The government’s proposal to introduce ground rent tax on fish farming has been met with strong reactions from the industry. The farming companies Lerøy and Salmar – both of which have recently paid billions in dividends to their owners – have sent layoff notices to hundreds of employees, partly because of the proposed ground rent tax. But if you read the companies’ press releases, it is not the basic income tax in itself that they are arguing against. The criticism is primarily aimed at one of the government’s proposals for practical implementation, the so-called standard price rule: The income from the sale of salmon is thought to be calculated based on prices on the Nasdaq stock exchange, not the sales price the company actually receives. The purpose is to prevent people from escaping tax by selling the fish cheaply to themselves, since several companies engage in both farming and processing. The companies seem to think that the standard price, as it is designed, will cause major, unintended problems. If so, they should immediately propose better solutions. A well-designed basic income tax gives no reason to lay off employees. It works roughly as if the state steps in as a passive investor: the state covers its share of investments and running costs, and in return receives its share of the income. Such a tax does not change which projects are profitable or unprofitable – it only changes the distribution of the profits when things go well, and of the losses when things go bad. A basic interest tax can actually be to the company’s advantage if things go badly. Because the state covers part of the investments, funds are freed up which the company can invest elsewhere. This advantage is of course offset by the fact that the state also takes its share of the income. But the disadvantage overshadows the advantage only if the investments pay off unusually well. A well-designed ground rent tax is therefore little to fear for the employees and the local community. If the yield is high, the owners get paid well enough even when the state has taken its part. If the yield is low, the state shares in the loss. But in the farming industry, the return will often be particularly high. That’s because the industry benefits from a limited number of permits to exploit our shared natural resources. Therefore, Norwegian fish farming has given rise to some of the country’s largest private fortunes. And that is why we need a basic income tax. The breeders have already been allowed to operate without ground rent taxation for many years. The community has missed out on large amounts of income, while some have earned a fortune. Such accumulation of private wealth also shifts the distribution of political power: An extraordinarily profitable industry not only has a lot to defend, but can also afford to engage in intensive political lobbying to get what it wants. We have also seen this in the oil industry: When the industry’s privileges are threatened, the power of lobbying is used. The government’s proposal is now on consultation. The industry should promote its views there. A standard price can be designed in various ways, and perhaps a debate is needed on the details of the salmon tax. However, a well-designed ground rent tax on fish farming is no threat to the population along the coast. On the other hand, it provides a fairer distribution of the gains from the exploitation of the community’s natural resources.
ttn-69
Basic interest tax does not take people’s jobs away – Statement
