Sunday, September 25, 2005

- Have to increase taxes

To finance increased government spending, the new socialist will have to increase taxes, according to professor at the Norwegian School of Economics, Guttorm Schelderup. He claims that "Taxing the rich", as Labour and Socialist Left has named their source of income, will not raise enough money.

The top tax bracket i Norway is 65% tax on all income above NOK800,000 (US$124k). Decreasing the limit and increasing the tax would bring in NOK0.5bn, compared to the NOK6bn the new government wants to increase the taxes by.

Most likely, the government will have to add more taxpayers to the top tax bracket, which is currently 49.5% on all income above NOK400,000 (US$62k). By decreasing the amount where the tax starts, the new government will add 70,000 new taxpayers to the tax bracket.

35% of all Norwegian taxpayers already hit the 49.5% tax level, intended to punish the richest.

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