The mother of small children, Jenny Lund, lives in Mysen in Østfold with her husband and three children. She is a leader in Moneypenny, which is Norway’s largest financial network for women. The network has close to 42,000 members on Facebook – and aims to give women more confidence about financial matters. Jenny has worked reduced hours for several years in order to be able to spend more time with the children while they are small. It has been a conscious choice. She says she knows she wants to be a minimum pensioner, and has therefore for many years saved a little each month in mutual funds – to have for old age. But when the gains on the savings are one day taken out of the account, there will be less left for her. For the red-green government, the tax on fund savings has increased by almost 20 per cent in one year and two state budgets. Jenny Lund works with Moneypenny in her spare time, and has finance as an interest and hobby. The Facebook forum is the country’s largest women’s network for those interested in finance. Photo: Johan B. Sættem Everything indicates that the proposal will receive a majority in the Storting. The government’s support party SV is even more concerned with “taking the rich” than the Labor Party and the Center Party. And the rich, they own stocks. If anything, the share tax will probably be even tougher after SV has had its say. About Norwegians’ savings and tax on shares and funds During the last two state budgets, the red-green government has increased the tax on dividends and share income from 31.68% to 37.84%. In practice, this means that the state takes 19.4 per cent more of what people earn from their share savings now, than in the income year 2021. The tax increase affects, for example, extra savings that those with a defined contribution pension save in addition through their pension provider, when the gains are gradually withdrawn in the future . The increase in dividend tax came into effect immediately in connection with the presentation of the national budget, in order to avoid tax adjustments. Formally, the share tax is not adopted until a majority in the Storting supports it. The government’s preferred budget partner, the Socialist Left Party, supports the increase in share tax, and if anything will probably demand that it be even higher. The tax increase affects all persons who now or in the future make money when they sell individual shares or shares in ordinary mutual funds and combination funds with a share share of more than 20 per cent. Or receive dividends as a private person. For gains on shares and funds placed in a share savings account, tax must be paid in the income year in which the gain is withdrawn from the share savings account. In comparison, the tax on interest income from bank savings and interest funds is 22 per cent. According to Vff’s population survey increase from the summer of 2022, 44 per cent of Norwegians had shares in open equity funds. Open mutual funds are ordinary mutual funds, where the money is not tied up. At the end of 2021, there were 856,441 people who owned shares in Norway. This is 30 per cent more since the share savings account was introduced in autumn 2017. The share savings account scheme was supposed to stimulate share savings, and make it easier to save long-term in shares and funds. By the end of 2021, just over 1.5 million employees in the private sector had a defined contribution pension. Of these, over half a million had the minimum scheme, where the employer pays 2% of the salary into an annual pension. Sources: Statistics Norway, table 06959, NOU 2022:7, Population survey 2022, Verdipapirfondenes forening, Swedish Tax Agency, SV, news But Jenny does not feel very rich. – In a way, it actually affects those who have less money. Because where should they put money so that they will grow? What products are they? Where is it? It’s a fund. The tax increase hits small savers harder than the wealthy, she says. – Do you think the state is greedy? – Yes absolutely. I think it’s greedy to take such a large part of the pie. It seems as if there has been a rush to take the rich. And then people have forgotten that there is something called small savers too, says Jenny. – When you try your best to secure yourself and save money. Then you should be able to keep your return in line with savings in the bank, she says. – It is completely incomprehensible that the Labor Party is in favor of this. It affects ordinary people, says Thore Johnsen, professor emeritus of finance at the Norwegian School of Economics. Photo: Helge Skodvin / Helge Skodvin But it is not like that. The tax on interest income from bank savings is 22 per cent. At the same time, the government wants the share tax to rise to almost 38 per cent with immediate effect. – They must almost feel cheated, who have gone into shares, which has also been recommended by politicians that they should do. I have to say that I am amazed, says professor emeritus Thore Johnsen at the Norwegian School of Economics in Bergen. He believes that the sharp increase in share tax is very unfortunate, and is particularly surprised that the Labor Party can support this – because it creates uncertainty in the economy about what the government might come up with next. Before the weekend, the Labor Party did not have the opportunity to be interviewed about the matter, and referred to the Ministry of Finance for answers. Finance Minister Trygve Slagsvold Vedum says that the point of the tax increase is that those who have the most must contribute more. He would rather measure the increase in percentage points, instead of how much harder the tax actually hits. – We don’t want to take the rich, the point is that those with the strongest backs must contribute more. Therefore, we are increasing the dividend tax by approximately 6 percentage points. Then we give a tax cut to everyone who earns less than NOK 750,000. For example, a family where both earn approx. 500,000 will then receive approximately NOK 8,000 in tax relief. It is a priority, says Vedum. – We Photo: Kai Rune Kvitstein / news The Minister of Finance also points out that the government has continued the scheme with Individual Pension Savings (IPS), which gives tax deductions for contributions to a pension. But this is a very inflexible savings scheme, compared to mutual funds. Under the red-green government, the annual maximum savings amount has also been cut from 40,000 to 15,000. – But Vedum, haven’t you understood that when you increase the dividend tax, you hit absolutely everyone with mutual funds and most combination funds? Almost 1 in 2 now save in mutual funds, and when they take the profit out of their share savings account, does the state supply itself with 20 percent more of the profit now than a year ago? – There is no doubt about the distributional benefit of what we do, when we give tax cuts to everyone who earns less than 750,000. There is a very clear distribution profile on this, and the large dividend income for the state comes from those with the absolute highest incomes. They have to pay a good deal more in taxes. And then there is an increase of 6 percentage points and not 20 percentage points, which you can get the impression of when the question is asked that way, says the finance minister. Thore Johnsen at NHH has for several decades been one of the driving forces in the development of finance as a research subject in Norway. He has been referred to by Finansavisen as a legend in the field, and calculates in the same way as news. – When ordinary people have now become dependent on saving in shares for their future life, it is absolutely terrible that you increase taxes in that way, says Johnsen.
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– Hits the small savers harder than the wealthy – news Norway – Overview of news from different parts of the country
