Tycoon set to become tax exile
July 24, 2009
One of Norway’s wealthiest, self-made men says he’s moving his family and fortune to Switzerland, in protest over Norway’s much-debated fortune tax. Government leaders remain unsympathetic, claiming that he simply doesn’t want to pay his part of the bill for Norway’s social welfare state.
“We’re sorry that Stein Erik Hagen doesn’t recognize the joy of contributing to our common interests,” responded Finance Minister Kristin Halvorsen of the Socialist Left party when newspaper Aftenposten sought her comment on Hagen’s decision to become a tax exile.
Hagen, who made his fortune building up the RIMI chain of grocery stores in Norway and now serves as chairman of industrial concern Orkla, had just told TV2 that he no longer can live with what he considers the country’s onerous tax on net worth.
“I’m not unwilling to pay tax,” said the man who paid more than NOK 10 million in taxes in 2007. “It’s the way it’s calculated. The fortune tax (called formueskatt ) has tripled for many under this government, and you reach a point where you just can’t take it any longer.
“Then you have a choice to sell off what you have, or go elsewhere.”
While Norway’s left-center coalition government has embraced some wealthy Norwegians like industrialist Kjell Inge Røkke, Hagen feels he’s been the target of repeated salvos from the Labour and Socialist Left parties. He has publicly protested their tax policies, and directly challenged Prime Minister Jens Stoltenberg over the fortune tax issue. The government Stoltenberg and Halvorsen lead is up for re-election in September.
Now Hagen is becoming the latest to leave Norway for tax reasons, from sports stars to shipowners.”Think for yourself that we have a country that goes after a group of people,” Hagen mused. “What have you done wrong? You’ve paid far more tax than most people, you’ve given lots of money to charity and research and lots of things, and created lots of jobs.” Still, Hagen feels, he’s the subject of a hate campaign.
Halvorsen claimed that’s ridiculous. “Of course we don’t hate rich people,” she said. “We just think they should pay their taxes like everyone else.”
Leaders of Norway’s conservative parties said they think Hagen’s decision to move his fortune overseas is a loss for Norway. “Even though Norway is a wealthy country, we need private capital,” said Ulf Leirstein of the Progress Party. Erna Solberg of the Conservative Party, which wants to eliminate the fortune tax, said it’s a major loss when investors choose to leave the country.