Thread by @jdcmedlock

In 2022, Norway increased their wealth tax to 1.1%. In response, some high profile billionaires moved out of the country. According to a viral claim, this resulted in a net loss of revenue. Is this true?
No. Over the next two years, wealth tax revenue soared to all time highs.

To understand how the false claim came about, here is the original source calculation. It is reasonable enough napkin math, where it went wrong was in using the Guardian's claim that the net worth of emigrants was $54B USD

https://x.com/DellAnnaLuca/status/1662111892951691264

Bloomberg/Fortune cited $4.3 billion instead, and I've been able to track down the source from a Q&A with the Norwegian Minister of Finance confirming that this is the correct number:

www-stortinget-no.translate.goog/no/Saker-og-pu…

bloomberg.com/news/articles/…

If you do the rough math from the original post, but plug in the verified $4.3 billion number rather than the $54 billion claim, you get a net gain of about $100 million rather than a loss of $448 million. Contrary to the original claim, Norway is on the left of the laffer curve.

Source for the chart in the first tweet is this report from a free market oriented think tank in Norway. Also thanks to @BertAW_Russell for help navigating Norwegian stats
civita-no.translate.goog/notat/eierbesk…

This comports with more careful academic studies of wealth taxation and migration. This paper finds that while there was some effect from a similar wealth tax in Sweden, it was statistically quite small, and thus well below the peak of the laffer curve
nber.org/papers/w32153

The whole thing has been an interesting case study in how bad information spreads. A year after the original post, a company that helps people evade taxes made this nice graphic and article repeating the false claims without citing the original tweet

https://twitter.com/CitizenX/status/1797571105982681211

From there it has gone viral countless times, often without citing any sources at all. Most recently, Elon boosted it by replying to an unusual_whales post based on the same confusion

The blog post by the tax avoidance company even got indexed by google AI and served in search, providing legitimacy to the claim of lost revenue despite that specific claim never appearing in the mainstream press coverage of the issue

@ArthurBoreman Basically, it doesn’t clarify things to look at overall revenue, because it’s confounded by volatile oil prices that make up a big part of Norway’s tax base. But revenue is still higher now than before.

One response to this has been to claim overall tax revenue is down (chart 1). But this is misleading. If you zoom out (chart 2), you see that overall revenue is actually still higher now than pre-wealth tax increase. There was a peak in 2022 primarily due to oil prices (chart 3).

We will need more data to do a careful analysis of causal impacts on overall revenue. Luckily we do have the Swedish study cited up thread, which considers all taxes, not just the wealth tax, and confirms net revenue gain.
Source for previous tweet: ceicdata.com/en/indicator/n…