Kristoffer Berg article published in Dagens Naeringsliv
29 March 2023
Kristoffer Berg, a researcher at the Oxford University Centre for Business Taxation, argues that taxing investors more and companies less could be reasonable. He points out that the political pressure for lower taxes diminishes if the gains are taxed in the year they are accrued, but the tax bill is not due until they are realized. Taxing investors more and companies less may make sense, as it has been suggested that taxes on investors do not reduce investment as much as corporate taxes do, and Norwegian investors are less mobile than corporate profits. However, foreign investors are taxed in their home countries, and some countries have higher taxes on dividends and capital gains. Berg warns that moving towards lower capital gains taxes due to the accumulation of unrealized gains since 2006 would be a big mistake. Investors will see that it pays to wait for a more favorable regime, and the potential gain of waiting for lower taxes could partially undermine the shareholder model. Therefore, a more robust system would tax gains according to the rules in the year they are accrued but still allow the tax bill to be due upon realization. This would remove the advantage of waiting for tax reform and may reduce political pressure. Berg argues that if Fasting and Clemet's argument is that wealth tax is particularly demanding because it is paid independently of profits in that year, then this is a great argument for a robust shareholder taxation system with taxes on dividends and realized gains.