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

[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.

[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.

[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]

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]

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?

[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...

[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....