Net income still evenly distributed

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The global finance crisis hasn’t had much affect on Norway’s relatively even distribution of income. Fully 90 percent of all Norwegians earn less than NOK 450,000 (USD 75,000) per year, according to an examination of the country’s most recently filed tax returns.

Most Norwegians report relatively modest income. PHOTO: Views and News

The remaining 10 percent reporting higher net incomes could claim a third of the country’s collective income last year, but their stake slipped a bit during the finance crisis while those with relatively modest incomes grew.

Analysis firm and collection agency Lindorff has gone through all personal tax returns filed for 2009 and just made public two weeks ago. Lindorff’s examination, according to newspaper Aftenposten, indicates that total income in Norway is divvied up pretty much the same way it was before the finance crisis hit in 2008.

Norwegians’ average net income, after tax, amounted to NOK 235,249 (just under USD 40,000). Average taxable net worth per taxpayer amounted to NOK 391,974 (about USD 65,000).

The study shows that Norway’s distribution of income remains among the world’s most evenly spread and steady. That meshes well with recent international surveys that have ranked Norway as among the world’s most prosperous countries with the greatest potential for human development.

It also meets long-term political goals in Norway that no one should be too rich or too poor, rather that the vast majority should earn about the same. A long line of governments has attempted to keep the gap between rich and poor as narrow as possible.

Only 10 percent of the Norwegian population earns more than NOK 457,200, according to the Lindorff study. Half of the Norwegian population earns between NOK 145,400 and NOK 457,200. All figures were in terms of net income, which includes all sources of income minus all deductions.

Those in the top 10 percent income-wise paid 40 percent of the nation’s personal income tax. The majority of Norwegians pay around 35 percent of their gross income in tax, but other taxes like Norway’s 25 percent sales tax on most goods and services (VAT) and punitive taxes on such things as cars, fuel, tobacco and alcohol raise the overall tax burden in Norway.

Views and News from Norway/Nina Berglund
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