Taxes are a big political issue the United States. Progressive Democrats like Alexandria Ocasio-Cortez have proposed higher taxes on wealthy Americans to help fund generous state welfare programs. Sweden, and other Nordic countries, are often now used as successful examples of nations that collect high taxes without hurting employment or their economies. Here’s a look at how Sweden pulls it off.
The April 15 deadline for federal tax returns is fast approaching. At the same time, taxing the wealthy is becoming a big political issue in the leadup to the 2020 presidential election.
Rep. Alexandria Ocasio-Cortez, D-N.Y., proposed a 70 percent marginal tax rate on wealthy Americans as part of her co-sponsored Green New Deal in February. Since then, wealth inequality and taxes have become a common platform among Democratic presidential hopefuls.
That 70% sounds like a big number, but there’s another country where some workers are paying similar taxes. Sweden.
“The short version of the story is that Sweden and other Nordic countries ... have high taxes and they have fairly good economic performance,” Torben Andersen, a professor in the Department of Economics and Business Economics at Aarhus University in Denmark, told CNBC. “And the simple explanation is that you cannot judge the effect of taxes without knowing what they are financing.”
Sweden is known to have some of the highest taxes in the world. At the same time, unemployment is low and the country has posted better GDP numbers than the United States in recent years. Here’s how a country with fewer than 10 million people pulled it off.
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How Sweden Balances High Taxes And Growth
We are taxed heavily already. For instance we have Federal income tax, Social Security tax (which is split at 6.2 percent from you and 6.2 from your employer) medicare tax, state tax, local city tax where we work, local city tax where we live, state sales and gasoline tax, property tax, vehicle registration tax, excise taxes on cell and isp providers that are pass through-----and that's basic life in some states. There are way more in everyday life and most of us unwittingly get taken to the bank for over 50% of our money. There are too many variables for that style of taxation to work here in the U.S. Taxes are killing me---i own absolutely nothing and still get killed on taxes.
1)the complexity of the “high” taxes you have no idea about
2) low asylum seeker intakes since 2017
3) high rapes because it includes domestic violence, assault including petty thievery
4) no “califate” takeover
5) you’re an idiot commenting without any knowledge of anything
The corporate tax is Sweden is only 22% but profits are taxed at an additional 30% and the payroll tax is 32%. An additional 20% tax is paid on profits over $50k and 25% on profits over $70k.
So if you have employees or take out a salary or profit from the business you're always paying over 45%. If you have a large business you have to pay anywhere from 45% to 99% tax. You do not even get to keep half of your earnings.
90% of taxes go to fund mass immigration and a broken pension system. Schools and hospitals are overcrowded, police and teachers are quitting their jobs and all successful businesses are moving abroad.
Most of Sweden's economic growth happened between 1860 and 1960 when taxes were below 10%. Low taxes created the present wealth which is being ruined by government incompetence.
IKEA is a Dutch company. It pulled out of Sweden due to the high taxes. The Swedish tax system is a disaster. It locks the low skilled into unemployment.
Public services are a shadow of what they were. And money is squandered on useless infrastructure. The one tax that ought to be increased - is absurdly low. Unemployment figures are massaged by changing the definition of who is unemployed.
I do not recognise the Sweden I live in from the description. It sounds like another country altogether - an imaginary Sweden.
An important issue not covered by this discussion is "legacy infrastructure". If you have a country like the US that has very high infrastructure costs e.g. roads, power, water and so on (in part due to a growing population and aging infrastructure) then your government costs are significantly higher. Also, the US spends a lot of money on the military... and finally, the more diverse a population base is the higher the social costs - something its politically incorrect to say as there are a lot of people running around saying "diversity is our strength" - they need a better education in history. People not speaking English or having different social standards puts considerable costs on the system. Finally, the US has significantly higher legal costs, more incarceration and so on. But recently, these costs have all increased in Sweden as well... for reasons I'll leave to your imagination that are not due to the 'global slowdown' lol.
This is BS. Sweden and the rest of Scandinavia is successful in spite of high taxes, not because of them. Part of the secret sauce is that Scandinavian countries are far less regulated than the U.S. For instance: In the U.S. every fourth job requires a federal or state permit of some kind, not in Scandinavia. The U.S. have a federal minimum wage, no Scandinavian country does. Not to mention the ridiculously long list of government agencies that can pass regulations "unnoticed" and without going through the houses in the U.S. - At least democracy has been preserved for the representatives in Scandinavia. Making tax policy the only parameter for growth is just lazy analysis. France has Scandinavian tax rates combined with a U.S. level of regulations, and their economy isn't doing very well. While in Switzerland they can boast Scandinavian levels of regulation with U.S. tax rates and they are doing better than Scandinavian countries on most areas. Growth and wealth is determined by alot of factors. Taxes is one of them but definitely not the only one.
I would say 'would you pay more tax for better social services etc.' is a bit of a stupid question because it relies on the false assumption that most people will pay more tax. The reason why I say this is because of the way tax brackets work:
If the first 10,000 dollars was taxed at 10%, the second 10,000 at 20% and the 3rd at 30% then if you earn 30,000 dollars you would pay $6,000 in tax which is an effective rate of 20%. American tax brackets are pretty ludicrous because in order for a married couple to pay the highest tax rate they need to earn over half a million dollars a year which by anybody's standards is quite a lot of money - more than enough to afford healthcare, education and generally a good lifestyle even after tax as their effective rate is likely to be around 26-30%. If we assume this to be 30% for the sake of argument They are still taking home $350,000 a year after tax. They are doing fine.
What is being proposed by the Green new deal is 70% tax on monies in excess of $10,000,000 annually. Most people don't see that money in their lifetimes let alone per annum so to conflate this into the ordinary American paying more tax is actual nonsense.
What it actually means is that for someone earning $11,000,000 a year if we stick to the 30% effective rate as a comparison, then instead of them paying $3,300,000 in tax they will pay $3,700,000. They are still taking home $6,300,000 so I'm sure they'll be fine.
With respect to American institutions I think that it's almost impossible to think about tax and it making a difference in people's lives in the context of the existing status quo. You have pharmaceutical companies that lobby until they have far too much bargaining power and health insurance companies that have no interest in lowering costs, rich communities with high local taxes funding rich schools and good education for rich people. Everyone outside of this system is basically screwed one way or the other.
If tax dollars were spent introducing a single payer healthcare system, then the bargaining power of the pharma companies goes down (there is only one customer so you sell at a fair price or you don't sell at all) and the insurance industry might suffer. That said, there will be more money to pay for better education across the country (rather than just in richer neighbourhoods), infrastructure which in turn creates jobs, and social care as well as investment in climate change initiatives. The average American will benefit as their health insurance will become affordable thus leading to a wealthier, healthier, happier and better educated society overall.
Please Americans do not give up your freedom and low taxes, I, live in Sweden work a lot and recive alsmot nothing, healthcare is mediocre, schools in free fall and most basic services like policing and roads are eroding fast. Sure America have problems, mostly some people in America have problems but you have the options to change almost anything yourself, we don't. We are all trapped by a quickly expanding state who dictate everything and waste tons of money on foreign aid and immigration. Yes look to Sweden, and learn from our mistakes.
+Sondre Johansen all I did was make an accurate observation about progressives. I didn't give any of my own thoughts about the relative value of any country. You're the only one here doing that.
I think many of the Asian countries you mention are great too, but progressives rarely site Japan or south Korea as gold standards for economic policy.
9 times out of 10, they bring up the Whitest European countries on Earth.
The hypocracy here is that in the US white/brown income inequality is called oppression by progressives because the progressives want to raise taxes. Globally, white/brown inequality isn't seen as oppression by white eurpean Countries. White countries are looked up to and considered the gold standard by progressives.
These are inconsistent ideas that coincidentally support the same agenda - raise taxes on the rich in the US.
Fwiw, I happen to support raising taxes on the rich in the US.
Webster Jorgensen maybe you might also try to explain that most of the non white countries were suppressed under colonial rule, like for example Africa which was a F-up during 20th century where during ww1 and ww2, there was huge scramble for territories and complete literal nonsensical divisions. And I am not even including the mass genocides and slavery.
Also your point becomes more useless when you consider non white nations like Japan, Singapore (which is not at all homogenous) and South Korea are also all thriving heavily, upto standard as to any Western European country.
So at the end, you’re the racist here
Because people are more inclined to pay higher taxes whn they see a good result: good, free schools, healthcare for all... When your hard earned money goes to corrupt politicians and stupid thing like building a wall, people are much more reacious to pay.
This only works for Sweden because they dont have Republicans.
Republicans fight against social programs and they start unfounded wars in the Middle East to justify allocating ridiculous amounts of our budget to the military. These are the people who are and have been holding America back for decades, and stifling the progress that FDR made in the 1930s.
Federal income, state income, social security, medicare, sales tax, property tax, and more... already taken from me and what do we have to show for it? Affordable care act is trash, we will never see anything close to what we put into social security, and wars. Why would anybody in the United States think it's a good idea to give these morons more money?!?
It's even more than that. Sweden may have a high level of personal taxation, but it does provide a wide range of public services and a safety net for its population ON TOP of sensible budgetary management, which has delivered fifteen surplus budgets since 1994 and a debt/GDP ratio that has fallen from 70%-of-GDP to 33% last year. Sounds budgetary policies benefits from a bipartisan consensus, so there is no chance of a sudden change of course.
i live in twin cities minnesota st paul minneapolis
i recently discovered lots of swedish influence here in minnesota, twin cities st paul minneapolis
here they are very liberal, amy klobuchar, and socialist
after watching this video
now i know the true character of all this non-sense
NO. And for the federal level, there should be a flat tax which is used to pay only for national Defense, immigration enforcement and interstate commerce regulation (which should be as sparse as possible).
Reliance on government should be heavily discouraged
Because this so called efficient system in recent years Sweden has sold Volvo cars to China. Saab automobile went bankrupt. Scania AB belongs to Volkswagen group. Ericsson net income is in constant decline and the same is for ABB. You can compare it with US companies. Ocasio Cortez has sweet dreams.
Has everyone forgotten that taxes can be evaded. Let's be honest, realistically no self respecting person would pay such a high tax rate. People know the value of their work. I see people referring to the postwar era (ww2) as this magical socialist time (in the us) when in reality although the tax rate was extraordinarily high no one actually paid. It was bypassed via the various loopholes. Correlation doesn't imply causation i.e. just because the economy was in a state of rapid growth doesn't mean it was because of the high tax rate.
SteelKola and idiots like you are the reason so many companies are evading tax which can benefit the population by moving to Tax havens!
Also being an individual, if you’re caught with tax evasion, that is much much worse then paying tax. It could mean jail and even double or triple the amount of your original tax accumulation
Another thing, the video is misleading hardly anyone here pays that much amount of tax!
Making a comparison between countries' gdp not doing it PPP is just worthless and unprofessional. Who cares how much they earn if prices are extremely high?
That's really the basics of presenting economic data.
My parents hastily left their countries and everything they had due to war and had to reestablish themselves in a completely new environment, shortly before I was born. Now, thanks to the welfare of Sweden, I am months away from a degree in law, without drowning in debt and I will always be grateful for the possibilities that this country has given me and my family. För Sverige i tiden
This is not true, Sweden has one of the lowest GDP growth per capita in Europe. Unemployment is not low, its actually quite high. A lot of jobs are so called "welfare jobs" where the government pays the salary. Also when we measure unemployment or "sysselsättningsgrad", people who work 1 hour a week are included in those statistics. This was a poorly coverage of Sweden and is simply not true. / Regards from a swedish citizen.
solna72 i didn’t mean to say we are not growing but our year on year growth is basically flat if you look at the charts for the last 6 years (except in 2014). It isn’t a bad thing but it can be better, and EUROPA has basically predicted it to go slower if actions aren’t taken in certain industries, also integration of immigrants from Poland Northern Africa and Middle East into labour or high skill works are a must!
solna72 I don’t think slow GDP growth has much to do with the population increase, it’s basically been quite flat for over a decade.
There needs to be more investment put into current emerging businesses and also attract foreign investment (not lower corporate tax, that is already very low thanks to the Reinfelt gov and that didn’t change anything!).
Let’s see how it goes since Lofven is on support from Centrepartiet and the Liberals, there might be more economical development in the next few years!
Alexandra Hedborg, now it is corrected. 😊
But I still think that is a different discussion. Sweden still ranks number 7, in spite of taxes - that is the point here.
The present lower growth per capita is partly due to large population increase.
+solna72 As you can see on my 2nd comment, I corrected it. If you knew anything about economics, you would know that the correct way to analyze actual growth is by looking at GDP Per capita, overall GDP growth does not say much about the economic state of a nation.
We The People demand congress take back the $$$ system per the constitution . No more bankers charging interest on the debt 350 billion a year collecting 3x in interest on what a house is worth . The government ( By the people ) would make loans instead . Charge a small interest rate on home loans, car loans , business loans which benefits the economy so why penalize people ? which would also lower taxes for everyone.
AOC is not a progressive democrat, she is a self proclaimed democratic socialist. The main characteristic of socialism is social ownership of the means of production and workers' self-management. Since she identifies as socialist she obviously subscribes to this philosophy. It would be interesting to hear her explain how she plans to implement this in the US.
She will not have to explain that, you dumb ass, when did ANY of the Justice Democrats say that the government would own the means of production? That is eliminating free enterprise, and that will be anti-American - if I thought that, I would never support Sanders, AOC and the rest. Get your facts straight
Main reasons is to keep employment up.
But a moral take on it is that companies doesn't recive benefits like people do, and in Sweden those benefits are huge (and therefore costs a lot). There is a fairness in paying for what you recive, at least to some exstent.
A person that makes 78K USD in Sweden takes home WAY more than 23.6 K USD. Way, Way more.
I make 442 K Swedish Krona/year (44 K USD) as a Construction worker, and I take home roughly 269 K SEK (27 K USD). Granted, If you earn more you tax more, as a procentage of your income, but not to the Point where 78 K USD becomes 23.6 K USD.
Did you mix up marginal tax rate with final tax rate? Because it's not the same thing.
Also, 1/3 of the Money that the employer pays, are a tax to begin with and is ofc not taxed again. If your total cost for the employer is 90 K, you pay income tax only tax on 60 K (the first 30 is a pay role tax). And Everything under about 50 K of that is taxed at the regular rate (about 22-25% after deductables, depending on where you live) and only the last 10 K is taxed with an extra 20%.
They could also have gotten the payroll tax wrong.
Basicly, Sweden has a payroll tax of 31.32%. That's a tax the employer have to pay to the government, in addition to your salary. It covers pensions and a couple of other things.
If you simplify the math to the level of a 5th-grader, then you could come to the conclusion that Swedish taxes are roughly 60+%, since payroll tax is 31.32%, income tax ~30% (depending on where you live and before deductions. In reality it's about 21-25%), then you just keep ~35%.
In reality, the income tax is only calculated on the salary, not the payroll tax, so the math gets wrong.
CHECK YO FACTS!!
(3:34) ... The tax of 69.7% is the highest band of tax. You would get 30% tax on the first 38,000 sek and 40% until for example 50,000 sek. The 69.7% is not on all of the 78,000.
So someone earning that much would take home a lot more than just 23,634 dollars. This sounds a bit like 'what happened in Sweden last night' - the Donald.
CNBC seems to get the taxing wrong. At least in Norway, the tax rates increase for the next krone you earn as you earn more. Earnings in NOK and taxrate applies to those particular earnings in percent:
0 – 54.650 0,00%
54.651 – 81.324 25,00%
81.325 – 102.818 8,20%
102.819 – 174.500 20,30%
174.501 – 224.000 22,20%
224.001 – 245.650 32,10%
245.651 – 617.500 34,40%
617.501 – 964.800 43,40%
If you earn 1 million NOK (117 462 U.S. dollars) you pay 335 899 NOK (39 455.3683 U.S. dollars), or 33.59% in taxes. The rates for VAT etc. are quite high though. In addition there are other taxes, as well as things that reduce your taxes, such as having a housing loan. Roughly 80% of Norwegians own their own home as a consequence. Sources are in Norwegian. https://www.regjeringen.no/no/tema/okonomi-og-budsjett/skatter-og-avgifter/skattesatser-2019/id2614444/
Free healthcare, education and a lot of vacation in return, while having some of the highest average wages, lowest rates of inequality and highest GDP per capita in the world. (Norway is slightly ahead of its nordic neighbours due to oil, the revenue from which is stored in a fund investing mostly in foreign stocks, now owning more than 1.5% of all global stocks)
The american dream was a lie that fed on desperation of poor and opportunist entrpenours who wanted to lure workers from overseas to work cheep at twice the hours .. i dont know how this fact was simply ignored.
This was the most illiterate explanation of how taxes work that I have ever seen. And ya, good luck explaining to working class Americans that they can keep $23,000 out of the $78,000 they earn.... but don't worry! You'll get govt healthcare!
Sweden can afford all those things because they don't have to spend billions of dollars on the military industry!! With the money you spent on Iraq and Afghanistan wars the USA could have afforded a lot of things.
Sweden almost pay the highest taxes in the world still gets almost nothing back from it.
Failing healthcare and schoolsystems and rise in crimes is something we got used to, girls don't even dare to go out when it's dark anymore...
Sweden is getting worse fast and we don't even waste so much on our military lol.
Donald Trump: ‘We should have more people [immigrating to the U.S.] from places like Norway [a social democracy with higher prosperity shared among all economic classes rather than concentrated in the hands of a small minority of the super wealthy].” “That Scandinavian life is famous for its sense of well-being. The UN’s World Happiness Report, in fact, now ranks Denmark, Finland, Iceland, Norway, and Sweden [countries with Democratic Socialist systems] at the top of their happiness list. By contrast, the US -- a country accustomed to being the best in the world at everything, except perhaps humility -- is in a period of happiness slippage, having wilted from third place to 19th in 10 short years. The stated reasons for that drop are “declining social support” and “increased corruption.”
— Brent Giannotta, “What Americans Can Learn From Scandinavians, the Happiest People in the World,” Thrillist.com, January 2, 2018
“I think the biggest myth about the climate change challenge is that responding to it is just going to be cost, cost, cost. In fact, responding to the climate change challenge is going to be benefit, benefit, benefit. What's going to happen is, number one, we're going to reduce the magnitude of the damages that we and the rest of the world suffer from climate change. Number two, we are going to improve the air quality in our cities. Number three, we're going to preserve our forests as havens for biodiversity. And number four, we're going to unleash a wave of technological innovation that's going to create new technologies, new businesses, new jobs, and new growth. This is a win win, win, win situation. If we don't deal with it, it's going to be lose, lose. We will be cooked.” — Dr. John P. Holdren, https://youtu.be/g7yUwwQcOtc?t=4
"81 percent [of Americans] are enthusiastic about the Green New Deal. 75 percent want higher taxes on the rich. These are hugely popular policies that work really well in the countries that tried them." — Rutger Bregman, Historian, "Moderates Are The Real Fringe," Mar 11, 2019, https://www.youtube.com/watch?v=JinHvGkOfnA
"Denmark, where tax receipts are 46 percent of GDP compared with 26 percent in the U.S., is arguably the most social-democratic country in the world. According to conservative doctrine, the combination of high taxes and aid to “takers” must really destroy incentives both to create jobs and to take them in any case. So Denmark must suffer from mass unemployment, right? Ahem: https://tinyurl.com/yabwlggy Yep, Danish adults are more likely to be employed than their U.S. counterparts. They work somewhat shorter hours, although that may well be a welfare-improving choice. But what Denmark shows is that you can run a welfare state far more generous than we do – beyond the wildest dreams of U.S. progressives – and still have a highly successful economy. Indeed, while GDP per capita in Denmark is lower than in the U.S. – basically because of shorter work hours – life satisfaction is notably higher."
— Paul Krugman, "Notes on a Butter Republic," New York Times, August 5, 2018
OWNED! Danes fire back at Trish Regan for LYING about Denmark
Fox News Tried Going After Denmark. Big Mistake, https://www.youtube.com/watch?v=JXecLXlzEXE
Danish Politician is asked by an American: Why Is Denmark So Happy?, https://www.youtube.com/watch?v=2Ei72MwEcPQ
In the video you have said it without too much focus to avoid the fall of your house of cards: tax on businesses at 21%. That’s basically Donald trump’s tax reform 1:1, but you obviously omitted that. 21% is very low considering the previous 35% tax in the USA.
Sweden is an argument for low taxation on businesses
Sweden has a good economy because of low corporate taxes and market deregulation.
You are trying to promote big government that had nothing to do with economic growth, considering that government’s provided education is not always coherent to the market’s demand. Public healthcare is just expensive and social programs don’t create wealth.
To sum up: SWEDEN IS RICH FOR LOW CORPORATE TAXES AND SMALL MARKET REGULATIONS. please read this and remember this every time left wing people or politicians try to sell you the idea that high taxes in Nordic countries boost the economy only as an excuse to raise taxes in your country
This absolutely would not work in the US, public union retirement bailouts would consume nearly every increase in revenue. It’s what’s happened for decades, the public bailout burden is only growing and forecast to take generations to get close to paid. It’s a primary driver of climate change legislation, which has no provisions preventing unions from robbing the save the earth fund, so bye bye any new revenue.
Sweden is a homogeneous nation. There is no cultural "diversity" to conflict it in matters of taxes and finance. So it seems to function well to the satisfaction of the Swedes. This would NOT work well here in the USA where there are many racial backgrounds and would also be counter to the American culture of independence and counter to the US Constitution. That is "The Pursuit of Happiness". High taxes are an anathema to this. Because high taxes suppress achievement, and the work ethic. I resent being taxed to feed someone else's child, providing free stuff for those who refuse to work (e.g. Obama phones), and feed a cash hungry government ("You didn't build this"). High taxes do NOT give us a better healthcare system. Social services can be provided by nonprofit organizations, like Churches. Since that is one of the reasons that they are tax exempt.
Sweden have a large % of people that were born in another country. Homogeneous dont really fit to describe Sweden. Sweden has multiple political parties that wants to lower taxes, and multiple other parties that instead wants to fund the wellfare and do more social reforms. Sweden do not have a two-party system. If "The Persuit of Happiness" is the right to social mobility and get rich, then Sweden dominates! It has more milionaire per capita and more billionaire per capita then the US. As the video says, in Sweden there are more start-up companies per capita and there are also more self-made rich people in Sweden. High taxes has in no way stopped this. The result say opposite, Sweden has done way more for "Persuit of Happiness" then the US. And Sweden has lower child mortality, has higher life expectency, has lower public dept. The US need to get smarter so they spend their tax-money better, and low taxes is really not the way.
I´m swedish. I don´t care about numbers or percent tax. What´s important to me is how I can live my life. I have a normal job as a train driver. I own my own house, have a car (Volvo of course), enough money in the bank so I can travel on my vacation (five weeks/year, I was in the US this winter and will go to Japan in October). I have a cottage in the mountains in the north of Sweden where I can go skiing or hiking. I have no debts from studies. I can get healtcare if I need and not being denied by any insurance company who makes profit from my money. I can stop working when I´m old and survive economicaly. I feel free to do what I want. No, the state doesn´t own me even if the taxe is high as some Americans think. Always have to think of how to survive would have stressed me and make me feel not free. America is probably good if you are rich otherwise I don´t think so.
> The govt worker claims he is not owned by the state.
Of course not, how would you be? You are one of those benefiting from it. Kinda like how Malcolm X said the house n**** will fight harder to save his massa's house.
Someone making $78 000 would not pay 69.7% effective taxrate for a $23 000 take home pay. No way in hell. I only make $48 000 and get more take home pay than $23 000. Unless social security and such is counted as salary which is then taxed or some other funky mechanics.
No, that’s not the case. The marginal tax can be really high, but you don’t pay that high percentage on all your income. It”s just like what AOC talks about in the US. That 70% is not supposed for ALL income, just the portion above a certain level.
The US could easily afford all of these positive helpful benefits, but we have unfortunately takin on the role of "the world police." So most of our tax money goes to the Military. It's a pretty gross reality we live in.
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