kapital lists the family fortune as one entry, with Stein Erik Hagen as the name, as they've always done. But the fortune is divided up now.

Hey... the total is what counts right? Someone still has to pay 240 million for those assets. Combined or not, this is what the state demands.
If he divided that money equally (4 kids + wife) they would still each have to pay 40 million in fortune tax.... unless they have invested them in property. The fortune tax is calculated from 27,5% of the value on properties.

Hmm... his company is divided 10/30/30/30 with Stein Erik himself owning just the 10%. The rest is apparently divided between three of his kids.
The last kid is under 18 or something?

[Husar]

Nonsense! I wasn't talking about income tax really, but I was talking about how much he should pay according to his income(28%). As you can plainly see, even with this tax, he only pays a few percent of his income in taxes.

The asset tax is there simply because the wealthiest people do not pay income tax at all. If that tax was to go away, people like Stein Erik Hagen wouldn't pay any taxes at all.

Yes, but it's a very weak solution, a much better solution would be to get rid of all these things they use to get around paying those 28%, simplify the tax system and make them actually pay those 28% of their income. If he is a billionaire and pays only 10 million then obviously he isn't paying the full fortune tax either, seems ust as useless as the income tax in that case.

[HoreTore]

Hey... the total is what counts right? Someone still has to pay 240 million for those assets. Combined or not, this is what the state demands.
If he divided that money equally (4 kids + wife) they would still each have to pay 40 million in fortune tax.... unless they have invested them in property. The fortune tax is calculated from 27,5% of the value on properties.

Hmm... his company is divided 10/30/30/30 with Stein Erik himself owning just the 10%. The rest is apparently divided between three of his kids.
The last kid is under 18 or something?

I asked simply because I wondered about it

But instead of speculating about what his fortune is, why not just check it out?

Stein Erik Hagen paid 10 million in taxes in 2007. His fortune(the fortune the tax is calculated from) was 1.2 billion. I don't know the name of his other son, but Carl Erik Hagen and Nina Camilla Hagen (my future wife) both paid 16 million in taxes while they each had a fortune of 2.6 billion.

And his wife, Treschow, has her own fortune which has nothing to do with Hagen's, and is listed separately on Kapital's list...

[Louis VI the Fat]

Yes, well, such is the nature of living in a social democracy. Of course this tax isn't exclusive to Norway. That is what the poor prosecuted rich think everywhere, that only in their country they are 'punished' for doing well. In France, one pays 'Impôt de solidarité sur la fortune', or ISF. It works exactly the same as Norway's wealth tax.

And in France too, many wealthy flee to Switzerland. Johnny Hallyday is a notable example. Get rich in France, move to Monaco to avoid income tax, and move your capital to Switzerland to avoid wealth tax.

This is how the very wealthy manage to avoid paying their share. Bunch of leechers. It is taxes like this that is the difference between Brazil and Europe. It is why Norway has the world's highest social mobility, and Brazil one of the lowest. Brazil has very few self-made men. Scandinavia abounds in them. Yet, once they've made it, they cry and complain about the unfairness of it all. Losers.

[a completely inoffensive name]

I am bowing out of this conversation because all these taxes and what the guy is paying or not paying is going over my head. I don't even understand wtf kind of tax this guy, horetore tells me its the asset tax but from sigurd I got the impression that if he is worth billions he would be taxed more then 10 million. Whatever, I am done. I am going to read a taxes for dummies book.

[Louis VI the Fat]

I am bowing out of this conversation because all these taxes and what the guy is paying or not paying is going over my head. I don't even understand wtf kind of tax this guy, horetore tells me its the asset tax but from sigurd I got the impression that if he is worth billions he would be taxed more then 10 million. Whatever, I am done. I am going to read a taxes for dummies book.

The tax is best compared to American property tax. The difference is that the clever, at least: practical, Americans understand that if you employ a wealth tax, net tax revenue actually decreases: capital is simply moved. However, real estate can not be moved, so this is what is taxed in America.


Or, to summarize the cold hard facts of this thread: billionaires everywhere leech off the system.

[a completely inoffensive name]

The tax is best compared to American property tax. The difference is that the clever, at least: practical, Americans understand that if you employ a wealth tax, net tax revenue actually decreases: capital is simply moved. However, real estate can not be moved, so this is what is taxed in America.


Or, to summarize the cold hard facts of this thread: billionaires everywhere leech off the system.

Ok, that makes makes sense.

[HoreTore]

The tax is best compared to American property tax. The difference is that the clever, at least: practical, Americans understand that if you employ a wealth tax, net tax revenue actually decreases: capital is simply moved. However, real estate can not be moved, so this is what is taxed in America.

But hey, one can easily have both