Sunday, August 2, 2009

Swedish taxes, part 1

I've been checking Google to see what shows up during a search for "Sweden". No surprises, really: it's cold; the people are blond, and, shall we say, welcoming; IKEA, ABBA, the Nobel prizes and Björn Borg are also high on the list. (I'd add Ann-Margaret but she's probably high on just my list...)

My googling also found that the Swedish health-care model is getting a lot of exposure in the US press these days, which is a good topic for another post, but for now, it leads me to the topic at hand, and something else Sweden is known for: high taxes.

Let's face it, Scandinavia is pretty darned socialist when compared to the US, and even the UK. The level of benefits and services are high, and they're paid for by commensurately high taxes. Here's a little chart of tax rates:

       Corporate  Personal  VAT
Sweden    26.3%   0-57%    25%
England     28%   0-40%    15%
U.S.A.    15-35%   15-35%    0%

I realise this is by no means the whole picture, but in general, it shows that taxes in Sweden are a lot higher than my other two countries. And taxes are much lower today than they were previously. My tax rate when I lived in Stockholm in 1990 was 71%. There's also a story, probably apocryphal, that at the height of ABBA's success, they were asked to pay 106% tax for all earnings over a certain amount. No wonder Benny had to be creative over his business dealings, and Skatteverket is still chasing him even today.

So, based on all this, you would think I'd be fearful of what the tax authorities have in store for me. However, I'm really not, and I'll explain more in a later post, but the key is to remember that we've built a summer home, or fritidshus. In Sweden, that's important.

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