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High taxes in Norway’s social welfare state wildly unpopular

NorwegiansA recent survey found that three out of four Norwegians believe taxes were too high, and absolutely no one believed they were too low. Norway has one of the highest tax rates in the world in addition to benefiting from billions in oil revenues to pay for their social programs.

Norwegians are among the most heavily taxed people in the world, and that in turn has made Norway one of the most expensive countries in which to live. Most accept the taxes they’re ordered to pay on income and even net worth and property, but growing numbers are publicly complaining about sky-high taxes on everything from cars to fuel to consumer goods.

Norwegians differentiate between skatter (taxes) and avgifter (duties, fees or user taxes) and the latter is the most hated. They’re what causes a glass of house wine at an Oslo restaurant to cost the equivalent of nearly USD 16, or a gallon of gas to cost nearly 9 dollars, triple currrent US prices.

“It’s clear that taxes are much too high in oil-rich Norway,” Oslo resident Gro Pettersen told newspaper Aftenposten. “It’s sick!”

The taxes placed on new cars, which can more than double the price of the car itself, are another bone of contention, even though most Norwegians support measures to protect the environment. “The car tax is much too high, but so are most all the other avgifter also,” said Ernst Bendiksen of the northern city of Vadsø, where Norwegians are far more dependent on their cars than those living in cities with good public transit systems. “We certainly don’t get anything in return for them.”

A study conducted by research firm MMI for the Norwegian Tax Payers Association (Skattebetalerforeningen) showed that the most hated taxes are those on new cars and a transfer tax levied when real estate changes hands. The so-called dokumentavgift on real estate transactions, which implies that it’s meant to cover the costs of property registration, costs homebuyers around 2.5 percent of the purchase price.

The study also showed that 67 percent of the population think Norway’s inheritance taxes are too high, while 63 percent think fuel taxes are too high. Norway’s hefty 25 percent VAT (like a sales tax) on nearly all consumer items is considered too high by 53 percent of the population.

Only 32 percent, meanwhile, believed tobacco taxes are too high, while 44 percent believed liquor taxes are too high.

The user taxes, or avgifter, are also unpopular because they’re largely regressive taxes that hit people with low incomes much harder than those with high incomes. Filling the car’s gas tank, and paying the taxes that requires, is much more expensive for someone earning NOK 300,000 than it is for a car owner earning NOK 900,000.

The head of the tax payers’ association, Jon Stordrange, said he thinks user taxes should be adjusted to reflect actual costs inflicted on society. “Then I think people would have more respect for the system,” he said.

Social programs like universal health care and generous welfare systems have enormous costs and few Americans would be willing to pay double for cars, alcohol, gas and day to day items – would you?

Each year, oil revenues oay out dividends to qualified Norwegian residents—$919.84 per person. Last year, the fund injected about $581 million into the state’s economy. Virtually all of Norway’s oil comes from off shore drilling, so that would be wildly popular with environmentalists. For 2005 and 2006, Norway’s net oil export revenues were forecast at about $46 billion each year.

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Posted By: Jerome Aronson

News Category: Political

 

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