Raid profits with the Vikings

It’s hard not to be envious of Australians.

I used to travel down under every three months to pitch US stocks to Australian banks, mutual funds and insurance companies. After a week in vibrant Sydney and historical Melbourne, it was tough to get on the plane and head home.

The country is blessed not only with natural beauty, fun-loving people and tremendous resources but by its location at the heart of Pacific trade flows. A smallish energetic population coupled with a commodity boom has led to two decades of uninterrupted growth.

No wonder investors are in love with Australia.  But what about another lucky country equally blessed.

Get your head around this fact: Norway has the world’s largest sovereign wealth fund.

With a population of only 4.9 million, there are more Norwegians in the Minneapolis area than in Norway. Yet the country is the largest oil producer and exporter in Western Europe and the world’s second largest exporter of natural gas.

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

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 his total net worth. And that’s just what he pays directly. Payroll taxes in Norway are double those in the U.S. 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 is 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.

Try getting that package through the U.S. Senate Finance Committee.

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.

Norway’s 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. Economic growth is close to 4% and the unemployment rate is a rock bottom 3.1%.

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’s government balance sheet the best in the world.

Your best bet to enter high tax, oil rich Norway is through the gates of the Norway country ETF (NORW) that has about half of its holdings in the energy sector and offers a dividend yield of 2.4%.  A company that I have recommended in the past is the energy giant Statoil (STO). Headquartered in Norway, it operates throughout Scandinavia, Poland, Estonia, Latvia, Russia and Lithuania.

Maybe it’s more than just luck.

Opportunity awaits,

Carl Delfeld.

Note from Midas Legacy Editor: We’re honored to have Carl Delfeld on our expert panel. Carl is founder of several financial organizations around the world, and he has advised the US senate and the US Treasury among many other large names. He is also the author of three investment books. Carl’s stock recommendation service, The Value Bounce, is the result of all his experience and research as he cherry-picks trades that allow you to have your cake and east it.