Previous research has shown that the Norwegian shareholder model and participation exemption in combination make it profitable to save through the company both when the return is safe and uncertain, and when the investor can invest in portfolios of safe and uncertain assets. The reason is that the Norwegian shareholder model gives rise to a tax credit if dividends are deferred making it profitable to invest through the firm rather than as a personal investor.

In this project the research question is whether previous results still hold when one takes into account that an investor has to pay a wealth tax? Bjerksund and Schjelderup show that the interest rate used in the Norwegian shareholder model should be reduced by the wealth tax for neutrality to be preserved. This results hinges on that the tax system is fully symmetric and that the risk free interest rate used in the shareholder model is equal to the risk free rate that investors can borrow against.

As they point out, neither of these assumptions hold the real world. They then discuss different policy options related to the taxation of shareholders in Norway to correct for the lack of neutrality and symmetry in the tax system.

Bjerksund, Petter, and Guttorm Schjelderup: Investors utbyttebeslutning og formuesskatt, Samfunnsøkonomen, 2022, 136(2), 27-34.

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