r/NoStupidQuestions • u/Discontitulated • 1d ago

Governments say they can't tax the super wealthy more because they'll just leave the country but has any first world country tried it in the last 50 years?

It would be interesting to see how raising taxes on the super wealthy actually affected a first world country's tax revenue and economy.

Are our first world economies really so fragile the rely on the super wealthy and their meager tax revenue?

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u/literallyavillain 1d ago

Some startups have fled Norway due to their unrealised gains tax which is probably the closest to a “wealth tax”.

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u/vagastorm 1d ago

Most have left over the actual wealth-tax.

On a side note: I believe it would be better to tax company profit than the owners on paper value.

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u/GrynaiTaip 1d ago

Lithuania decided to tax bank profits during covid, to fix budget deficit. Then the tax was extended. Now the second largest bank (SEB, Swedish company) announced that they're packing up their main office and leaving, specifically because of this profit tax.

Also, they raised prices of all services to cover this new tax, so in the end it's still the customers that pay for everything, while the directors are unaffected and enjoying the greatest profits ever.

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u/NorwegianCollusion 1d ago

Ok, but to be fair, "the second largest bank (SEB, Swedish company)" is not a good starting point for the country. Banks should not be allowed to grow "too large to fail". And especially not foreign banks.

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u/heres-another-user 1d ago

The issue with allowing banks to fail, though, is that your citizens who had all their money in the failing bank will now start to ask questions. It becomes very messy VERY quickly, as governments tend to work much slower getting solutions in place than the people who are now penniless have time for.

But to be honest, usury itself is kind of a fucked up practice and is the source of many problems typically associated with capitalism.

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u/ithappenedone234 1d ago

Nothing about securing the funds in the accounts of the citizenry requires bailing out the top big to fail bank they had their money in. The bank can fail, the directors charged for any crimes committed and the people can just take the cash the government insurance provides and take it somewhere else.

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u/Sudden-Pie1095 1d ago

Dont bail out the banks. Bail out the people.

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u/KooEnjoyer 1d ago

FDIC ensures that anyone who’s money I care about(normal people) will be safe

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u/LysergioXandex 1d ago

FDIC is meaningless. Sure, the normal people will get their money back if the banks fail. But that money will be immediately devalued by massive inflation.

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u/Independent-Wheel886 1d ago

Banks failing cause deflation

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u/martin33t 1d ago

Soon to be gone thanks to some people that didn’t like the price of eggs.

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u/Minimus-Maximus-69 22h ago

Not in Lithuania lol

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u/flonky_guy 1d ago

I would think the fall of 2008 put rumors to rest about government being slow to respond to financial crisis's. The US literally intervened within hours to create a $50 billion insurance fund while the banks were reeling and didn't come up with a response for months other than to say "thank you for the the free loan may have another."

For certain there are government agencies that are routinely sabotaged in order to create crisis moments, like FEMA during hurricane Katrina, But specifically speaking to financial issues, the government is arguably the most dynamic actor in play.

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u/zzazzzz 21h ago

not really. in most places the govt puts an insurance on your account up to some number for me its 250k. in case the bank fails and closes its door tomorrow the central national bank will 1:1 give me what i had in my account up to 250k. because bailing out your citizen is a lot more value than bailing out a bank that was so bad at its job that it failed.

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u/GrynaiTaip 1d ago

Bank profits went up A LOT over the past five years, that's why they were taxed. What would be a better starting point?

And especially not foreign banks.

It doesn't really matter where a company is headquartered. It's very easy to pack up and leave to another country in EU.

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u/NorwegianCollusion 1d ago

Not really relevant to "big Swedish bank pulls out of Lithuania". Imma make my own bank! With blackjack. And hookers!

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u/GrynaiTaip 1d ago

There are two major banks in Lithuania, both are Swedish (SEB and Swedbank), so this is kind of big news because probably 80% of people use one of them.

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u/AdagioHonest7330 1d ago

What has driven bank profits? Investment operations?

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u/GrynaiTaip 1d ago

Prices (inflation) went way up across the EU during the start of covid, so the European Central Bank raised the EURIBOR rates for everyone, to slow down the spending and control the inflation. It's basically an extra fee on your house loan.

Most real estate loans in Lithuania have flexible rates, so all of a sudden people had to pay a lot more, and all of that money went straight to the banks. 800 eur/month loans became 1000/month. Banks got a lot of extra money.

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u/AdagioHonest7330 1d ago

If the central bank increased the rates, then the banks had to pay more to borrow money to then lend out.

The markets have had an amazing run the last few years and most banks also have investment interests and or brokerages.

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u/xX8Havok8Xx 23h ago

Remove the ability to trade in the country if they leave and forfeit all ownership of assets within the country to a holding trust that any profits/revenue are used for public good. Companies that return may apply to have their property returned, which will be granted, as long as they cover the calculated tax owed from their years away.

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u/TheDaemonette 22h ago

I think the problem is the amount of stuff they are allowed to defer/offset tax for. If they weren't allowed to do stuff like 'pay a fee for the use of the bank name' to a head office in a low tax country, for instance, then they wouldn't be able to reduce their actual tax paid to a miniscule percentage of their profits. It seems like there should be a minimum rate of tax that should be paid, below which the corporate is not allowed to reduce by accounting tricks. That rate should be set at some fraction of the highest marginal personal tax rate in that country. Either that or the UN should get together and do something useful for a change and agree a global minimum corporation tax to avoid tax havens from taking the piss.

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u/ForesterLC 1d ago

No company should be allowed to grow too large to fail. That's the real root of many of our problems. Capitalism doesn't work when you're allowed to buy your competition and regulators. Fixing this would fix most of our other issues.

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u/Acceptable-Let-1921 1d ago

That's when you just switch to a bank that isn't traitors. That's what many of my friends did, SEB always sucked anyway.

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u/tigersgeaux 1d ago

Businesses always pass it along to the consumer

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u/0111010101 1d ago

Why not just let them go? Let the door hit them in the ass on their way out. It will create more opportunities for businesspeople who actually care about their society.

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u/GrynaiTaip 1d ago

Nobody's stopping them, they are free to leave. No other bank has expressed similar ideas.

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u/OneCollection4947 1d ago

isn’t norway one of the happiest countries in the world along with the largest sovereign wealth fund? something like $100K per citizen in that fund?

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u/Pyro_raptor841 1d ago

Yes, Norway does indeed have a large amount of oil

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u/2194local 1d ago

…and the 78% tax on the extraction of that oil.

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u/No_Mammoth8801 1d ago

There is, effectively, not much private extraction of oil being done in Norway considering the government owns 60-70% of the shares of companies doing said extraction.

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u/cipheron 1d ago

This is the way. Tax the natural resources heavily, go lighter on other taxes.

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u/Gh0stMan0nThird 1d ago

That's how Alaska is in the US. No income taxes because they have so much money from oil.

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u/Beebeeb 1d ago

Alaska does have pretty high property taxes which is too bad because it's punishing the people that live there and not the people that come to work and then leave when the weather gets bad.

As far as I know we give the oil companies a lot of kick backs too, I wish we taxed them like Norway.

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u/Ivegtabdflingbouthis 1d ago

it would probably be fairer if there was a separate property tax rate for permanent residents. because people who own properties for the transients are getting hit with that higher tax rate too, as they should

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u/[deleted] 1d ago

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u/Ok_Letter_9284 1d ago

Renters pay property tax. They do it via their rent. Only a moron landlord wouldn’t account for taxes in their rent.

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u/guitar_stonks 1d ago

But hey, the state cuts you a check every year /s

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u/Commercial_Sun_6300 1d ago

Can't wait till the 3rd world countries get wise, band together and do the same...

Imagine all the rubber producers forming an OPEC like cartel and raising the price of latex. You can run cars without oil, I don't see any tireless vehicles being adopted widely yet.

(Car tires are like 30-40% natural rubber latex. An entirely synthetic tire doesn't have the right physical properties.)

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u/lo_mur 1d ago

The whole reason the world buys oil from the oppressive, human rights abuse riddled countries that make up OPEC is because it’s cheaper - you wanna make Canadian, American, etc. oil even more expensive? Might take a few bucks out of a couple billionaires paws but they’ll just be redirected to an even bigger billionaire in Saudi Arabia

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u/colintbowers 1d ago

Works well when you have a metric shit-ton of natural resources. But not every nation can rely on this. Having said that… crying in Australian

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u/defcon212 1d ago

Every country charges fees or taxes on oil extraction. Norway and OPEC countries have easy to get to oil in large amounts compared to their population. In the US we have large oil reserves but they are not as profitable and our population is higher in comparison.

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u/NeverRolledA20IRL 1d ago

The USA has exponwntially more oil and couldn't be more different. 

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u/Adventurous-Soil2872 1d ago

Check out oil and gas production per capita. Norway produces .37 barrels of oil per day per resident, the US produces .038 barrels of oil per day per resident. Norway produces 2070 cubic feet of natural gas per day per resident,the US produces 310 cubic feet of natural gas per day per resident.

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u/Irontruth 1d ago

But the biggest difference is that here in the US, we just sell our natural resources to the highest bidder. I live in Minnesota, and there is an international company that wants to build mines in the northern part of the state. So, if allowed to do so, all the profits from said mine would be leaving not just Minnesota, but mostly leaving the US as well.

I would prefer that we just protect our natural lands, as they are some of the most pristine and accessible lands in the entire country. But.... if we were to open up to mining, it should be done so that the local community gets the vast lion share of the profits. Not an international company that extracts all that it can, and then sells the mine to a shell company with no money, and leaves the poorly paid community on the hook for the cleanup.

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u/Tacoman404 1d ago

Yep. Norways energy industry is nationalized. Canada’s used to be and they’ve seen nothing but economic decline since it was denationalized.

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u/IShouldBeInCharge 1d ago

Someone needs to tell the fucking prices of the houses!

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u/temp2025user1 1d ago

Private competition is the only way to do it. You can complain about environmental protections, but not state companies being better. The US owns the fucking planet because privatized competition is cutthroat.

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u/HerculePoirier 1d ago

all the profits from said mine would be leaving not just Minnesota, but mostly leaving the US as well

Doesn't work like that anymore. There are plenty of measures (e.g BEAT) to curtail that.

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u/intern_steve 1d ago

How does BEAT work? I'm not seeing a way around a foreign company profiting from my custom leading to the foreign entity being enriched.

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u/Historical_Fix8389 1d ago

Saying one number is 'exponentially more' than another isn't useful. That expression is used for the relationship of different rates.

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u/_Tagman 1d ago

God bless you, fighting the good fight

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u/Laiko_Kairen 1d ago

The USA has exponwntially more oil and couldn't be more different.

Possibly because we have 60x the population...

Managing 5.5 million people with little diversity in a narrow geographical region is a lot different than a nation of 360 million that spans an entire continent

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u/Ill_Month_9318 1d ago

Exponentially more people living in the US than Norway too. A ton of US cities have a higher population than the entirety of Norway

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u/GrayArchon 21h ago

Uh, no? Just New York. How many people do you think live in Norway?

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u/OneCore_ 1d ago

Small country

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u/wonderhorsemercury 1d ago

Norway is essentially a gulf state, but they're scandis, not arabs, so instead of the world's tallest building and a 2 km "HENRIK" carved into a fjord, they have the world's largest investment fund.

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u/Sphincterlos 1d ago

You mean like Venezuela?

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u/No_Abrocoma_2114 1d ago

Norway is the Saudi Arabia of Europe when it comes to oil

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u/GrynaiTaip 1d ago

Luckily it's not Saudi Arabia in most other aspects.

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u/Sasha_bb 1d ago

They're working on that.

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u/beachfinn 1d ago

Well, per capital terrorists are pretty high in both….

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u/NorwegianCollusion 1d ago

Hush, we don't like to sound TOO welcoming either. Good for a vacation, but "fuck off, we're full" for immigration.

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u/Scrambled1432 1d ago

Isn't that kind of horrible?

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u/hamoc10 1d ago

Yeah they take some of the profit from the extraction of their natural resources and invest it for the benefit of the people.

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u/BallOk9461 1d ago

Due to oil.

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u/Active-Length3983 1d ago

They get the investment money from oil. Then they invest it in a highly regulated way, one rule is no investment in non-renewable energy.

The goal being the investment fund sustains itself long after the oil.

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u/gerkletoss 1d ago

That's the goal. Time will tell.

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u/seductivestain 1d ago

That's what happens when you hoard all your oil money to a population under 7 million.

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u/tickletheclint 1d ago

"hoard"

Seems like wise investing to me

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u/landlord-eater 1d ago

Bizarre use of the word 'hoard' lol

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u/BTolputt 1d ago

Yeah... and that's a good thing. Why shouldn't they hoard the profits made from the land for the benefit of those who make that land their home? It's kind of the purpose of taxation.

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u/say592 1d ago

I don't think they were saying it's a bad thing, just that it's not repeatable for other countries.

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u/BTolputt 1d ago

Sure it is. Take my country for instance. The Australian govt is practically giving away our non-renewable, minable resources (iron, coal, gas, etc). It could be repeated here, but is not because the govt is afraid of actually standing up for the future of it's citizens and kow-towing to international mining corps.

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u/MotorConversation781 1d ago

If only the ruling class weren’t infirm with greed.

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u/igomhn3 1d ago

Don't they have one of the highest rates of suicide?

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u/Sphincterlos 1d ago

All the sad people died.

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u/LHam1969 1d ago

Didn't answer the question.

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u/Generic118 1d ago

A lot for oil and a population smaller than many large cities in other countries.

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u/newprofile15 1d ago

Yea go figure having an absurd amount of oil makes you wealthy.

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u/Past-Community-3871 1d ago

Yes, oil wealth invested in US markets

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u/Hour_Insurance_7795 1d ago

CPA, CFA, and tax attorney here.

That’s largely from oil, not taxes. “You cannot tax yourself into prosperity”, as anybody with a basic understanding of grade school economics can tell you. (i.e. which is about maybe 25% of Reddit in my experience.) True economic growth is only attained by third-party transactions, not redistribution of existing funds. As seen in Norway’s case (selling oil to third parties, not collecting taxes from its own citizens.)

Happy Holidays!

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u/pawnman99 1d ago

The sovereign wealth fund doesn't come from taxing the net worth of their citizens. It comes from sitting on a giant oil reserve.

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u/FruitPlatter 1d ago

Sure but it's not really that happy here, and you couldn't tell me shit about the sovereign wealth fund amount going by the state of the mental healthcare system (there isn't one, unless you're standing on the edge of a bridge).

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u/Captcha_Imagination 1d ago

Then there won't be profit. They will just restructure expenses. Any real solution will have to face the threat of them leaving. Have to call the bluff and let them leave. Help the patriots that stay to flourish. Let the traitors live in the hell that is chasing tax havens. It fucking sucks, that's why most don't leave.

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u/GildedZen 1d ago

And just leaving doesn't make you avoid taxes in the US. It taxes americans income regardless of where an American lives or earns it from.

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u/Captcha_Imagination 1d ago

And it's almost impossible for a rich American to denounce citizenship because if they do, they have to cough up capital gains taxes for shares that were not sold. This is called deemed disposition and that's done at today's market value.

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u/Bonch_and_Clyde 1d ago

Then there won't be profit. They will just restructure expenses.

This doesn't make sense.

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u/Groundbreaking-Bar89 1d ago

This corporations are people after all..

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u/AppleBytes 1d ago edited 1d ago

Here's how you keep money in a country, and let those 1%ers go.

Ahem.... "No"

No, you can't take your money somewhere else, without paying an absurd tax rate, up front, on assets moved overseas.

And may God help you if we find out you tried to bypass this tax by hiding it in digital currency or movable assets like precious metals, gems, art, etc...

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u/Deto 1d ago

Why? Just because it's harder for a company to leave?

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u/livdro650 1d ago

Where did they go?

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u/Nexus_of_Fate87 1d ago edited 1d ago

Money will let you buy citizenship anywhere. It's the real "golden passport." Most of those companies will go to the US, UK, Switzerland, and other such wealth friendly nations.

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u/Just_Another_Scott 1d ago

US

This is why so many cheap commercial properties like gas stations are owned by foreigners. It guarantees them a visa.

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u/RequiemAA 1d ago

It's not a guarantee - you need to invest approx. $1,000,000, own land, and employee a certain number of US citizens based on the type of business.

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u/Just_Another_Scott 1d ago

you need to invest approx. $1,000,000, own land, and employee a certain number of US citizens based on the type of business.

Gas stations usually cost more than a million. There are organizaions that will purchase businesses like gas stations here in the US and then sell those businesses to foreigners to get a visa.

I know this because several gas stations got bought out in my home town and when talking with the new owners they told me why. They buy them up and then resale them to foreigners so that they can get visas to immigrate into the US.

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u/Texas_Mike_CowboyFan 1d ago

Indians do this with small hotels. There's a whole network of them that help each other buy, sell, and operate hotels.

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u/Living_In_412 1d ago

They're called Patel Hotels.

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u/pbrthenon 1d ago

I was once chastised and called racist by a friend of a friend I had just met for assuming he was in the hotel business after learning his surname was Patel. He chewed me out for like 10 minutes before confirming that he was indeed in the hotel business.

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u/cjsv7657 1d ago

Thinking about it I have been to an oddly high number of hotels that have Indian owners. I'm guessing Chinese people do this with Chinese restaurants. I've been to plenty with what I assume to be US Citizens but I've never been to one without what I assume is a Chinese person.

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u/Texas_Mike_CowboyFan 1d ago edited 10h ago

The Chinese do it with restaurant, tailors, dry cleaners, nail salons, you name it. Indians tend to stick to hotels and 7-11s.

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u/WorldNewsIsFacsist 1d ago

Money will let you buy citizenship anywhere.

Okay, that covers the founders and the board. What about the employees?

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u/LieUnlikely7690 1d ago

If everywhere worth living agreed to do the same thing they'd be stuck.

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u/AntiqueCheesecake503 1d ago

They would literally become the rich foreign investor in a developing economy enjoying the cost of living arbitrage.

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u/Individual-Cookie896 1d ago

Yea. People don't realize how many poorer countries would willingly accept them for less than the taxes that they are trying to avoid.

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u/Laiko_Kairen 1d ago

https://en.wikipedia.org/wiki/Immigrant_investor_programs

It's extremely common. You can move to basically anywhere in the Caribbean outside of Aruba if you throw 6 figures at their government... And 6 figures is a steal to avoid 8 figures of tax...

Like in St Lucia, you pay the govt $240,000, build a $300,000 housing complex at local rates, so a mansion, and you're set

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u/HeilHeinz15 1d ago

Have you visited there? The mansion is surrounded by poverty & crime.

The allure of being absurdly wealthy in super-poor countries goed away pretty quick

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u/say592 1d ago

If you are wealthy enough you either make it safe (for you) or you spend literally no time there, it's just for the passport. You live 3-6 months here and there, cycling between your several homes.

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u/HeilHeinz15 1d ago

The geography of most islands, especially ones likes St.Lucia with massive elevations, paired with limited road development makes anywhere with road access pretty populated.

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u/Odd_System_89 1d ago

If we are talking 100 billionaires, the government would form an entire military branch to protecting them, and a government agency to make sure the rich never see the poor, and depending on the nation the poor would comply and even defend the rich as those rich will literally food, cloth, and shelter their children through the tax revenue they generate. Look at what Brazil did leading up to the Olympic games, look at what happens in major city's when certain politicians want to do a photo op in the streets here in the US (literally goes from homeless and drug addicts are shoulder to shoulder, to not one in sight over 24 hours).

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u/Laiko_Kairen 1d ago

I haven't, but I'd imagine if I was a billionaire, I'd just not stay home much and stay in my "vacation home" in New York or something most of the time.

Or I'd build strong walls and hire private security 🤷

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u/Fred_Blogs 1d ago

The mansions aren't surrounded by crime, the mansions are surrounded by private security. The rich will have to deal with more poverty and crime living in a large western city than they'll ever see in a poor country.

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u/Odd_System_89 1d ago

Good luck on that one, the first nation to break from that agreement would basically get a massive boost in spending, which would send the wages of their people through the roof. I would also point out, that depending on how many nations we are talking about, some nations would basically do whatever changes were needed to get them to move there as the changes their wealth would make would make it worth it. Just think, some nations have entire armed forces tasked with just protecting tourists cause of how much the industry is worth to them. Now imagine what they would do to get them to move there and feel safe?

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u/Lethkhar 16h ago

the first nation to break from that agreement

Sanction them.

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u/ryry1237 1d ago

But if even one country didn't follow these rules, then all the companies would move there as their new business haven.

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u/SeeMarkFly 1d ago

It's financial Wack-A-Mole. Hit the rich with higher tax and they pop up in a different country.

Prevention is the key here. Don't let them get that rich in the first place.

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u/BlazeVortex99 1d ago

Lol how do you get the tax revenue then..?

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u/the_man_in_the_box 1d ago

By continuing to tax the population base as a whole who currently contribute much more of total tax revenue than the wealthy who pay lawyers and accountants to reduce their tax load as much as legally possible and also do illegal things to reduce their tax burden lol?

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u/GBParragon 1d ago

In the UK the top 1% of earners pay approximately 30% of total income taxes.

The next 9% pay another 30% ish and then the next 40% pay about another 30%

The final 50% of people contribute the remainder about 9- 10% of the total income tax revenues.

So that’s 10% of people paying 60% of the total revenue.

Maybe there are people dodging tax and falling out of these figures but even so it is still the minority who are paying the majority of the tax.

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u/seanl1991 1d ago

But don't the top 1% own like 43% of everything in terms of stored wealth and assets? They own more than 95% of the rest of humanity.

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u/Groundbreaking-Bar89 1d ago

Yep, and they use these assets to leverage really large low interest loans. When they get close to the loan being due, they go to another bank and take out a larger loan.

This is how the rich spend tons of money, have appearance of wealth, but don’t have an actual “income.”

So they don’t get taxed because they manipulate their money to show no money earned. Even though they use tax write offs up the wazoo.

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u/theecommunist 1d ago

The interest on the loan payments is taxed as income to the lender and the eventual sale of assets to cover the loan is taxed as capital gains to the borrower.

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u/WatkinsRapier 1d ago

It takes ~271,000 people on the mean salary in the UK to pay a billion pounds in taxes. Meanwhile there are billionaires who by all rights should be paying close to that a year in taxes who find loopholes to avoid it. And at the end of it, the billionaire will still be a billionaire with more money they could ever possibly need. What point are you trying to make exactly? We need to feel sorry for the 1% paying their fair share or something?

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u/Diesel_boats_forever 1d ago

How is it possible for a single taxpayer to consume a billion pounds in social services? They can only personally drive on so many roads, and probably exercise a private/paid alternative for most other things. There has to be some limit, at some point they have "paid their fair share". What about those at the bottom who consume far more than they'll EVER contribute? Lifelong net burdens on society.

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u/WatkinsRapier 1d ago

Simple. Every penny they’ve earned has been produced by a system that they live in and benefit from. The educations of their employees that create their wealth. The telecommunications systems they use to make business transactions. The roads that their products are shipped along. Every process, equation or law they use that has been developed and subsidised by governments. All of these are funded by taxes. Taxes help our society to function. And without a functional society they would have no ability to accrue wealth. Ergo, they should pay back into it.

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u/poulan9 1d ago

Another person who doesn't understand the difference between assets and earnings.

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u/GBParragon 1d ago

Name me a UK based person who should be paying a billion in tax and isn’t?

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u/sgrinavi 1d ago

They are wealthy on paper, most of their wealth is tied up in stocks or company ownership. They take loans against the assets, which are not taxable. When they do cash out the tax bill is massive, Elon Musk is estimating his federal income tax bill to be $11B for 2024. That's a pretty fair share if you ask me.

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u/No-Specific1858 1d ago edited 1d ago

What point are you trying to make exactly? We need to feel sorry for the 1% paying their fair share or something?

No one said this. The point being made is plainly obvious. It was a response to the previous comment effectively saying that the "common taxpayers" are responsible for most of the tax revenue. You are responding to a comment that was made to correct misinformation.

Also, although it is heavily implied, it might not be obvious to some that in order for 10% of people to be paying 60% of tax revenue they must be making a lot more than the other 90% of people. So it's not a "praise the 10%" comment or looking at them with any favor. They pay the majority of tax because they had a majority of the income.

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u/Lopsided-roofer 15h ago

Why should anyone pay one cent more than another for membership in the same club?

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u/Certain_Concept 1d ago

What? Why should the low and middle income pay a higher percentage of their income on taxes than the rich?

Especially considering the income of low and middle class people have not risen with inflation... We literally earn less spendable money than say the 70s. Where did the increase in income go? To the wealthiest..

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u/BlazeVortex99 1d ago

Look at income tax distribution as it stands right now lol?

https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2024/

Bottom 50% brings in 3.3% of total income tax revenue. Top 5% brings in 42% of income tax revenue.

Look at tax rates in EU on middle class lol?

https://taxsummaries.pwc.com/denmark/individual/taxes-on-personal-income

Lowest tax bracket in Denmark taxed at 12%. In the U.S.? 3%.

So, your solution is to get rid of America’s rich (who pay for 42% of shit) and quadruple taxes on the lowest income bracket of the U.S. to get Denmark level activities? Or is that not good enough for you?

. . . . .

(You’re financially illiterate I’m sorry)

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u/jjfunaz 1d ago

The amount of tax revenue the oligarchs contribute should be higher.

Stop shilling for them they don’t care about you.

The lowest bracket in Norway is much better off than the lowest bracket in the US, because they tax more and pay more and provide more in safety nets

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u/__Fergus__ 1d ago

I don’t think it’s unreasonable to expect the rich to at least pay the same basic rate of tax as the rest of us. The top 5% might pay 42% of tax but what proportion of wealth do they hold?

Hint: it’s much higher than 42%.

What we really need is a more effective way of taxing wealth gain that doesn’t come directly from income.

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u/TurnDown4WattGaming 1d ago

The top 1% paid 45.8% of income taxes while making 26.3% of all earned income.

The top 5% paid 65.6% of income taxes while making 42.0% of all earned income.

This is from Tax Year 2021 according to the IRS.

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u/__Fergus__ 1d ago

Income schmincome. You don’t make money via a salary when you’re a multi-millionaire / billionaire.

I’m guessing you know that though… so I’m curious why you’re so keen to defend the status quo?

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u/MrWaffler 1d ago

Land Value Tax, economists have known this for over a hundred years.

You can probably guess why you've never heard of it (the rich would really prefer to continue becoming even more richerer)

There's textbooks, introductory video essays, and a wealth of speeches from economists and politicians of yore.

Google Henry George if you're actually asking the question and read up. Land Value Tax really would significantly improve the process for the people and shift the burden

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u/BlazeVortex99 1d ago

A land value tax is one good proposal, as most do not own land. But it would have to be carefully applied. The other reason ‘I haven’t heard of it’ (lol) is because if you apply it uniformly (zoning wise, not value wise) is you’d crush renters. As with tariffs, costs will be passed on. While lots of landed gentry real estate is ludicrously valuable (and allows for loans with collateral— again avoiding taxes), the common homeowner renting out is not as in the green as you think.

Also, with the rise of AI and humanoid robotics, I think that would quickly become outdated. Corporate taxes, compute taxes, and perhaps very minuscule transaction taxes are the future imo.

The tug of war between the ‘oligarchs and common man,’ or ‘capitalists and communists,’ if you’d like to call it that, has always been about ‘labor’ and ‘relative standard of living.’

We are on the precipice of our labor not mattering, and the elite evolving to something else entirely.

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u/MrWaffler 1d ago

Policy shifts are far more complex than we can realistically discuss on reddit because you cannot make single changes in isolation

Even publicly funding elections wouldn't be straightforward despite sounding so

We have such complex systems in life but our politicians and public discourse is only ever in the simplest mass appeal terms possible

That's an issue that can be improved with education policy changes but yet again, a million variables and other holes that'd inevitably need closing.

It's why our founders continuously stressed the importance of government EVOLVING and our constitution not becoming a holy divine document - we need adaptability for the inevitable complexities

We'll get another shot at improvement in my lifetime - and I hope we can do a good enough job to shift the American psyche into the future

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u/BlazeVortex99 1d ago

100% agreed. Whether or not we agree on semantics, you’re clearly rational and approach things realistically. Appreciate that in discussions like these.

The reason democracies succeed more than autocratic regimes, imo, is because we have self-correcting mechanisms in place. How easily those should be triggered (and whether people are willing to self-correct, whether or not they are manipulated, etc.) is up in the air. But that’s what makes the system of government special.

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u/idropepics 1d ago

...by having a system that taxes them and make sure they're paying their fair share before they get rich.

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u/rhino369 1d ago

>Prevention is the key here. Don't let them get that rich in the first place.

Doing that without doing more harm is difficult.

You can prevent Elon Musk by making sure Paypal, Tesla, and SpaceX never happen. But they make a lot of money that gets captured by the rest of the society.

It's easy to say he gets too big of a piece of the pie. But if he convinces people to make two pies and takes 1/3rd of the second pie? That's more his fair share, but your unfair share is bigger than it would have been if there was only one pie.

It's an open question of whether these tech billionaires are actually bad for America. It would be better if we could reduce their take without removing the incentive to build the empires in the first place. But that's hard.

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u/Both-Day-8317 1d ago

Absolutely right. When MSFT went public 12,000 Microsoft employees became millionaires. I'm sure many, many more employees and investors have become millionaires since then.

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u/DevelopedDevelopment 1d ago

I think you're right. The government basically can't let companies have too much income or grow to have so much control that they're too big to fail. We basically need a kind of graduated tax structure that prevents people from gaining too much wealth, essentially preventing them from having the kind of influence that rivals the actual government but without the accountability of the government.

That does however sound like an income tax, over a certain point, or explicitly blocking the sale or transfer of assets to someone or an entity. And the way rich people make a lot of money is by having lots of assets that generate revenue over time, with their companies being worth a lot of money that they personally never touch. It's how people can get loans for a major purchase and pay for it monthly, except in the scale of millions of dollars.

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u/[deleted] 1d ago

[removed] — view removed comment

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u/cagefgt 1d ago

Welcome to reddit.

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u/damndirtyape 1d ago

Reddit scares me. These people gleefully talk about another French Revolution, not realizing that the French Revolution ended with The Terror and the eventual return of monarchical rule.

They’re not really thinking things through. They’d seemingly prefer to hurt the rich, even if that meant they were worse off. They’re not proposing intelligent solutions to make the world a better place. They’re just a dumb mob that wants to hurt someone.

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u/Soft_Walrus_3605 1d ago

not realizing that the French Revolution ended with The Terror and the eventual return of monarchical rule.

Sure, but that monarchical rule was a hell of a lot more democratic than it was before. Same with the Oliver Cromwell/Restoration dynamic.

History is not really a "well we tried it once and then everything reverts back to the way it was" kind of thing. One change causes another, etc. And sometimes violence is the only thing able to get that ball rolling (not advocating, just saying)

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u/Flare-Crow 1d ago

Given the effects of Citizens United over the past 20 years, do you really find it feasible that our government would EVER change for the betterment of the People over the rich without violence from the People being a part of the equation?

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u/Demeris 1d ago

Eh, see it for the entertainment, not for the reality.

Don’t forget that redditors are filled with vastly different users from many countries AND age. One person you can be responding to could be a 14 y/o in the states or someone in the UK.

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u/AlphaDonkey1 1d ago

Braindead comment

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u/Extra-Atmosphere-207 1d ago

Then they are just not going to open up a business in the first place? What are you going to do then?

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u/sokratesz 1d ago

Just fyi; you don't start out as a billionaire when you open a business.

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u/TransportationOk5941 1d ago

Correct, maybe you see your 1mil invested grow to 10mil. And then 100mil, because you had a really good idea. And maybe even 1-10bil, if it's a REALLY good idea.

Somewhere along the line we'd have to tax those unrealized gains, and before that happens you can be damned sure that soon-to-be-billionaire will be moving the whole company to a different country that doesn't have such an absurd tax rule.

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u/s33n_ 1d ago

Have multiple competing businesses. Instead of defacto monopolies. 

It'd be great 

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u/socal1959 1d ago

That’s how it used to be until Reagan dropped the Corporate Tax rate from 78% to 28% we’ve been going downhill since

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u/jackel2168 1d ago

I have some bad news for you my guy. For as much as a scumbag that Regan was and is, all revenue related bills (like taxes) start in the house and the house was very solidly controlled by Democrats in the 80s...

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u/Cyberhwk 1d ago

And what happens when that competition ends up with a winner?

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u/dudelikeshismusic 1d ago

I listened to a speech from a FIRE-minded entrepreneur who sold his startup for $5 MM and retired on the spot at 34 years old. That sounds like an awesome win to me.

I think of the lottery. We have low-level winners who get like $500 from a scratch off. Then we have life-changing winners who get hundreds of thousands or millions of dollars. Then we have the MEGA winners who hit the $1 Billion jackpot (and keep like 50% of that).

Once you get over that "mega winner" level you start to see the winners who now do everything in their power to limit the competition, sometimes by straight up buying elections. We don't need those people in our society. If someone isn't satisfied by "winning" with hundreds of millions of dollars in personal wealth, then I'm okay with losing their business (Meta, Tesla, etc.)

We need more guys like Tom from MySpace and fewer Mark Zuckerbergs.

If trickle down economics actually worked, then billionaires would be okay capping their personal wealth at $999 million, since they would be more motivated to grow the business itself and create more jobs.

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u/Cronhour 1d ago

Someone else in the country will open a business who will pay taxes. If the market exists someone will fill it without the need to be a massively exploitative shit, hell the country can even offer startup incentives that require in country registry.

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u/ILikeToDisagreeDude 1d ago

Norway don’t tax foreign owners with this tax, which is one of the problems. It’s unfair and don’t incentive starting a business or staying in the country. And that’s a shame because Norway is a great place to start a business!

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u/TheWizardOfDeez 1d ago

Many other people will see the market opening and become rich themselves. Billionaires don't create jobs, demand does.

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u/m9_365 1d ago

The brokies could do that now and start a business now

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u/cr1mzen 1d ago

this

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u/rudimentary-north 1d ago

You’re saying that the only reason people open businesses is because they think they will become billionaires?

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u/Slick-Fork 1d ago

Nobody opens one hoping it leads to poverty for them.

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u/Boblxxiii 1d ago

Sure, but I at least believe that people would still open businesses even if the upper bound on wealth they might get from it was "only" several million.

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u/Felaguin 1d ago

The entirety of human history shows that rose-colored look at finances and economy doesn’t work. The Pilgrims tried that kind of approach their first year in the American colonies and nearly starved to death. The second year, they allowed people to work for themselves and keep what they grew/hunted and the colony thrived.

Every time you cap what someone can get out of their work they either figure out loopholes to get around your cap or reduce their effort once they hit the cap.

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u/Irregulator101 1d ago

Thankfully the world isn't black and white

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u/JaapHoop 1d ago

Same thing I’m doing now. Crank my hog.

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u/Extra-Atmosphere-207 1d ago

Ironically, the most valid take here. ggs homie.

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u/htmlcoderexe fuck 1d ago

Get over here, I can't crank the shit out of your hog without getting closer.

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u/phoodd 1d ago

Yes, I have a brilliant startup idea but if I can only make 500 million then I guess I'll just keep working my day job. LMFAO 

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u/TheShamShield 1d ago

That logic makes zero sense. Being incapable of being a billionaire is not going to dissuade anyone from starting a business

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u/ShenaniganNinja 1d ago

Then someone else can open a business. Business is made by market demand, not by billionaires bequeathing it upon us.

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u/jwwetz 1d ago

What if I've got a giant oil & gas (I don't) company & sell 100 billion gallons of gas worldwide...but I get only 5 cents, personally, from each gallon sold? Technically, every employee makes much more money (hourly or salary) individually than I do, but I'm banking about $5 billion a year. Does that make me evil?

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u/Routine_Proof8849 1d ago

This is a hilarious take. Did you even think about this for one second? Say someone has a start up company and it succeeds. You are trying to prevent that from happening? Hahahaha. This definitely won't have any negative consequences at all...

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u/xxconkriete 1d ago

lol sounds like the worst possible thing, don’t generate wealth, amazing how bad that sounds

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u/Vaginal_Osteoporsis 1d ago

How rich is too rich?

Seriously.

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u/Various-Air-7240 1d ago

Wouldn’t you be better served actually putting effort into your life vs trying to limit what others do with theirs?

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u/RevolutionFast8676 1d ago

Celebration is the key. Celebrate their success, because a rising tide lifts all boats. 

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u/GravyMcBiscuits 1d ago edited 1d ago

Don't let them get that rich in the first place.

Why?

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u/ILikeToDisagreeDude 1d ago

The richest people in Norway have fled, not only startups.

Do not copy our model. It sucks. And this is coming from someone who isn’t rich even…

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u/Chijima 1d ago

It's not as easy as "do not copy". Every country should copy it at once, but doing it alone is heavily punished.

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u/keithps 1d ago

There will always be some country willing to settle for scraps. Look at Ireland and corporate taxes, for example.

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u/AntiqueCheesecake503 1d ago

Every country should copy it at once, but doing it alone is heavily punished.

Are you willing to have your country threaten war over it? Because that's how you get every State to adopt a policy when those States don't want that policy. Or you recreate North Korea and Cuba through purposeful exclusion (which still hasn't actually succeeded).

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u/cagefgt 1d ago

He is, apparently.

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u/ILikeToDisagreeDude 1d ago

Wrong. It literally sucks and hurts small businesses too, not only the rich owners. A business can literally lose money and the owners can have zero money in their bank accounts and then get slammed with a huge tax bill because of the company’s “worth”. And remember a company can be worth a lot just because it has potential - not because it has a ton of money.

And the worst part, foreigners with companies in Norway don’t have to pay..

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u/RectangularCake 1d ago

Please do not copy, the tax regulations are structured in such a way that if you don't manage to leave before your start-up is valued at whatever to get the necessary funding to grow, you'll be trapped in the country as the taxes may reach 115% of realized gains down the road if you decide to leave. Adding to the topic, foreign investors does not have to pay the tax at all; thus, companies are sold bit by bit to foreign investors to pay taxes of evaluations based on future potential. In the end, there will be no domestic ownership at all.

This system is killing innovation and start-ups.

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u/Konvic21 1d ago

But how is the quality of life for the average person? I imagine Norway is still doing pretty good, average person happier than those in the US no?

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u/fdf_akd 1d ago

Norway isn't a good comparison anyway because they are literally sitting on top of oil. If anything, it's a proof that a government can successfully manage natural resources

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u/SagittaryX 1d ago

Well no, the oil is underneath ocean, very few Norwegians are sitting on that.

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u/Smeetilus 1d ago

Cousin Sven was buried at sea

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u/ILikeToDisagreeDude 1d ago

It doesn’t matter, the point is that this tax is making it worse and the income it generates is like 5 days of revenue from our oil fund. So it’s just a drop in the water - but causes great damage to Norwegian owned businesses as they have to take out extra dividends every year so the owners can pay their wealth tax. And where do you think that dividends is taken from? From potential growth for the business or benefits for their employees…

And, if you’re foreign and own a business in Norway you don’t have to pay this tax! Which is unfair.

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u/nobono 23h ago

Do not copy our model.

I wouldn't say that. The wealth tax "discussion" in Norway is skewed by interest parties and media, hyping the "tragedy" that isn't quite true. Dagens Nærlingsliv had an interesting article (paywall) earlier this month where this was pointed out.

I translated the most relevant bits:

Looking at the total wealth tax for 2022, which is the latest year with complete figures, 22 out of 37 countries tax wealth more heavily than Norway. Israel is the country with the highest wealth tax. It is followed by the United Kingdom. The overall level of wealth tax in the UK is 3.5 times higher than it is for us Norwegians. Wealth is also taxed far more heavily in the United States than in Norway. Measured as a percentage of value creation, the total wealth tax in the U.S. is 2.6 times higher than in Norway.

Even in Switzerland, where many wealthy Norwegians have relocated, the total tax on wealth is almost twice as high as in Norway. It is natural to question why Norwegians who believe the wealth tax is too high move to a country where the total wealth tax is even higher.

The answer is that OECD statistics only show what an average citizen of a country pays in taxes. Many countries, including Switzerland, offer special arrangements for wealthy foreigners. Foreigners moving to Switzerland can negotiate their own private tax agreements, which are confidential and therefore cannot be compared with official statistics.

Looking at official statistics, the annual tax on net wealth for businesses and individuals is significantly higher in both Luxembourg and Switzerland than in Norway. In Luxembourg, this tax is over four times higher than in Norway, while in Switzerland it is more than twice as high.

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u/Yet_Another_Dood 1d ago

Norway doing it is probably a lot different than say, America doing it. I think everything is too entrenched in America to just move away.

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u/DangKilla 1d ago

9000 millionaires left the UK for Dubai this year. But who would want to live in Dubai?

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u/OneHellOfAVibrato 1d ago

But who would want to live in Dubai?

Nobody goes there anymore, it's too crowded.

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