Sweden has had extremely weak productivity development since 2007 because the tax level was too low.
"The truth is that Sweden does not have the highest taxes on work at all, regardless of which of the two standard measurement methods is used.
Tax burden and taxation can be measured in two ways - Either according to the so-called tax wedge, which means the difference between an employer's gross costs for the salary and the net salary that the employee receives. The other way to measure tax is by looking at the marginal tax, which means looking at how high the tax is on the last krone earned.
If you calculate according to the tax wedge method, Sweden ranks 10th among OECD countries for middle-income earners. If we use the method with marginal taxes, Sweden is far below average if you look at low and middle income earners and their taxation.
Measured in this way, countries such as the United States and the United Kingdom are significantly higher than us, despite the fact that many people live under the delusion that the United States is a low-tax country.
The only segment where we stand out and are at the top with only Belgium ahead of us is when we look at the tax for real high income earners, which is perfectly fine as you cannot calculate the tax burden unilaterally based on this group.
In addition, Swedish capital taxes are relatively low in comparison, as both inheritance and gift tax, wealth tax and property tax have been abolished in Sweden a long time ago.
If we also look at corporate taxation and the tax for company owners, Sweden is the best country in the world to run a business in according to the OECD." ( http://blogg.vk.se/…/svenska-skattesatser-ar-ratt-laga…/ )
Tax is not money that disappears without money being redistributed so that it can be used for consumption again.
When the tax level is too low, public investment is reduced too much and the many low-income earners' purchases too much. Even Wall Street admits this https://time.com/3083100/income-inequality/ ). The combined purchasing power of the many low-income earners is a greater force than the few rich. Among other things, because it will satisfy the needs of more mouths. A rich person simply does not need as many cars as a million low- and middle-income earners.
The right-wing economic institution Standard & Poors says in a new report that the widening gap between what the top one percent earns and what the average person earns threatens economic growth and thus the ability of the rich to stay rich or get richer.
Economic growth is maintained of a maintained or increasing rate of consumption. When the gaps become too large, two harmful effects for the economy occur:
- the richest don't need more and save everything they earn
- the large majority of low-income earners do not make the economy go together and save on the little they consumed
"But above all, according to Swedish Business, there is a lack of investment, companies have difficulty finding personnel with the right qualifications, and there are shortcomings in the matching between education and the business world's skill needs. Swedish rules and laws are still perceived as complicated by the companies.”
( https://www.arbetsvarlden.se/lagre-produktivitet-i-det…/ )
The lack of matching is likely due to the fact that the Alliance government removed the possibility of labor market education where the student is supported by unemployment insurance for anything but the toughest, most vulnerable professions. In combination with the fact that business is constantly streamlining its organizations and various people and skills are being rationalized away, more and more people are being left out of the labor market and companies are left without a workforce when the unemployed cannot retrain for the new skills in demand of the future.
With too little public investment, it will also be difficult to move to where the jobs are or to move away from an abusive partner.
A higher proportion become stressed and sick in a pressured working life. If the public sector gets enough tax revenue, it can set a good example and hire enough people for the staff to feel good. Private companies are then indirectly forced to compete with better working conditions.
But when people become ill due to an increasingly pressured working life in a low-tax society, it is more difficult to get the care you need to come back.
When there are only a few and incredibly pressured jobs to be found and children in vulnerable areas due to too low a tax level do not receive enough social support from society to compensate for their socio-economic vulnerability, social anxiety increases with e.g. gang crime and car fires. The bourgeoisie of older days appreciated high taxes, secure jobs and good wages because it led to class peace which led to steady, slowly increasing but sufficient growth.
Then the environment demands that we invest more in trains than domestic flights, but due to privatizations and delayed maintenance due to low taxes, the trains suffer from severe delays and are expensive to travel on.
Furthermore, the school requires significantly more resources so that the class size can be reduced so that the teaching profession does not become stressful and unattractive for the teaching staff. Nurses and all staff in the public sector, especially at low and medium levels in the hierarchies, need significantly higher salaries and better working conditions in order for all positions to be filled and for people not to get sick from stress or other work-related injuries.
Result: A declining economic growth rate/capita, recurring recessions and declining incomes for the wealthy few at the top.