Discussion Papers no. 474

The Norwegian case

The Achilles heel of the dual income tax

The dual income tax provides the self-employed individual with large incentives to participate in tax minimizing income shifting. The present paper analyses the income shifting incentives under the Norwegian split model in the presence of technology risk, and it concludes that the widely held corporation serves as a tax shelter for high-income self-employed individuals. In addition, real capital investments with a low risk profile are means to shift income from the labor income tax base to the capital income tax base for the high-income self-employed.

Om publikasjonen

Tittel

The Achilles heel of the dual income tax. The Norwegian case

Ansvarlig

Annette Alstadsæter

Serie og -nummer

Discussion Papers no. 474

Utgiver

Statistics Norway

Emne

Discussion Papers

Antall sider

24

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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