The Taxation of Norway’s Richest¹

The purpose of this article is to reconcile findings from Aaberge et al. (2020), which show that the Norwegian tax system is regressive at the top (1 percent richest) of the income distribution. We approach this through the example of an investor who exclusively owns stocks and earns only capital income. Our study examines how various aspects of the Norwegian tax code might contribute to the low average effective tax rate among the wealthiest individuals. Key elements of our analysis include the wealth tax, the tax on distributed dividends, the effective average corporate tax rate, and the type of stocks (listed or nonlisted) the investor holds. We find that, throughout the period from 2004 to 2018, the average effective tax rate for Norwegian investors ranged from 14 to 21 percent, varying based on their efforts to minimize tax payments. Our study confirms that the Norwegian tax system is regressive at the top of the income distribution.