Abstract
Sørensen (Int. Tax Public Finance 12(6):777–801, 2005) gives an in-depth account of the new Norwegian Shareholder Tax, which allows the shareholders a deduction for an imputed risk-free rate of return. Sørensen’s positive evaluation appears as reasonable for a closed economy where the deduction for the imputed return is capitalized into the market prices of corporate shares. We show that in a small open economy where no capitalization occurs, the Norwegian shareholder tax is likely to leave the distortions caused by the corporate income tax unaffected, and to add new distortions to shareholders’ portfolio decisions.
Similar content being viewed by others
References
Agell, J., Englund, P., & Södersten, J. (1998). Incentives and redistribution in the welfare state, the Swedish tax reform. New York: MacMillan.
Andersson, K., Kanniainen, V., Södersten, J., & Sørensen, P. B. (1998). Corporate tax policy in the Nordic countries. In P. B. Sørensen (Ed.), Tax policy in the Nordic countries. New York: MacMillan.
Apel, M., & Södersten, J. (1999). Personal taxation and investment incentives in a small open economy. International Tax and Public Finance, 6(1), 79–88.
Auerbach, A. (1991). Retrospective capital gains taxation. American Economic Review, 81, 167–178.
Auerbach, A., & Bradford, D. (2004). Generalized cash-flow taxation. Journal of Public Economics, 88(5), 957–980.
Boadway, R., & Bruce, N. (1992). Problems with integrating corporate and personal income taxes in an open economy. Journal of Public Economics, 48(1), 39–66.
Bond, S., Devereux, M., & Klemm, A. (2007). The effects of dividend taxes on equity prices: a re-examination of the 1997 UK tax reform. Oxford University Centre for Business Taxation, WP 07/01.
Devereux, M., & Freeman, H. (1995). The impact of tax on foreign direct investment: empirical evidence and the implications for tax integration schemes. International Tax and Public Finance, 2(1), 85–106.
Johansson, S.-E. (1961). Skatt, investering, värdering. Stockholm: Norstedt (in Swedish).
King, M. A., & Fullerton, D. (eds.) (1984). The taxation of income from capital—a comparative study of the United States, the United Kingdom, Sweden and West Germany. Chicago: University of Chicago Press.
Samuelson, P. A. (1964). Tax deductibility of economic depreciation to insure invariant valuations. Journal of Political Economy, 72, 604–606.
Sinn, H.-W. (1987). Capital income taxation and resource allocation. Amsterdam: North-Holland.
Södersten, J. (1982). Accelerated depreciation and the cost of capital. Scandinavian Journal of Economics, 84(1), 111–115.
Sørensen, P. B. (2005). Neutral taxation of shareholder income. International Tax and Public Finance, 12(6), 777–801.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Lindhe, T., Södersten, J. The Norwegian shareholder tax reconsidered. Int Tax Public Finance 19, 424–441 (2012). https://doi.org/10.1007/s10797-011-9195-7
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10797-011-9195-7