Tax Migration as Social Contagion: A Tipping-Point Model with Application to the Scandinavian Wealth Tax Debate

Anders G Fr{\o}seth

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Abstract: Blandhol (2025) estimates that wealth-tax-induced emigration from Norway reduces long-run GDP by 1.3%. Dansk Industri scaled this figure to argue that a Danish wealth tax would cost billions - a claim central to the 2026 Danish election campaign. We develop a social contagion model in which the emigration rate depends on a visibility-weighted fraction of prior emigrants, producing tipping-point dynamics. Embedding the model in the Fokker-Planck framework of Froseth (2026, arXiv:2603.05283), we show that the micro-to-macro extrapolation underlying the 1.3% figure requires five identification conditions to hold simultaneously - each of which is violated. Using a panel of the 400 wealthiest Norwegians (2011-2025), we estimate the Pareto tail exponent (approximately 1.3, stable across years), identify the emigrants within Blandhol's 2016-2020 sample window, and document a hidden channel of heir-emigration - 36 recent cases carrying approximately 127 bn NOK - invisible in panel data because controlling owners retain their A-shares while heirs emigrate with economic exposure only. The event-study sample is dominated by passive wealth-holders with near-zero productivity haircuts, and the wealth-weighted integral that determines the GDP effect is controlled by individuals entirely absent from the sample. The Norwegian emigration wave is a non-scalable, path-dependent tipping event, not a smooth elasticity.

Date: 2026-07
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