Norway implemented a series of tax reforms between 2021 and 2024 that increased dividend tax rates, removed migration-related capital gains tax loopholes, and nearly doubled the effective marginal tax rate on business wealth. These changes sparked debate about whether higher taxes on business owners would adversely affect business activity by constraining investment or triggering an exodus of wealthy individuals, with some claiming it had already caused an 'exodus' of Norwegian billionaires.
The study found clear evidence of migration responses to the reforms, but these effects were highly concentrated. At most 100 individuals left due to the reforms, primarily occurring among the top 0.1% of the wealth distribution and mostly during 2022 and 2023. Critically, there was no evidence of significant outmigration or reduced inflows of startup founders or inventors. Despite these departures, wealth tax revenues remained substantial: the researcher estimates that without any outmigration, revenues would have increased by 75% from 2021 to 2024, and the actual observed outmigration reduced this gain to 71.5% over the same period.
Perhaps most notably for concerns about economic harm, the study found no adverse effects on business activity. Firms owned by individuals who emigrated due to the reforms remained economically active and did not reduce their investment levels. More broadly, when comparing firms owned by Norwegian individuals subject to the wealth tax with those owned by foreigners and other tax-exempt entities, there was no evidence that Norwegian-owned firms paid out more dividends or invested less after the reforms took effect. Additionally, the research found no indication that the tax changes induced more bankruptcies among affected firms.
These findings collectively suggest that the short-run economic costs of wealth taxation — particularly in terms of migration and firm investment decisions — are more limited than the public debate often implies, at least within the Norwegian context studied. However, the author notes that these results reflect specific reforms in Norway during a particular time period and may not generalize to other countries with different economic structures or to longer time horizons.