Wednesday, September 17, 2008

Tax Cuts in Sweden

Just a quick post really. Sweden is lowering income taxes. Again. By quite a bit. 15 billion SEK. For those of you scoring at home, that’s about $2,212,389,381 assuming the current exchange rate of one US dollar equaling 6.78 Swedish kronor.

Recently, Sweden moved down on the rankings for countries with the highest tax burden. Denmark now takes the cake with Sweden coming in second at around 47%. Fredrik Reinfeldt, (Sweden’s current Prime Minister) seems to have made it a sort of goal to lower the tax burden to 45% before he turns 45 during the 2010 election.

So, as promised Moderaterna (the current ruling party with a conservative leaning) are continuing to lower taxes. This will be the third cut since they started in 2007.

And in case you were wondering… I love it. I’m all for a little bit of a cut in income taxes when the overall tax burden is the second highest in the world. Especially since it results in a bit more money that I can spend in whatever way I please. And also, from a historical and economic perspective, in times of economic turmoil such as what we are seeing in the US, and what most financial experts are predicting for Sweden, lowering taxes tends to be a better idea than raising them in terms of creating jobs.

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  1. Wait a second, i moved to Sweden from the US last year. I have four children, and the things that i would have paid out of pocket in insurance are provided by these taxes. Are people breathing a sigh of relief that they no longer have to care if about the burden of our schools, affordable chidcare, and medical care....So what sort of fun stuff will you buy, sorry but i feel really heavy with this lately. My friends in the US are complaining about closing schools.

  2. @isle dance - agreed. however, many others don't.

    @teresa - so this was just a short post and I didnt go into some of the issues that have been discussed on this blog before in terms of taxes, but, I think there should be some sort of safety net, and obviously the government should be expected to help out with certain parts of a societies infrastructure. but I do not think that 47% is necessary. granted that is the entire tax burden not just income tax but still. what that comes down to is that a person is just barely working for themselves if you look at the percentage of the money they are bringing in and keeping (53%). and I dont like that. I like having options. I like independence and being able to decide what my money will be spent on rather than feeling like I need the government to act as a parent handing out an allowance when I need it or always being there to bail me out or help me out. plenty of people don't agree. especially here in sweden.

  3. Born Free
    Taxed to Death

  4. Isn't it interesting that in both Sweden and the US this liberal agenda of cutting taxes arrives from the conservatives? Here is some trivia. When i was a child (10 yrs) in the US, a representative of the Republican party came our classroom.(no other poltical party did this) The man gave us the same points, more options, lower taxes, and more jobs created. At the end of the class he asked us to raise our hands if we would vote Republican. Only two kids of about 30 did not as i recall. My experience of this 'more options' as an adult was exactly like having a pizza menu with 80 different varieties and no cash. I just hope people here will not let it go overboard.

  5. i guess the question is what social programs will be cut because of this decrease in the gov't income. once that is clear, then people can make a decision whether they are for or against it. to do so before all the facts are out is jumping the gun and assuming that you don't depend on an aspect of society that may no longer be free or subsidized.

  6. @anonymous - I love the story. we'll see what happens here though.

    @anonymous - hey now. slow down. that sounds way too logical.

  7. In regards to one of the anonymous posts: When it comes to government taxing and spending American conservatives are conserving liberalism (i.e. individual liberty). FDR once complimented Senator Truman in that he had a "liberal interpretation of the Constitution as to the powers granted to the government". That moniker stuck and progressives became known as liberals.

    So, we may have it a little backwards with our labels in the US. Granted, conservatives the world over are often more weary of other nations' motives than their counterparts, which you can easily say is true about most American conservatives, at least from the 1960's on (which is also when social liberals aligned with the FDR/Truman/LBJ types).

    So there you go.

    I'm not sure if this has been mentioned yet, but there's sound economic principles that back the notion of taxes being too high can yield diminishing receipts. That's probably the case in Sweden.

  8. very well said, and a great explanation of the history of the conservative moniker.