An important guiding principle for the tax system in Norway is that the tax system should not affect which investments are undertaken and how businesses are organized. This principle, often called the efficiency principle, is intended to ensure that money flows where the return before tax is highest in order to promote economic growth. Another principle is linked to distribution policy, where the principle of ability to pay tax is central. The ability principle states that one should pay tax according to gross income levels, and that those with the highest incomes should pay a higher share of tax measured by tax payments divided by gross income. 

Norwegian media, policymakers, and academics have been concerned over that shareholder taxation in Norway has favored the rich and that the shareholder model affects how businesses and savings are organized. In a recently published article in Samfunnsøkonomen, Petter Bjerksund and Guttorm Schjelderup calculates the value of the tax credit that arises due to the shareholder model and the exemption method and discusses the way forward for Norwegian capital taxation. They show that the tax credit is substantial using the same method as employed by the Norwegian petroleum fund. Another important result is that participation exemption and the shareholder tax in Norway favors existing firm over new start-up firms.

Bjerksund, Petter, and Guttorm Schjelderup: Aksjonærmodellen og fritaksmetoden: Et to-hodet troll? Samfunnsøkonomen, 2021, 135(4), 53-63.

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