(1) Institute of Economics and EPRU, University of Copenhagen, Studiestraede 6, Copenhagen K, 1455, Denmark
Abstract:
A Norwegian tax reform committee recently proposed a personal tax on the realized income from shares after deduction for an
imputed risk-free rate of return. This paper describes the design of the proposed shareholder income tax and shows that it
will be neutral with respect to investment and financing decisions and decisions to realize capital gains, provided that full
loss offsets are granted. Thus the tax allows some non-distortionary double taxation of corporate equity income. With an appropriate
choice of tax rates, it also solves the problem of income shifting under a dual income tax.
JEL Code: H24, H25