The Achilles Heel of the Dual Income Tax. The Norwegian Case

Annette Alstadsæter

Discussion Papers from Statistics Norway, Research Department

Abstract: The dual income tax provides the self-employed individual with large incentives to participate in tax minimizing income shifting. The present paper analyses the income shifting incentives under the Norwegian split model in the presence of technology risk, and it concludes that the widely held corporation serves as a tax shelter for high-income self-employed individuals. In addition, real capital investments with a low risk profile are means to shift income from the labor income tax base to the capital income tax base for the high-income self-employed.

Keywords: Dual income tax; tax avoidance; risky investments; choice of organizational form (search for similar items in EconPapers)
JEL-codes: H24 H25 H32 (search for similar items in EconPapers)
Date: 2006-09
New Economics Papers: this item is included in nep-ent, nep-pbe and nep-pub
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Journal Article: The Achilles Heel of the Dual Income Tax: The Norwegian Case (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ssb:dispap:474

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