Norwegians’ most-hated taxes
July 14, 2011
Heavy taxes tied to their homes and their cars have emerged as the most hated by a majority of Norwegians, according to a new study by a national taxpayers’ organization (Norsk Skattebetalerforening). So intense is the criticism that even some of the country’s most socialist-oriented politicians are considering reform.
Norwegian Broadcasting (NRK) led its morning newscasts Thursday with the results of a new survey conducted by research firm Synovate for the taxpayers’ group. It found that Norway’s sky-high taxes on new cars and fuel, and one imposed on the purchase of a new home, are the most unpopular.
Fully 70 percent of those questioned believe the tax on new cars (which can amount to more than 100 percent of the actual price of the car) is too high, as is the tax on fuel. Even though Norway is an oil-producing nation and has benefited greatly from high oil prices, Norwegians now pay as much as NOK 15 per liter for gasoline (petrol) at the pump, which amounts to around USD 11 a gallon.
The dissatisfaction with fuel and car taxes has risen in the past year, along with the cost of filling the tank. The taxes are fueled by politicians who want more Norwegians to use public transportation, but many remain dependent on their cars in rural areas and their costs have skyrocketed.
The most-hated tax, though, is what’s rather innocuously called the “dokumentavgift,” a documentation fee that the buyer of a new home must pay when he or she reports the purchase to state authorities. It comes in addition to relatively nominal fees for obtaining title to the property.
The dokumentavgift amounts to nearly 3 percent of the purchase price of the home, however, meaning it can cost the homebuyer tens if not hundreds of thousands of kroner. Its legal description as a “fee” is scoffed at by most Norwegians, who often call it a “moving tax” for which they receive very little in return.
The car and “moving” taxes generate billions every year for the state treasury, which help pay for Norwegians’ medical care, schooling also at the university level, and a host of other state welfare services. But now even Heikki Holmås of the Socialist Left party (SV) says he “understands that folks are reacting.” He’s willing to propose an eventual phase-out at least of the “moving tax,” because “folks view it as unreasonable.”
Reform via replacement
His party remains committed to maintaining high taxes on cars, still widely viewed as a luxury item in Norway, and Holmås quickly noted that any phase-out of the “moving tax” would require replacing it with other taxes. He said he’s tempted to further boost already-high taxes on tobacco and alcohol.
Even though tobacco tax means a pack of cigarettes now costs around USD 16 in Norway, only 40 percent of Norwegians questioned think that’s too high. A majority also seems resigned to high taxes on beer, wine and liquor, even though many continue to drive over the border to do their shopping in Sweden where prices are lower.
Many Norwegians also still claim that “they pay their taxes with joy,” because of the high level of welfare services they receive in return. “It’s important to listen to folks,” Holmås said in deference to the survey results. “We depend on widespread acceptance of our taxes. Then it’s important to see which ones are most unpopular, and which ones folks understand that they pay.”
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