Red-green tax cut provides more power than blue, believes expert committee – Aftenposten

– Our main estimates show that a reduction in corporation tax has far greater impact on business investment in mainland Norway as a whole, than the corresponding changes to the dividend tax and wealth tax, according to a new report Finance Minister Siv Jensen (FRP) was handed on Monday.

The calculation assumes that:

• To cut corporation tax by 1 percent gives 0.48 percent or 1,334 million in increased investments.
• Reducing dividend or capital tax equivalent gives 0.06 per cent, or 156 million in increased investments, or only 12 percent of the impact of cuts in corporate tax.

The report is compiled by research company Menon, and was handed over by partner and researcher Leo A. Grünfeld.

When the blue government in winter cut capital tax to 0.85 percent, argued Siv Jensen that there were “more profitable to invest in Norwegian workplaces – by reducing wealth tax”. Today’s report shows that there are greater investment by cutting corporate tax – such Johnsen (Ap) did in his time as prime minister.

– Must be able to do several things at once

– All indications are that there is a positive correlation between tax cuts and increased investment. The findings are clear, but there is considerable variation, precisely because we have variety in ownership and structure, says Siv Jensen in the handover of the report.

– Does not this show crystal clear that by far the most effective treasure to use when to increase investment in business income tax (corporate tax, editor.)? Wealth tax provides almost nothing. Why do you put so much emphasis on wealth tax then?

– Now I put myself into the report. I hear what Grunfeld says the impact of the various treasures. The corporation tax because it hits all businesses, regardless of ownership. Wealth tax that only provides power for Norwegian owners, and no effect for companies with foreign owners, the dividend tax for other types of businesses. I believe we must be able to do several things at once. This is not an either or question, it is a both and issues. The sum of this we must consider when we come with our recommendations to parliament in the autumn, responding Siv Jensen.

Cut can provide increased investment

– I note that Menon like Tax Committee mean lower corporate tax will stimulate increased investment in Norwegian industry. This takes the government with further in dealing with the message about tax reform to be submitted to Parliament this autumn, says Jensen.

Menon received in April mission from the Ministry of Finance to consider how different taxes affect business investment. The main outcome of the report is that lower taxes, particularly lower corporate income tax, will encourage increased investment.

Right says tax cuts seems

Conservative financial policy spokesman Svein Flåtten choose to focus on that Menon believes tax cuts has an effect, rather than the cuts in corporate tax stimulates more than cuts in capital tax.

– Those who have argued that tax cuts do not create economic growth and jobs is now thoroughly parked. It will be interesting to see how they relate to it in the public debate and with their suggestions when a tax reform to be discussed, writes tick in a press release sent out by the Conservative Party in the aftermath of the presentation.

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Published: 17.aug. 2015 9:58