{"id":33683,"date":"2012-11-21T09:02:45","date_gmt":"2012-11-21T14:02:45","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/11\/the-other-lucky-country\/"},"modified":"2012-11-21T09:02:45","modified_gmt":"2012-11-21T14:02:45","slug":"the-other-lucky-country","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/11\/21\/the-other-lucky-country\/","title":{"rendered":"The \u201cOther\u201d Lucky Country"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

It\u2019s hard not to be envious of Australians.<\/p>\n

I used to travel \u201cdown under\u201d every three months to pitch U.S. stocks to Australian banks, mutual funds and insurance companies. After a week in vibrant Sydney and historical Melbourne, it was always tough to get on the plane and head home.<\/p>\n

The country is blessed not only with natural beauty, fun-loving people and tremendous resources, but by its geography, it\u2019s also at the heart of Pacific trade flows. A smallish, energetic population coupled with a commodity boom has led to two decades of uninterrupted growth.<\/p>\n

No wonder investors are in love with Australia, but why give the cold shoulder to another lucky country that\u2019s equally blessed.<\/p>\n

Get your head around this fact: Norway has the world\u2019s largest sovereign wealth fund<\/em>.<\/p>\n

A Sort of \u201cHigh-Tax Heaven\u201d<\/strong><\/h2>\n

With a population of only 4.9 million, there are more Norwegians in the Minneapolis<\/a> area than in Norway. Yet the country is the largest oil producer and exporter in Western Europe and the world\u2019s second-largest exporter of natural gas.<\/p>\n

You might think that this petro wealth would translate into low taxes \u2013 but you would be dead wrong. Norway is a weird sort of high-tax heaven.<\/p>\n

High-income Norwegians pay nearly 50% of their income to the federal government, along with a substantial additional tax that works out to roughly 1% of their total net worth. And that’s just what they pay directly. Payroll taxes in Norway are double those in the United States. Sales taxes, at 25%, are roughly triple. Plus, the highest income tax rates kick in at $124,000. From there, the income tax rate, including a national insurance tax, is 47.8%. Then there\u2019s the wealth tax, a 1.1% annual levy on the entirety of a person’s holdings above about $117,000, including stock in private companies held by the owner.<\/p>\n

Try getting that package through the U.S. Senate Finance Committee.<\/p>\n

The flip side of this politically toxic cocktail of taxes is that at age 67, workers get a government pension of up to 66% of their working income, and everyone gets free education, from nursery school through graduate school plus free high-quality day care for the asking. Wow.<\/p>\n

An A+ in Fiscal Discipline<\/strong><\/h2>\n

Norway\u2019s economy is not only driven by ample resources, as the rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States<\/a>. Economic growth is close to 4% and the unemployment rate is a rock bottom 3.1%.<\/p>\n

The government gets an A+ in fiscal discipline, as it can only draw 4% of its $650-billion oil fund to support its annual budget, which probably makes Norway\u2019s government balance sheet the best in the world.<\/p>\n

The management of this gigantic fund, up 4.7% in the third quarter, may offer some lessons for us in our personal finances:<\/p>\n