The rich are getting richer, but income still evenly spread
November 8, 2011
New statistics suggest that the wealthiest Norwegians have secured their spots at the top of the income scale, not least because of bigger stock dividends paid out last year. Norway, however, continues to boast among the most equitably distributed overall personal income in the world.
Statistics compiled by financial rating company AAA Soliditet for newspaper Aftenposten show that the top 1 percent of Norwegians earning the most in Norway are now farther ahead of the other 99 percent, with collectively around NOK 7 billion more in adjusted net income for 2010 than they had the year before.
Their spot on the net income ladder, which AAA Soliditet calls Trinn 99, now stands at NOK 1,224,300 per year (USD 223,000), meaning that 99 percent of the rest of Norway’s 3.5 million taxpayers reported lower net income than that.
Little disparity among the majority
The gap to the next level, Trinn 90, represents the top 10 percent in terms of net income and now stands at NOK 485,500. That means, according to AAA Soliditet, that 90 percent of Norwegians reported adjusted individual net income below that figure. From that point, the various levels (or trinn) on the ladder come much closer together, indicating a lack of wide income disparity among the vast majority of Norwegians.
AAA Soliditet, which delivers credit and business information to private clients, based its findings on the net income figures reported on individual Norwegians’ most recent tax returns for 2010. The figures include all forms of income minus all forms of deductions including interest paid on loans, normally an individual’s biggest deduction.
The company divided the total number of taxpayers into 10 equal parts based on their reported net income. Those at the bottom of the scale mostly represent students who have worked little at paying jobs. The figures also represent individual, not household income, because of the lack of joint tax returns in Norway, so low net income amounts don’t necessarily reflect a poor lifestyle. One spouse reporting little if any income may indeed live well, if the other spouse has a high income, while students may live with their parents or live off student loan proceeds.
Higher dividend income
The firm’s number-crunching showed that the top 1 percent could claim fully 9.3 percent of all net income earned by private persons in Norway. That compared to 8.7 percent of Norway’s collective personal net income in 2009, with the higher share now amounting to around NOK 7 billion more and attributed to higher dividend income in 2010. Calendar year 2009 was affected by the crashing stock markets that followed the onset of the finance crisis in 2008, noted Aftenposten.
Jon Epland, a senior adviser at state statistics bureau SSB (Statistics Norway), stressed that high rate of employment in Norway, collective bargaining agreements, a strong welfare system and a tax system aimed at equalization makes income distribution among the most evenly spread in the world. Those over age 50, however, are now taking a steadily larger slice of the overall income pie, largely because of higher salaries, higher pension payments and higher income from investments.
Views and News from Norway/Nina Berglund
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