Nicolai Tangen, a successful hedge fund manager, is the new head of this organization, which may seem reasonable at first glance. However, Nicolai Tangen must necessarily have engaged in some pretty risky operations in order to have amassed the sort of fortune for himself that he has been able to gain over the years. It's doubtful that such a strategy would be appropriate for a wealth fund, so his experience may not be as valuable as it seems.
There is also the issue of conflict of interest. How will Mr. Tangen act in cases where the interests of his private wealth fund is in conflict with the interest of the sovereign wealth fond. Will he be able to resist the temptation to drain the sovereign wealth fund to the advantage of his private hedge fund. How will this man act in a time of crisis?
Yet, there is an even more troubling issue at hand. Mr. Tangen does not believe in the very concept of inheritance. He is of the stated opinion that all wealth should be either consumed or given away after a generation is up. There should be no transfer of wealth from one generation to the next. In other words, he does not believe in the wealth fund's aim to safeguard future generations. If he is consistent in his thinking, the wealth fund must be completely drained or given away within the coming decade so that no-one growing up in Norway today are in any way advantaged relative to people growing up in other countries.
It is hard to believe that Mr. Tangen actually believes in his own words, and we must hope that he is in fact a twit and an extremely bad public speaker. But if this is not the case, and his views on inheritance is a general reflection of thoughts circulating among the political elite, then future generations may turn out to be completely deprived of any economic advantage that they might otherwise have had.
The political elite, which happen to be notorious for having no children, are not themselves in any danger from Mr. Tangen. Quite the opposite is the case, because Mr. Tangen appears to feel it appropriate to consume the entire wealth fund within the coming decade or so, especially by people who have no children to whom the windfall could be re-directed. Mr. Tangen's rather extreme view on inheritance may therefore be more mainstream among the political elite than it is in the general public.
This leads us to the possibility that Mr. Tangen's proposed 100% inheritance tax will become law, so that the political elite can consume for themselves, not only the sovereign wealth fund, but also all accumulated wealth in the private sector. According to Mr. Tangen's vision for the future of Norway, all farms, all land, and all private businesses should become nationalized within a generation, and the wealth should be sold off to foreign interests so that the political elite can consume it or give it away to foreign nations.
This is so crazy that it is unlikely that anyone will actually enact such a law, but let us for a moment consider the possibility. What would be the best way to navigate around such a law?
Assuming that sales tax remain below 100%, all people interested in giving an inheritance to their children will start off by selling what they have to their children at as low an evaluation as possible. That rate will be very low, because ownership of private property has become a lot less attractive with the new inheritance tax, so the sale to the younger generation will be relatively painless. However, such a sale may result in the older generation having far more cash than they wish to consume. In such a case, the older generation can buy gold and silver coins, presumably still with little or no sales tax. These coins can then be handed over to the younger generation as a private, undocumented, gift.
This will bring a lot of gold and silver coins into the parallel economy, which operates outside of state control. There will be two economies: One official in which nothing has much value due to the inheritance tax. The parallel economy will have prices set in coin, with no transaction fees, and no taxes.
Even if the political elite enacts the draconian law proposed by Mr. Tangen, they will fail to nationalize everything. The economy will instead go under ground, and resistance and disobedience to the state will become the norm.
By Unknown author - http://www.artres.com/Doc/ART/Media/TR3/F/M/8/Q/ART1662.jpg, Public Domain, Link
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