I’ve mentioned before that higher tax rates don’t appear to drive much migration among millionaires. A new working paper from the National Bureau of Economic Research finds that Norway’s recently increased taxes on business wealth pushed a handful of the super-mobile super-rich to move but produced more public revenue without hurting business:
To shed new light, I exploit a series of related Norwegian reforms during 2021–2024 that increased dividend tax rates, removed migration-related capital gains tax loopholes, and nearly doubled the effective marginal tax rate on business wealth. These reforms spurred international debate and, allegedly, an “exodus” of Norwegian billionaires (Financial Times, 2023). While I document clear effects on migration, these responses are concentrated among the top 0.1% of the wealth distribution and mostly confined to 2022 and 2023. My results indicate that at most 100 individuals left due to the reforms. I find no evidence of significant outmigration or reduced inflows of startup founders or inventors. I estimate that absent any outmigration, wealth tax revenues would have increased by 75% from 2021 to 2024. Reform-driven outmigration lowers the revenue gain to 71.5%. My findings further show that outmigrating owners’ firms remain economically active and do not reduce investment.… Across settings, I find no evidence that Norwegian-owned firms pay out more dividends or invest less after the reforms, nor is there any evidence that the reform induced more bankruptcies. These findings indicate that the short-run economic costs of wealth taxation, in terms of migration and firm investment, are more limited than the public debate implies [Marius A.K. Ring, abstract: “Taxing Entrepreneurial Wealth: Evidence from Norway, 2021–2025,” National Bureau of Economic Research: Working Papers, October 2026].
And you know, maybe having fewer snooty billionaires crowding your fjord with their yachts is a plus.
Sometimes you just have to stand up to the bully.
Well yeah for Norway. However when my ancestors came to South Dakota from Norway in the 1880s it certainly wasn’t because of a wealth tax. The Norwegians got rid of their poor people. You know the huddled masses thrown out on their asses. At least there was a place to land. I still get spitzmur from Renner Corner.
A wealth tax is something that has always made sense to me, but not having ever researched it, I wanted to test whether the claims made against it were valid or not. Here is what I found when I consulted Chat GPT about the Norwegian paper you mentioned, Cory:
Its overall assessment:
“I would distinguish between the arguments this paper substantially weakens and those it does not.
“The claim that higher wealth taxes inevitably cause a mass exodus of entrepreneurs
“The Norwegian evidence substantially weakens this argument.
—
“The claim that wealthy people leaving necessarily means their businesses and jobs leave.
“The study provides substantial evidence against that assumption.
___
“The claim that increased wealth taxes cannot raise much additional revenue because of avoidance and migration
“Norway’s experience is a meaningful counterexample.
———
“The claim that wealth taxes have no significant long-term effect on investment, entrepreneurship, or growth
“The study does not establish this.
———
“The claim that an American wealth tax would be easy to administer
Norway’s results do not settle the valuation, enforcement, or constitutional challenges.
“Norway’s results do not settle the valuation, enforcement, or constitutional challenges.”
I would like to see a fair income tax where all income is under one category of taxation: salary/wages, investment, inheritance . . . All of it. Labor being taxed at the highest rate is absurd – especially when compared to other tax rates.
I remember the SD wealth tax and my father hiding the televisions before the assessment. Peanuts to what the .01% would bring to the devastation table, but let us not have perfect be the enemy of the good. Income in the US HAS been redistributed, and the 99% lost!