Should we worry about unpleasant discharge?
No-r-(f🥗cking)-way
I don’t want to sound conceited, but I’ve been on the World Wide Web1 for a few years now, so I know some things about it.
And one thing I noticed is, if you want lots of engagement and comments and likes on something, the key is to pick on minorities.
After all, that’s just good maths, right?
So today I’m going to find a minority to pick on! I'm really gonna plant an unquenchable fire in the bellies of the talkbackocracy!
One of the things that prompted this wealth series was a campaign announcement by a local political party about wealth taxes, as we head towards an election later in the year. Given how hard these things are to get traction on, I should say I think they did a pretty good job of appealing to a wide constituency.
Regardless, if you’ve read the first piece in this series, you’ll be unsurprised to know that this wealth tax proposal was met with angry and vocal pushback from an (apparently) large portion of the population; despite the proposed new tax category impacting roughly 0.7% of people, and the large majority of people being offered a generous tax cut from it.
Don’t panic, I’m not going to promote or defend, or even link to, this specific wealth tax plan, because many bloodied-and-beaten words have already been sacrificed in those causes.
This is my show, so I’m sure you’re here for the takes, not the takeaways!
However, one thing that happens whenever you put out a policy that benefits the large-but-largely-powerless majority, at the expense of the tiny-but-powerful minority, is a consolidated effort by every cockroach, grub and worm to crawl out and write opinion pieces in our large newspapers and do talking-spots on our national TV and radio stations.
And, as I like to give credit where it’s due, I’ll say the cockroaches and worms are pretty darn good at all staying on collective message2
So, today we’re going to talk about one of their talking points:
The ‘Wealth Discharge’ narrative.
I mean, no-one calls it that. I just like the word ‘discharge’ in that context, because it sounds like a medical euphemism for diarrhoea, or puss from an open wound…
What I’m talking about here is the fear that all the wealthy people will pack up and leave our “overtaxed” country, taking their lavish spending and job prospects with them!
I got thinking about this because another writer (and occasional pundit) I admire,
, was recently on a panel radio show and talking about this proposed wealth tax, while a ghoul from the (conservative) opposition political party was being interviewed. She pulled out all the standard lines about “punishing hard work”, and bemoaned a wealth tax as a “costly administration nightmare”3. But she also pointed out what a “failure” wealth taxes always are—based on overseas experience—because wealthy people just shift their wealth and themselves out of the country where it can’t be taxed.Now, if you know anything about the US tax system, you’ll know that we don’t have to put up with any of that shit, because they don’t: If you’re a US citizen earning a US income overseas, or you’re a non-US citizen earning money in US investments, they most certainly will tax you, thanks very much!
But, she wasn’t talking about the US. She was talking about Norway.
Norway is an interesting spot—literally on the opposite side of the world of course, but otherwise similar in land area and population to New Zealand. They’ve got some nice fiords like us, and similar crime and happiness (however you measure that!) statistics.
They also have higher average household incomes, better community health outcomes, and better productivity per capita. And, they also have significantly higher taxes than NZ.
All that is to say, they pay more tax but also get to live better lives in several key respects.
I’m not going to debate whether higher taxes are the direct cause of any of this—Norway also have some geographic advantages (hello, Europe!), and a huge sovereign wealth fund built from excessive fossil fuel extraction which, it’s fair to say, we’re now collectively having some ‘discussions’ about the consequences of… So, there’s some subtlety there.
In any case, if this is still confusing for you, you should know that taxes do absolutely need to exist. They need to exist to ensure money has value and motion in an economy. Plus, they are very helpful for incentivising and disincentivising behaviours that benefit us all.
Taxes, however, don’t need to be high to be effective. They just need to be sensibly applied. And, especially now, rapidly adaptable—unencumbered by uncertain future decades of political bargaining and compromise. Because, for example, if we give businesses the choice between investing in robot labour and earning a 10% ‘innovation subsidy’; or investing in human labour and paying an additional 30% income tax cost, we probably will need to find something else to tax to pay for the development of a Mr. AI bulldozer™. Because, we'll need to buy something to clear crowds of homeless people, who would otherwise clog up our city streets in the near future.
Anyway, back to Norway.
Norway are one of just a handful of countries that currently tax wealth. And they recently even increased those wealth taxes a little, apparently causing an exodus of ultra-rich people. This begs a number of questions:
How many people left?
Maybe 30 or so, according to the Guardian newspaper. Although, net migration still remains positive and pretty stable in Norway, at around 5-in-1000 (in order words, a ratio of roughly 25,000 : 30).
Where did they go?
Mostly next door or down the road; a barely-time-for-breakfast private-jet-hop’s distance away, in Europe.
What is the cost of their packing-up-their-toys-and-fucking-off?
Hard to know for sure. That Guardian piece puts it at “tens of millions”, but let me put that in perspective for you:
Roughly 1.9m people are employees in Norway, earning an average of US$30/hour, and paying an average of 36% in tax. So, if you increase the average wage by just 10 cents an hour, you immediately bring in over ten million dollars more in tax EVERY MONTH.
Now, I’m largely pulling numbers out of my arse; I know raising the income of an entire population by even 0.3% is not ‘easy’, but the point of this piece is to get you thinking about scale and possibility, rather than getting distracted by panicked-opinion concerning a small minority.
I think there’s a couple of things to be considering when we worry about wealth taxes and the rich people balking at them.
The first is: “Is it a real problem?”
You may have read this as “is this actually a real problem that is happening?”; or “is this a real problem for our nation?”
If we take the opposition-politicians and sycophantic ‘journalists’ at their word, then the answer to the first question is an energetic “Yes!”
But, on the second question, who really cares if a billionaire leaves the country? Only their close friends and family, right? We don’t know these people—they mostly just monopolise heaps of our land, fuck around in our politics, and their faces help sell trashy magazines. What we’re interested in is their money.
Fuck me. Imagine the knowledge of that suddenly dawning on a billionaire!
Sure, short term, some jobs might be lost and some charities might run tight budgets, and that will be frustrating and sad. But the whole point of a healthy, educated, and connected economy is it shouldn’t suffer long. A portion of those made redundant will set up new businesses, or free up other labour participants by becoming stay-home carers or parents.
There will be some people who are quick to point out how Norway’s tax take has, coincidentally, dropped a little since this wealth tax announcement. So, it’s only fair for me to make the point right back, that it’s only dropped when you compare it to the record high taxes they were taking in, because fossil fuel profits increased by THREE TIMES due to the Ukraine conflict (these are now settling back down). Let’s stop pretending that a few grumpy rich shits who throw their toys are responsible for the bulk of the tax in a country, because they are not, and neither should anyone want them to be! A functional economy, like Norway’s, is built out of good education and healthcare. That’s what allows it to be resilient and recover.
It is not built out of billionaires.
We have this weird idea that the ultra-wealthy are rare diamond-bejewelled unicorns we need to keep nearby. They are not. The ultra-wealthy are mostly like you or me, only with opportunity (read: time, education, rich parents, connections etc), luck, and a drop or two of asshole (feel free to call it ‘ambition’ if it makes you feel better).
Ultra-rich people are nowhere-near as smart as we give them credit for. Not so long ago, the world’s richest guy literally lost more wealth than the combined total of the 200th-1000th richest guys in one transaction… Dick-shaped rockets, failed marriages, paedophilia, conspiracy theories…
They’d much prefer you to think of them as unicorns.
This is more of the wealth magic at play. But it’s sleight-of-hand, because what actually happens in a functioning economy is, when a monopolising ultra-rich person leaves, it opens up a gap for a bunch of ambitious new people to step up and innovate again.
Actually, I should stop even describing this as an ‘economy’ thing; this is a Civilisation thing.
We sometimes lose faith that civilisation functions in this way, but it actually does… We’re just sometimes scared to put that faith to the test.
We actually do need to trust the system though. Because, if you find you have so little faith in the democracy we’ve arrived at, and honestly believe a tiny handful of rich people can hold a country to ransom, we have much bigger concerns than a few lost jobs!
To be clear: Our well-being does not depend on ‘oversized’ people or organisations; their well-being does!
These people and their corporate identities suck the oxygen out of the room. We’re left with this flawed presumption that they are the only ones who can create jobs and innovate… So much so, that we barely even notice they are so insecure they spend millions lobbying and monopolising to keep jobs from being created by other people.
Again, should billionaires—that is, individuals who are apparently able to hold a whole country to ransom—exist?
Which brings me to the next question: “Why were they here before the tax was announced?”
This is really a question more for the ultra-rich than for you… although, if you’re in that ‘ultra-rich’ category and are reading this…
…But also:
Hi Billionaire,
Presumably you like living here?
You have friends, family, and a nice view from your bathtub… The waffles at the place down the road are amazing!
You have more than enough money to buy anything that’s for sale. So, are your life goals now really just about extracting the next billion?
Real talk. Are you… broken?
Money is a social construct. It’s made up. I’m sorry to say, you will die and you won’t be able to take your money with you.
Honestly, just live your life, dude.
This is all to say, anyone who has more money than even their next six generations of useless-munter-grandchildren will be able to blow on cocaine, NFTs, and prostitutes, is not really leaving the country they called ‘home’ because of a “1% wealth tax!”
They’re obviously bored of Norway, or had a falling-out with the local rubbish collector, or want to live closer to their kids, or whatever… They’re looking for a change, and the tax thing is just an excuse. That’s fine—but let’s not let them off the hook! These are people who regularly spend hundreds of millions of dollars on yachts and holiday homes and private jets: They are more than happy to spend money to live in a particular space; they could easily afford a few extra million to live in Norway if they wanted to.
Any wealth tax applied in New Zealand, or anywhere else, works the same way. Some entitled people will choose to sink their millions into relocating to Australia or Switzerland or wherever, instead of just paying the tax. But they can’t take New Zealand or Norway with them, so they’ll be blaming a tax they can afford; but leaving for other reasons.
Change is coming—the polycrisis of climate and refugees; AI job-disruption and political unrest; finance shocks and pandemics; deep fakes and quantum-computer password decryption… Countries are going to need to tax high and spend liberally, or disintegrate.
Eventually, the only places rich people will be safe are places that don’t make them happy; in gated communities on corrupt nations, surrounded by some combination of misery and even-more-unbearable rich assholes.
If these people want to go, trust in civilisation and let them go. They are a minority and will be replaced.
You know what makes you feel more lucky? The realisation you're holding a lot more lottery tickets than you thought.
-T
Me, and the other cool kids, call it the “dub-dub-dubs”
I don’t want to give them too much credit. They do make it easy on themselves by basically keeping their ‘message’ a simple variant on: “Sure, you’re poor now. But, if you tolerate this, you’ll never even have a chance of flying private or owning a Tesla!”
These are not actual quotes, because I can’t be bothered listening to her again, but it’s the gist of it
That is really refreshing. I think I like it - he has some great points
Oh good stuff Tim! Hard-hitting and entertaining.
TBH I find myself a bit too dry and serious.