The Free Press
ZURICH, Switzerland — In the summer of 2018, I co-founded a company called Dune that allows people to easily analyze data from the blockchain—creating transparency in the crypto industry. My co-founder and I are Norwegian, and the company was based in Oslo. For about eight months we didn’t take any salary. Then we got accepted to a start-up accelerator that invested $250,000, which helped us get through the next few years. My salary was around $50,000.
It was a struggle—a constant grind. We had customers, but backers were hard to find. But we believed in the technology; we wanted to build an internet company, and our persistence eventually paid off. Beginning in late 2020, we raised $80 million in three rounds of venture-capital financing in just over a year.
On the one hand, this was a tremendous vote of confidence in the potential of our company. On the other hand, because we are Norwegian, our potential success has meant a punishing rebuke from our government.
After paying around 40 percent in taxes on my income, I faced Norway’s infamous “unrealized gains tax,” which had just been roughly doubled by the country’s left-wing government. This is a tax on the value of assets, even if they’re not sold.
In my case, because the venture-capital investments had increased the company’s valuation, this so-called wealth tax meant that I faced a tax bill many times larger than my after-tax income. The only way to pay it was to sell shares and dilute my ownership in my company. I had investors, yes, but I didn’t have a luxurious lifestyle. I flew economy and lived in the same two-bedroom apartment in one of Oslo’s cheaper neighborhoods.
So I did what an increasing number of Norwegian entrepreneurs have done. I said goodbye to my friends and family and moved to Switzerland.
Norway’s entrepreneurs are disappearing. In the past two years alone, 100 of Norway’s top 400 taxpayers, representing about 50 percent of that group’s wealth, have fled the country to protect their businesses.
In Atlas Shrugged, Ayn Rand paints a vivid picture of a dystopian society where government overreach and socialist policies kill innovation and demonize entrepreneurs. Present-day Norway mirrors this scenario in unsettling ways. The Nordic countries have long operated on an egalitarian ideal—citizens pay high tax rates for a generous safety net and effective public services. But Norway has taken the ideal to destructive and bizarre extremes.
Norway spends 45 percent more than Sweden on healthcare per capita with approximately the same health outcomes. Norway spends 50 percent more than Finland on primary and secondary school with worse results. And it splurges on green virtue-signaling with, for example, a $3.2 billion offshore wind project that industry experts believe is financially unworkable. That $3.2 billion, by the way, is roughly equivalent to the total revenue raised by the wealth tax.
To socialist politicians in Norway, entrepreneurs are mere piggy banks to be raided for ever more spending. When confronted with the reality that you can’t pay taxes with money you don’t have, the response is a vague moralism like “those with the broadest shoulders must bear the heaviest burdens.” Any dissent is waved away, deemed invalid because. . . free healthcare.
Earlier this year, instead of scaling back the tax blowout, the government doubled down, not only increasing the wealth tax but adding a vise grip on business owners in the form of an “exit tax” on unrealized gains as well. That means if you move from Norway, you’re immediately liable to pay 38 percent of the market value of your assets. It doesn’t matter if you have no cash on hand, if your assets are risky and could plummet in value, or even if your company fails after you leave—you still owe the tax. (Luckily for me, I left before this tax became law.)
The intent is to corral entrepreneurs inside Norway, impeding them from heading for the exits. The inevitable result: They’ll leave even before starting their businesses. After shooting itself in one foot, the government is now aiming a bazooka at the other one.
You may be reading this and asking yourself: How could this happen in Norway of all places? Why would such a sensible, prosperous, and well-ordered society do such a thing? It’s a good question.
The short answer is oil. Norway is rich in natural resources, especially oil. But unlike many oil-rich countries, Norway has managed its oil wealth wisely. The profits derived from oil production are shared widely throughout society. In the 1990s, Norwegian politicians recognized that oil is a finite resource and that reckless spending would run the cash spigot dry. In a rare act of political austerity and long-term thinking, they invested surplus oil revenues in a sovereign wealth fund and capped annual spending from that fund at 3 percent.
Oil wealth has allowed Norwegians to receive generous welfare benefits, free healthcare, free day care, free education, and more. Norwegians earn relatively high incomes with short work days.
But this reliance has become the government’s blind spot. Our abundance of oil wealth has led to a detachment from the reality of how wealth and economic growth are created. Ultimately that is the paradox that has caused the current situation: Because the state has so much money (for now), it doesn’t particularly care if businesses get launched and succeed. At least as long as the oil wealth lasts.
For “tax the rich” ideological reasons, the government leans on the wealth tax—tapping entrepreneurs whether they have made money or not. It’s an approach that’s incompatible with a forward-looking, high-tech economy.
Many other European countries understand this, which is why Austria, Denmark, Germany, the Netherlands, and France have repealed their unrealized gains taxes in recent decades. Norway’s neighbor Sweden abolished its wealth tax in 2007. Since then, its tech sector has flourished—Sweden’s Spotify recently surpassed Norway’s state-owned oil company, Equinor, in market capitalization. In the last 15 years, Norway has gone from having seven of the 30 most valuable companies among the Nordic countries, to only two—Equinor and DNB, a bank. Neither, obviously, is a tech company.
When Kamala Harris floated the idea of taxing some unrealized capital gains, the idea was slammed even by supporters, including Mark Cuban, who called it an “economy killer.” He was right.
It’s likely there will be a new government in Norway after the 2025 elections, but the wealth tax seems bound to survive. Even the seemingly business-friendly parties talk about retaining the tax in some scaled-back fashion.
In Atlas Shrugged, society deteriorates gradually but inevitably. First the trains go off schedule, then start crashing, and eventually stop running altogether. In a chilling echo, Norway’s trains have become increasingly unreliable, with worse punctuality than wartime Ukraine, and there have been two crashes, one of them fatal, in the past two months alone.
As for me, after I left, I found myself plastered on the “Wall of Shame” at the Socialist Left Party’s offices. And while I miss my friends and family and Norway’s staggering natural beauty, it made no sense to stay, something that is true of any Norwegian entrepreneur who wants to go big. I’m sadly glad I got out in time.
Fredrik Haga is the co-founder of Dune.com. This article is adapted from a piece he wrote for his blog, Hagaetc.
To support The Free Press, become a subscriber: