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Norwegian tax chief hopes for right-wing deal on wealth tax
🇳🇴 Norway /Economy & Trade

Norwegian tax chief hopes for right-wing deal on wealth tax

From Aftenposten · () Norwegian

Translated from Norwegian, summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • A Norwegian tax commission leader is urging the Labour Party to seek a broad tax agreement with the right-wing, even if it means lower wealth taxes.
  • The commission proposes eliminating valuation discounts in wealth tax to fund rate reductions and increase the tax-free threshold.
  • Stable tax rules are considered more crucial for redistribution than frequent changes based on political shifts.

Eigil Knutsen, head of Norway's tax commission, hopes the Labour Party will forge a wide-ranging tax accord with the right-wing, even if it entails a reduction in wealth taxes. The commission's proposal includes removing valuation discounts on wealth tax, using the revenue to lower tax rates and raise the tax-free threshold. Additionally, it suggests income tax relief exceeding 20 billion kroner.

Knutsen, a former Labour politician, argues that stable tax regulations might be more significant for redistribution than fluctuating tax levels tied to shifts in political majorities. "What creates more redistribution over time? Is it that the tax system jumps up and down and back and forth across majorities, or is it creating greater predictability and calm around some of the main lines? I believe it's the latter," Knutsen told Klassekampen.

What creates more redistribution over time? Is it that the tax system jumps up and down and back and forth across majorities, or is it creating greater predictability and calm around some of the main lines? I believe it's the latter.

— Eigil KnutsenKnutsen explains his view on the importance of stable tax rules for redistribution.

He acknowledges that the tax cuts, in kroner terms, would be largest for high-income earners. "In the proposal, all income groups receive roughly the same percentage cut, and in kroner, it's largest among those who earn the most. And because those with the very lowest incomes in Norway do not pay tax, and those with low incomes pay very little tax, it is difficult to cut further. It is difficult to propose negative tax, and that would be a larger reform," he explained. The tax commission's report is currently out for public consultation, with the deadline for feedback set for September 24.

In the proposal, all income groups receive roughly the same percentage cut, and in kroner, it's largest among those who earn the most. And because those with the very lowest incomes in Norway do not pay tax, and those with low incomes pay very little tax, it is difficult to cut further. It is difficult to propose negative tax, and that would be a larger reform.

— Eigil KnutsenKnutsen acknowledges the distributional impact of the proposed tax cuts.
DistantNews Editorial

Originally published by Aftenposten in Norwegian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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