Liquidity Effects of the Norwegian Wealth Tax: A study from Norway

Abstract

We use panel data provided by the Norwegian Tax Authorities to estimate the effect the Norwegian wealth tax has on dividend payments from owners of unlisted firms. Using individual tax return data from 2009 to 2016, we use a difference-in-differences model to estimate the effect wealth tax has on received dividends for households. We utilize the wealth tax policy change in 2014-15 to compare those households that shift wealth tax position to those households not affected by the new wealth tax threshold. Our main finding suggests that going from a wealth tax position to not being taxed is associated with 7.81 percent decrease in dividend payments.