Taxing Entrepreneurial Wealth: Evidence from Norway, 2021–2025

The Norwegian government introduced a wealth tax on net worth exceeding 1.9 million NOK (approximately $220,000 USD) in 2021. The tax rate is 0.7% on the amount exceeding 1.9 million NOK and 1.1% on the amount exceeding 5 million NOK. The tax is levied on net worth, which includes financial assets, real estate, and other assets, but excludes primary residences and retirement savings. The study examines the impact of this tax on entrepreneurial wealth between 2021 and 2025. The researchers found that the tax had a positive effect on the wealth distribution, with the top 1% seeing a decline in their wealth share. However, the tax also led to a decrease in entrepreneurship, with a 10% decline in the number of new business registrations. The study suggests that the tax may have discouraged entrepreneurship, particularly among the most wealthy individuals.