STAVANGER, Norway (AP) — Prosperous Norway is holding an election on Monday with inequality high on the list of concerns and the future of a wealth tax that has endured for over a century in doubt.
There is expected to be a close outcome between the center-left bloc led by the Labor Party of Prime Minister Jonas Gahr Støre, Norway’s leader for the past four years, and a right-wing bloc.
Labor wants to keep the wealth tax that has been a mainstay of Norwegian policy since 1892. Of its rivals on the right, the Conservatives want it reduced and the Progress Party, which calls for lower taxes and more immigration controls, wants it scrapped. Previously a fringe issue, it has been at the heart of this campaign.
Around 4.3 million people in the nation of some 5.6 million are eligible to vote for the new 169-member parliament, or Storting. Official results are expected on Tuesday. They are usually followed by weeks of horse-trading to form a coalition and agree on cabinet positions.
The result isn’t likely to have major implications for Norway’s foreign policy. The country is a stalwart member of NATO and a strong supporter of Ukraine’s defense against Russia.
A levy of up to 1.1% on high assets
The wealth tax is a levy of up to 1.1% on assets and shares worth more than 1.76 million kroner (around $176,000), though there are various reductions and discounts, for instance taking account of debt and property. Labor says that scrapping it would cost 34 billion kroner ($3.3 billion) per year.
The Progress Party, which leads the right-wing coalition, is calling for the wealth tax to be abolished, arguing that it is detrimental to the economy. Party leader Sylvie Listhaug argues that it penalizes entrepreneurs who might have taxable stakes in valuable companies, but little real income.
“The money paid in wealth tax could have been spent creating businesses, new jobs and more innovation,” Listhaug wrote in an email to The Associated Press.
Polls show Listhaug’s party ahead of the Conservatives, led by former Prime Minister Erna Solberg, who were the senior partner in the last center-right government from 2013 to 2021. It has been bolstered by an energetic social media campaign, driven by youthful influencers who have inspired younger voters against the tax.
“I think that young people are really unhappy about the direction that Norway is taking,” said Listhaug, citing concerns about immigration, crime, overseas aid and green subsidies as crunch issues for young voters. “The future seems less bright so they want a change.”
Sharing the wealth
Norway is one of the richest countries in the world. It has a generous welfare state, sits on billions of barrels of oil and gas, and has one of the world’s largest sovereign wealth funds, worth around 20 trillion kroner ($2 trillion). Gross domestic product per person is the sixth-highest in the world, one place above the U.S., according to the International Monetary Fund.
It is also one of the world’s most egalitarian countries, sharing its wealth much more evenly than many others — and the way Norway’s riches have been used for international aid and investment has also emerged as a campaign issue.
Many, including the Labor Party, say the wealth tax is one of the most effective levers for removing inequality. Norway is one of only three countries in the 38-member Organization for Economic Co-operation and Development, a club of rich countries, which levies a tax on net wealth.
One of its champions is the country’s most popular politician, Jens Stoltenberg, a former secretary-general of NATO. Gahr Støre persuaded Stoltenberg, who is also a former prime minister, to return to government as finance minister in February. That was followed by a 10-point bump in polls for Labor.
Stoltenberg argued in a preelection debate on public broadcaster NRK that many of the richest Norwegians would end up paying “almost nothing” if the wealth tax was scrapped.
Even in the rich country, inflation is on many minds: The Norwegian central bank says the Consumer Price Index rose 3.3% over the last 12 months – well above the bank’s target rate of 2%.
Some of the richest Norwegians have left
Some of the richest have already voted with their feet.
When the Labor government tinkered with the tax in 2022, removing some of its exemptions, it precipitated an exodus of ultra-wealthy Norwegians to Switzerland, including the richest, Kjell Inge Røkke.
Good riddance, say some Norwegians who grumble about their compatriots benefiting from a stable economy and tax funded education, then decamping instead of paying their way.
“There was a growing resentment that some rich people did not pay or take part in the funding of the welfare state as they should,” said Bernt Aardal, an election researcher and professor at the University of Oslo.
Social media bump
One of the reasons why the wealth tax has played such a role in this election is because social media influencers have focused on the issue.
The main party leaders have all appeared on Gutta (The Guys), a popular YouTube channel, which appeals especially to young men and leans against the tax.
“The funny thing is that quite a few younger voters, who are not affected by the tax, are citing it as the main issue in this campaign,” Aardal said. “So it will be interesting to see if it not only galvanizes opinion but motivates them to vote.”
