Local businesses with prayers to the government: – Be grateful for foreign competitors who do not pay wealth taxes

VARHAUG (Nettavisen Økonomi 🙂 Hans Kristian Aasland (51) runs the Jærentreprenør company.

The entrepreneur is frustrated that the wealth tax debate is often about the super-rich and that small businesses like Jærentreprenøren disappear into the crowd. The company has 110 employees, but it can employ up to 600 when they must perform tasks such as building a bike path, a bus route or a school.

– We are eliminated by foreign competitors who do not pay wealth tax. We are not on the same starting line in this competition, says Aasland.

Watch the video interview at the top: Local company with a clear message on wealth tax: – Lose the competition

Despite difficult times in the industry, Jærentreprenør must pay wealth taxes, calculated on the value of machines and stocks. Many in the industry have hardly any money in the bank, but they still have to receive dividends or use their own money to pay estate tax. However, foreign-owned businesses should not do so.

Aasland is aware that local businesses like Jærentreprenør pay taxes with pleasure, but that in bad times it is difficult to have to take dividends to pay wealth tax instead of securing jobs and investing in technology that can help the company to get new assignments. .

– It is difficult when the box from before has been scraped. For example, would it have been an idea that we could get a discount when we are not making money?

Fierce debate

The wealth tax debate flared up again when an expert report from the Frisch Center claimed that the tax led to more people getting jobs, not fewer.

Also read: Be skeptical when politicians use research to “prove” they are right

The conclusion drew great applause from the left in Norwegian politics: Hadia Tajik of the Labor Party thought the Conservatives were stripped of a report they had commissioned themselves. However, Finance Minister Jan Tore Sanner (H) rejected the report and responded by cutting wealth tax in the proposed state budget. The discount on the value of the so-called “working capital” will increase from 35 to 45 percent if the government gets what it wants.

Trade and Industry Minister Iselin Nybø (V) cannot make any more promises to Jærentreprenøren, but says she listens to what Aasland and other Norwegian business leaders have to say.

– I have a strong understanding that competing companies are concerned about a level playing field and must start on the same starting line. We also get feedback from this company that what the government is doing, that we reduce the tax on working capital, means a lot to them and that this is the way to go, Nybø says.

Also read: Free Imagination and Political Dreams That Increasing the Estate Tax Creates More Jobs

Also read: Researchers Strike Back: Tabloid and Streamlined Wealth Tax Presentation

The trade and industry minister believes the fronts in the wealth tax debate have become so steep that small business leaders feel alienated and do not speak.

– These are owners who care about their local environment and creating value for the benefit of their business. They find the estate tax frustrating because they have to withdraw money to pay it. And I don’t think they are recognized in the theoretical debate that is taking place in Oslo. They are concerned about doing a good job and giving it back to their local community, Nybø says.

NHO Rogaland CEO Tone Grindland believes the punishment of local businesses for being Norwegian-owned must end.

– A business community in general has as one of its main priorities eliminating the wealth tax on working capital. This is a special tax for Norwegian homeowners, which foreigners don’t have, Grindland says.

Read more: Politicians approach Bjørn Dæhlie: Petty and unaware of the role

Researchers struggle to find the effect on companies

The government wants to cut the wealth tax so that private companies can conserve capital and use it to preserve jobs. However, the Frisch Center report comes to the opposite conclusion, namely that companies use wealth tax to invest more in their employees and less in machines to exempt from the tax.

However, the Frisch Center report has yet to be reviewed by other experts, and several economists have reacted to the methods.

BI researchers also recently investigated how wealth tax affects family businesses: BI researchers found that businesses had less to spend because they had to pay dividends to pay wealth tax, and that profitability and sales growth fell.

At the same time, the BI researchers were unable to show that the estate tax had any effect on employment.

Also read: For an entrepreneur who knows the effect of wealth tax on the body, the academic debate on the subject is fascinating to follow.