Sweden's tax system actually has a very regressive tax system, especially compared to other countries in Europe. A regressive system places a greater tax burden on those with lower incomes. But does it really have to be that way?
High monthly basic deductions
In countries like France, where a friend lives, you have a basic tax deduction of 1.300 euros a month, which corresponds to approximately SEK 15.000. This means that ordinary wage earners pay tax on less than half of their income. To compensate for this, the state has chosen to introduce high inheritance taxes – for large inheritances over 2 million euros, the tax is as high as 40%.
Sweden has a lot to learn
Sweden could learn from such systems. By lowering the tax on work for low- and middle-income earners and instead raising taxes on larger inheritances and capital, we could create a fairer tax system that does not hit those who are already struggling as hard. Germany also has a similar system where the tax is distributed more progressively. It shows that there are alternatives to taxing work as heavily as we do in Sweden today.
Really just a tax on those who have too much productive
It is the state's introduction of money into society, production's respect for people, nature and climate as well as people's consumption and production which keep the real economy going. It is the real economy that supports society and not taxes. Taxes on people who have less than what can be judged to normally need is unproductive. It then reduces demand and thus further consumption, production, profits and tax revenues. With today's income, one could imagine that monthly incomes under 23000 per person would be tax-free. One had still didn't have to cut back on any allowances or social insurances.
Contributions and social insurance cost-effective
Instead, we should via contribution, social insurances and developed public sector make it easy to reach a livable income. Poor people consume everything they have and are productive through their consumption. It doesn't really cost society anything to give ordinary people what they need unconditionally. Then do people feel better when their income does not fall below average. International studies show that enough people will work or start businesses still. Maybe more people will start companies if they are not thrown out of the security systems before their business idea takes off? The attacks on social security and benefits especially since the 2006 reforms of Reinfeldt and the citizens have lowered productivity growth and thus our competitiveness to around one percent per year since 2007. Such tough measures are rarely profitable.
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Welfare more important to the people than tax cuts
When we have already established that welfare and employment are not dependent on high taxes on low and middle income earners for their financing, it is positive that Swedes prefer good welfare to tax cuts. This means that we can have higher taxes on really high incomes and capital. Too low tax on capital most of the inequality. High inheritance tax on large inheritances and tax on large gifts are also important. These make it more difficult for the wealthiest to hide their wealth when property and money are inherited or given as gifts.
En new survey from TCO shows that 8 out of 10 Swedes, regardless of party affiliation, want to prioritize welfare over reduced taxes. This means that most people are willing to pay more in taxes if the money goes to care, school and care. This is a clear sign that people see the value of a strong welfare state over short-term tax breaks.
The government is doing the opposite against the wishes of the people
In this year's budget, the government proposes tax cuts of a total of SEK 32 billion, among other things through reduced income tax and ISK savings. Those who earn the most benefit most from these proposals, which have been criticized as going against what the majority of the population wants.
Even most bourgeois voters want high taxes
According to TCO's survey, 80 percent of Swedes think that the government should invest more in welfare than in tax cuts. This also applies to most bourgeois voters, where the majority is willing to pay more in taxes if it leads to better healthcare, schooling and care for the elderly. Previous surveys from Skop also show that 90 percent prioritize healthcare, 88 percent care for the elderly and 82 percent schools over tax cuts.
Investing in higher taxes on capital, really large gifts and inheritances from the wealthiest is therefore a sustainable way forward. It creates a more equitable distribution of resources and ensures that society can provide high-quality services to all citizens, which in the long run benefits the whole society.
We don't need to continue down the beaten path with a regressive system. By redistribute the taxes and create money can we create a fairer and more sustainable economy, without stifling growth or welfare.
3 responses to “Cut the tax for low and middle income earners by half"
A tax on capital instead of wages also has the point that it is the unequal ownership that causes the unequal incomes, not the other way around.
And while it is difficult to tax ownership (it can be hidden), it is easy to tax inheritance. In inheritance, everything comes on the table, as Stefan de Vylder said.
And inheritance tax exists in most i-countries except Sweden!
A tax on capital instead of wages also has the point that it is the unequal ownership that causes the unequal incomes, not the other way around.
And while it is difficult to tax ownership (it can be hidden), it is easy to tax inheritance. In inheritance, everything comes on the table, as Stefan de Vylder said.
And inheritance tax exists in most i-countries except Sweden!
Spotlessly clean!
Important thoughts.