Norway, Voluntary tax is a failure

400In a bold experiment in voluntary taxation, the Norwegian government launched an initiative in June that allowed those who thought their taxes to be too low to make contributions to the state.

“The tax scheme was set up to allow those who want to pay more taxes to do so in a simple and straightforward way,” Finance Minister Siv Jensen said in a comment emailed to Bloomberg reporters. “If anyone thinks the tax level is too low, they now have the chance to pay more.”

The program raised just over $1,300 in its first month of existence, far behind all projected estimates. 

Norway is a country of 5.3 million people who already pay as much as 46.7% of their earnings to the government. So perhaps it’s not much of a surprise that few were willing to pay more. If the rate of contribution holds steady, Norway will have raised $15,900 by next May 31. The paltry sum is about 0.3 cents per capita, hardly anything to crow about.

Soon after assuming office, in late 2013, the Norwegian government was faced with one of the worst economic shocks in a generation as the price of crude plunged. The government responded by aggressively cutting taxes and tapping into the country’s massive wealth fund for the first time. 

“This is an election campaign showcase by the government,” Norwegian Labor Party strategist Harald Jacobsen said. He wants the Norwegian government to target large, multinational corporations as the primary victims of a new tax scheme.

It is worth noting that Jonas Gahr Store, the Labor Party candidate for Prime Minister currently ahead in the polls for this year’s elections, has a net worth of $8 million. Despite his substantial wealth, he is attempting to convince Norwegian voters that he is a man of the people while simultaneously promising to raise taxes.

“We have to take responsibility so that the economy is steered in a manner that doesn’t produce sudden jolts, which is bad for both consumers and companies.” Store said in an interview earlier this year.


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