Comparing Tax Rates in the U.S. and Norway
We compare the income tax paid by an entrepreneur in Norway with what an American counterpart would have paid.
Getty
So, how much higher are taxes in Norway? We looked at Davor Sutija's 2009 income tax return—available, like all tax returns in Norway, on the Internet—and calculated a rough estimate for what he would have paid if he lived in the U.S. The CEO of Oslo-based Thinfilm isn't rich enough to be touched by Norway's 1.1 percent wealth tax, but he still paid far more in taxes in Norway than he would have in America, even if he lived in a high-tax state like Massachusetts. Leonard Levine, a C.P.A. in Boca Raton, Florida, and Martin Wikborg, a tax attorney in Ernst & Young's Oslo office, helped us with the calculations.
| Oslo | Massachusetts | Florida | |
|---|---|---|---|
| Gross salary | $537,000 | $537,000 | $537,000 |
| Income after deductions | $501,000 | $516,000 for state tax $453,000 for federal tax |
$479,000 |
| Payroll taxes | National insurance, employee contribution, 7.8% of gross: $42,000 | Social Security (6.2% of first $106,800): $6,600; Medicare (1.45%): $7,800 | |
| Income tax |
Income tax (28% flat rate): $140,000 Surtax (9% on income above $76,000; 12% on income above $124,000): $54,000 |
Federal income tax (progressive, up to 35%): $136,000 State tax (5.3% flat rate): $27,000 |
$138,000
No state tax |
| Total income tax bill | $236,000 |
$177,000 |
$152,000 |
| Effective income tax rate | 43.9% |
33% |
28.3% |
