Death and taxes

Only two things are certain in life... there’s little we can do about the first but wait, but for the second… well, there’s little we can do there either.

A common complaint of expatriates living in Norway is the notion that income taxes are sky high. This is true, compared to say, Qatar, where there are no personal income taxes (PIT), or Paraguay, where PIT maxes out at 10%. But is Norway really much higher than other countries? Some nifty little wizards at KPMG have compiled a report addressing just that.

According to the 2009 Individual Income Tax and Social Security Rate Survey, Norway has a PIT rate* of 40%, the UK 40%, and the US 35%**. However, these are not the highest PIT rates. Denmark has a PIT rate of 62.3%, Sweden 56.7%***, Netherlands 52%, and Austria, Belgium, and Japan 50%. But that’s only part of the story.

When you consider a combination of the highest tax rates based both on personal income tax and social security tax, the highest-taxed locations might surprise you (well, it did me, but I am easily surprised). KPMG found that “When taking both the personal income tax rate and social security rates into account for employees earning 100,000USD, the countries with the highest rates were Slovenia (54.9 percent), Croatia (53.5 percent) and Hungary (48.1 percent).”

In fact, if you consider both PIT and social security tax, on 100,000USD of gross income, one would pay 32.9% in Norway and 25.3% in the US. While a difference of more than 7% might seem quite large, it is worth noting that I am getting a lot for that 7.6% differential in Norway. I am pretty sure that difference is worth inexpensive-to-free health care, subsidized-to-free childcare and schooling, and even a gratis university education from a public institution (how I wish I would have had this kind of benefit before Sallie Mae and I met).

There’s really nothing witty or clever to joke about regarding tax rates so I won’t bother trying (although please feel free to comment if you do have some humor to share about this). However, it’s good to know that I am not being gouged by the Norsk tax system quite as badly as I thought I was. Cheers, Norge!
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For some reason a discussion of taxes requires a lot of footnotes. Of course it does.
* Note that this is the highest tax rate in countries with graduated tax systems.
** This is the federal tax rate only and does not take into account state income taxes.
***The PIT rates for Denmark and Sweden include a social security component as this is rolled into the PIT rate. They get a lot of free stuff for their tax dollars so don't feel too sorry for them.

Kan du snakke norsk?

I've been a bit slack on the blogging for the last week, partly due to my lack of Nyquil and persistent illness (the hacking cough is starting to...umm... hack off those around me now). The main reason I've been lax, however, is because I have returned to work after the summer sabbatical. I am a professor at a business school, and, while the money is not great and the glamour even less so, it affords me summers off, which is worth more than a salary offers.*

This week marked the return of the students, and it meant this chick had to get back to work. It's a tough job sometimes as I feel I am quite low-brow most of the time, based solely on my love for tabloid newspapers and crappy gossip sites. I have had to get back into the swing of things and 'academic' myself up again. See you next summer, Perez Hilton!

Part of the back-to-school process involves meetings. Lots and lots of meetings. Usually by October I have reverted to my usual policy regarding meetings, which is to avoid whenever possible. But in my start-of-term exuberance, I try to show up for the biggies to be a team player. This week I have spent at least ten hours in meetings. That alone would normally be enough to make me tear my hair out, but added into the mix are the fact these meetings are all in Norwegian.

This would seem an obvious thing since I am, after all, in Norway.

But I have whiplash from transitioning from English to Norwegian, and have been ingesting headache tablets at an alarming rate as a result. Let me lay it on the table - I am rubbish with Norwegian. For the first year and a half I lived here, I avoided learning any Norwegian at all. It's so easy to do as 95% of Norwegians speak English beautifully. But when I took my new job, I felt a large chasm between me and the rest of the staff due to my self-imposed language barrier.

Don't get me wrong - everyone was and is so kind to me, always offering to translate the important things or help me when I look confused (which is more often than not). But I felt I was an outsider since there always had to be a break in the meeting for Boss to ask if I understood. I didn't want to be singled out and I didn't want to create any additional work for others, so I resolved to learn some Norsk.

I first signed up for a Norwegian course at a local learning center. It met for 3 hours one night a week. I made it through the first 45 minutes of session one and left, never to return. The problem was really ego. Those who teach are usually the worst at being taught.** So the following week I hired a private tutor and spent the next six months taking lessons twice a week.

Because it was one-on-one, I dictated what I wanted to learn. I spent hours with Tutor translating work emails, academic articles, and textbooks. The result is that I have a fairly large vocabulary of management-related words, but I have absolutely no idea how to string them into a sentence, as mundane things like grammar and tense bored me.

This means I can follow a meeting by picking up keywords and context, but I would be hard pressed to muster up much more conversation than a four year old Norwegian child (and that might even be over-estimating my abilities a bit). It also means that I am always five minutes behind and 50% off topic when in meetings as I take far too long translating things in my head.

Recently the Norwegian Directorate of Integration and Diversity (IMDi) published a study detailing integration results for foreigners living in Norway. In this report, they note that "Numerous studies... document the need for better Norwegian language skills among many immigrants who have been resident in Norway for some years. (p.19)"

I'm not surprised. I am pretty certain I am one of those immigrants they're talking about. In my own work as a cultural researcher and academic, whenever I speak about cultural integration in a business context, I always emphasize the importance of learning the local language, even if your own language is widely spoken. It's about understanding nuance and meaning and removing barriers to relationships. I am embarrassed to say I have not sufficiently done that.

This all boils down to the fact that I've got to sort it out and suck it up and find myself a classroom to sullenly skulk in to so I can learn properly. It won't be fun, nor easy, but I have to practice what I preach. Jeg må prøve, you know.
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* I stand by this statement. I have worked for a lot more money and gained an ulcer, so working for less money but more freedom reaps its own rewards in my book. I certainly spend less on antacids and therapy now.
** I just didn't think smacking on the CD that came with the textbook and playing it for 20 minutes straight was a teaching technique with which I could get on board. I'm fussy like that.

For the love of doxylamine succinate*

I have a secret. It’s a drawer in my bedroom filled with every American over-the-counter drug from Anacin to Zantac. Every time I return to the States, I buy bumper packs of pain relievers and cough drops, much to the amusement of the pharmacy checkout clerk. But I never really get sick so I don’t often open the drawer.

This past week, though, I have been ILL. Of course it’s nothing exotic like the swine flu, but just a plain old summer cold. It started in my chest and has now settled, days later, in my head, causing ferocious sneezing, hacking and wheezing.

I finally broke down today and wobbled to the local pharmacy, desperate for a fix of some OTC goodness. The pharmacist patiently explained the different potions, but the net result is she had something to make the cough stop, something to make the cough start, and some feeble saline nasal spray which I suspect does nothing more than wet an already soppy place. I kept asking, over and over, “But don’t you have anything that will help ALL my symptoms?” The blank look said it all.

Sensing her good humor might soon wane, I scooped up the ‘stop coughing’ cough syrup and went on my way. I figured between that and the contents of my secret drawer I could cobble together an approximation of what I wanted.

I am one of those annoying long-term expats who always spouts off lofty things to my fellow foreigners such as “You can find everything you need here in Norway!”, “There’s always a substitute!”, or “There’s nothing from the US I can’t live without!” Turns out I have been beaten and these sentiments are not true when it comes to cold medicine.

That being said, I came home with my second rate cough syrup and pulled out the recently emptied bottle of Nyquil I finished off two days ago. Reading each line of the ingredients of the Nyquil, I managed to scrounge a similar drug out of the secret drawer. After necking about 8 tablets of varying medications, slurping the Norwegian cough syrup, and topping it all off with a swig of Cognac** (hey, Nyquil is 10% alcohol, you know), I settled in and waited for sweet respite.

It didn’t come. Instead I ended up with a sore tummy, a fuzzy head, and the same sneezing, hacking, and wheezing as before.

So to every expat that I have every smugly rebuffed for bemoaning something they missed from home, I take it all back. While I do still think you can whip up biscuits and gravy or a Thanksgiving dinner with close Norwegian approximations, I have learned that there is, in fact, something I can’t recreate here. But I am receiving my just desserts as I lay in a pajama-ed heap on the couch listening to repeats of Murder She Wrote.

Perhaps I didn’t get the cocktail just right… another swig or three of whiskey might just do the trick!***
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* Doxylamine suucinate is the 'so you can rest' part of Nyquil. It's classified as a hypnotic, and since I never got into the hallucinogens during college, this is the cloeset I will likely come to a drug-induced state of bliss.

** Please note I have no medical expertise other than what I have read on Web MD, so I do not recommend this concoction.

*** To be fair, you can get cough syrup with codeine with a prescription from a doc here in Norway, but since I am allergic to codeine this is of little comfort. I am also allergic to visiting my doctor, incidentally.

What I like about Norway

I recently read a post on a message board from a new expat begging someone to tell him why he should stay in Norway. My short answer to that is this: if you don’t know yourself, you probably aren’t meant to be here.

But, as usual, there’s a longer answer as well. So I asked myself: Why do I like living in Norway?

1. Because my husband and dogs are here.
Sure, they could be anywhere, and I’d likely be happy in that anywhere as well. But the fact of the matter is that they are in Norway, so that’s where I want to be. When living as an expat it can be easy to feel isolated, and one of the most significant areas of discontent is often the loss of relationships ‘back home’. But if your most important relationships are with you, you realize you could be living in Norway, Namibia, or North Dakota and it wouldn’t really matter.

2. Because it’s safe.
I mean that in a small and big picture sort of way. For example, I never worry, no matter the time of day, about being out by myself walking my dogs. The worst thing that might happen is I get some boisterous shouts from a drunken reveler heading to a party. When I used to walk my dogs in the evening in Houston, I loaded up with pepper spray and an outward facing key in my fist and practically dragged the dogs around the block with the speed of an Olympic sprinter as I was so nervous*.

That’s not to say crime doesn’t occur here – it does. The figures are lower in Stavanger than Oslo (as makes sense based on population size), but when you compare Norwegian national averages to the US, the numbers are unsettling. Although Norway has more guns per capita than the US, the US has almost four times as many gun-related deaths**. I'm just sayin'...

3. Because there are stars.
Yeah, I know that the stars are up there no matter where I am down here, but I had never really seen them until I moved to Norway. My husband (who grew up in rural and therefore smogless England) looked at me in disbelief as I gleefully pointed out all the twinkling in the sky. Truth is, between the concrete and the pollution, I had never been able to see the stars so clearly. In general, the air quality here is amazing***.

4. Because I met myself.
That sounds pretty strange, but a lot of the trappings of my daily life back in the US prevented me from really being able to know who I was. I hid behind appointments and activities and politics. When I came here to Norway, one of the most difficult things was being alone with nothing else to distract me from myself. I realized that, at almost 30, I wasn’t entirely sure who I was – or who I wanted to be. It can be hard to have to meet yourself for the first time, especially when you are less than thrilled about what you see. But stripping away all the excess meant I could start to rebuild with a solid foundation. And, frankly, I was a bit of a pill before. Now at least I am a self-aware pill!

There are lots of other little things I like about Norway (like caviar in a tube, ferries, fjords, and May 17th, to name a few), but the bottom line is that Norway isn’t what’s holding me back or propping me up. I am responsible for my own happiness, not the place in which I live. Just remember the old saying:

“Everywhere you go… there you are.”

I’m stuck with me regardless of place, so I might as well make the best of it… and myself. So to the gent looking for someone to tell him why he should live in Norway, live here for the experience, for the stars, for the caviar in a tube. Live here because you WANT to live here instead of living here and always looking for that greener grass elsewhere. I can promise you’ll always find something wrong, but if you focus on everything this country has to offer, then you just might stumble across something right.

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* What I ever actually planned to do with the pepper spray and key I don’t know. Perhaps I could have just handed them off to my potential assailant as barter.
** I’m not making a political statement about gun control here but rather using these statistics to illustrate a point. It could be statistics related to any crime and you would note the same general trend, which is that there’s a lot in the US and a little in Norway, even when you look at it on a per-capita basis.
** Except when the fish food factory smell blows in from Hillevåg. If you live in Stavanger, you know what I mean!

The worst drivers in the world... well, at least in Norway

Stavanger’s Aftenbladet published an article today alleging that drivers in Rogaland are among the worst in Norway. And here, after I just berated the media for over-sensationalizing, comes a sliver of truth from the press. (You can read the article in English via Google Translate here. An imperfect translation, but you get the gist.)

Words like aggressive and impatient and uninformed were bandied about based on interviews with sociologists, insurance specialists and various other 'in the know' folk. And, frankly, I can’t say that I disagree.

Normal mild-mannered and gentle Norwegians become lotharios behind the wheel. They throw themselves in front of you at high speeds, fail to use their indicators (and mirrors, natch), and they cut you off with little to no notice.

I’m not judging my adopted countrymen too harshly as I have a wreck or two or nine in my checkered past. But after I paid out the gross domestic product of Swaziland* on insurance deductibles I had a ‘come to Jesus’ moment with myself and tried to sort out my bad driving.

I have had several scrapes in Norway, primarily to do with roundabouts. It would appear that no one ever taught my lovely Norwegian compadres how they work, so I am taking this chance to lay out the rules once and for all. (Hopefully this will absolve my need to shout at my fellow drivers when they break the rules of rundkjøringen from now on.)

1. You yield to the person on your left. It is not true that he who enters first, wins.

2. You do not wait in a roundabout. If there is not room for you to pass through the roundabout to your onward road, do not, for the love of cookies, enter the roundabout. If you do, you will just jam it up for everyone else.

3. Use your blinker to indicate where you will be exiting the roundabout. Whipping into the roundabout and careening off an exit with no notice is a recipe for a crash.

I know there are a lot more rules, but if we could just nail those first three, I’d be pretty chuffed. I know you can do better than this, Rogaland!
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*This is hyperbole. I do not know what the GDP of Swaziland is. Nor do I intend to look it up. Feel free to post if you stumble across the info though, and we can all learn something.

The sky is falling... or so CNN would have us believe

It’s all kicking off in the media with doomsday reports that Shell, BP, ExxonMobil, and ConocoPhillips have all reported dramatic losses in their Q2 financials. Why does a blogging expat in Norway care about this? A few reasons – mainly because I love a good media frenzy. Also, Husband’s company is related to oil and gas services, so I like to pre-worry if Armageddon has arrived and the whole thing is going up in smoke. Another reason is that I am a professor in a business school, and they kind of like the faculty to at least pretend to understand these kinds of stories. Finally, I care because I live in an oil town and many of my expat friends are employed by the aforementioned companies, and I know that lower profits will translate in some way to expat contracts getting cut and me having one (or ten) less friends in town.

So I decided to do a little digging as that’s the kind of gal I am. Mind you, it was already established that I was rubbish at economics, but here’s my assessment of the situation.

Oil companies are reporting lower profits because the price of oil is declining.

Overly simplistic perhaps, but I did not see it mentioned in any of the articles I read. Famine, illiteracy, the impending resurrection, and Obama were all named culprits, but the simple fact that oil companies make money based on how much they can get for a barrel was painfully overlooked.

Have a look at the graph* below – it tracks Shell’s gross profit against the oil price**. (I use Shell as an example as I was too lazy to look at more than one company’s annual reports, but I suspect the trend is similar.)

See how the two trend together? So it should not be causing a media meltdown that Shell is down 70% in CCS (current cost of supplies) between Q2 09 and Q2 08. The media should actually be noting that these earnings are to be expected since we see the same trend in oil prices. But that’s not sexy enough. Frankly, if oil prices were trending down and Shell’s profits were trending up or staying the same, that would mean that an oil company is making money from something other than oil. Perhaps they invested in shares of Google back in the early days or have been quite judiciously investing their weekly allowance from dad.

The other issue is that 2008 was somewhat of an outlier in terms of profits, so we all got a little spoiled thinking the Golden Age would last forever. But Gatsby always dies at the end no matter how many times you read the book, and what we are seeing now is, for lack of a more astute phrase, a very sharp correction in the market.

Oil prices of $100 and more were not sustainable in the long run, and we saw those prices in part because 2008 saw a decline in the dollar, which is how oil commodities are priced. This decline in base currency meant OPEC had to raise oil prices in order to maintain existing profit margins. Throw in some unrest in major oil producing countries and increased demand from some larger national markets and you’ve got yourself an expensive barrel of black gold.

In fact, if you perform a trend analysis on gross profits in the same example used above, gross profit is still on a steady upswing.

I am not denying that we are in economic decline. However, I think this should be tempered with a little ‘big picture’ thinking and a recognition that these things are cyclical. So take a deep breath and resist the urge to run for the hills or sell out the portfolio. I don’t think we have to pawn the good china just yet. Perhaps someone should call CNN and let them know.
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*Apologies for the fuzzy graph. Frankly, I was pleased to get it from Excel into Blogger, so I'm not going to look a gift horse in the mouth.

**A few disclaimers about the graph. The numbers being thrown about in the media are CCS, but I used gross profit as this gives a little bit broader perspective. Second, the oil prices are annual averages adjusted for inflation, and Shell's gross profit is stated in millions. Third, Shell's gross profit for 2009 is simply GP for the first six months of 2009 multiplied by 2. This is most definitely not a FASB-approved accounting method, but, frankly, any other treatment required a lot of assumptions and even more math, and I have some West Wing to watch.

Ceteris Paribus

I wasn’t a great student of economics despite taking six classes at university. Economics and I knocked heads on many occasions, and I remember virtually nothing from my studies. I remember there were a lot of graphs, and anything requiring spatial awareness has never been my strong suit (as evidenced by the many dents on my car from thinking I was six inches further away or closer than I actually was).

One concept I do remember clearly is that of ceteris paribus, which is way of explaining a situation with one variable change but all other factors remaining the same. I don’t remember how this applied to economics, but the concept struck me then and now as a way of explaining how individuals respond to change and differing circumstances.

As an expatriate, moving to a new country is a huge shift in social, financial, and cultural circumstances. But transiting between home and host countries, whether for a holiday or in the permanent sense of repatriation, causes a shift in the individual, ceteris paribus.

When I visit the US, it is in many ways the same US I left. The US is ceteris paribus. I, however, am the changing variable. Every sojourn in a different place fundamentally changes a person, sometimes for the better and sometimes not. Taking this example the other way, when I moved to Norway, Norway was the same as it had always been. Me entering did not change the fundamental being of the country. But me entering did change the fundamental being of me.

I now hold opinions and ideologies I would have scoffed at ten years ago. But even without looking at my innate sense of values, my reaction to things has changed. When I first moved here, I remember thinking everything looked strange in terms of placement and architecture and aesthetics. Many things caused me pause, such as the fact I had to buy my alcohol at an open monopoly (Vinmonopolet is not just a clever brand – it’s all in the name, man). I thought the roads seemed narrow and so did the politics. I felt egalitarianism was a concept best left to theory but should never find a place in practice. Now, however, all of those things are part of my daily life, and I can’t remember ever feeling that they couldn’t or shouldn’t be.

I was reflecting on this as I have a great friend coming to visit from the US in a few months, and I wondered what her first impressions of Norway would be. I was racking my brain for the things I found odd when I first arrived, and although I can remember a few, nothing overly vivid springs to mind. Not because Norway has changed, but because I have. Norway is ceteris paribus, but I am not. This is the reason that people become accustomed and adapted to change. The situations remain the same, but our reflections on and experiences of them do not.

This notion is actually what makes humans so complex but so amazing. No matter our circumstances and no matter how much or often those circumstances change, we find a way to integrate ourselves and make it work. Now when I return to the US for a visit and feel frustrated and foreign, or when I return home to Norway and can’t remember the things that at first made me tear my hair out, I try to remember that I am the variable in the situation, not the place. You know, ceteris paribus.