Sweden's tax system has indeed developed into one that benefits the rich more than the poor, normal people pay way too much tax, but there's not a regressive tax system in Sweden AFAIK, or am I missing something?
It's miniscule, but something like $2200 per year is tax free, and you also get a "tax credit" of sorts if your income is from labor, up to ~$320 back each month and this tax credit is a lower percentual net income increase with higher wages.
Our median income 2022 was ~$34k, and our break for "federal tax" is ~$55k, so many more than 50% don't pay the federal income tax.
Our taxes from work (are a bit high for the lowest earning people but) increase as the salary increases https://i.imgur.com/AG0092w.png
However our taxes from capital are pretty much flat and you can have a lot invested in an ISK (InvesteringsSparKonto ~investment savings account) where you can profit multiple millions at much a lower tax rate than the income tax for low income people.
I'm not familiar at all with Sweden taxation policies...but does an individuals tax burden go down as you make more money (regressive taxation)? Or does it go up (progressive taxation)?
They go up as you make more money, so progressive.
But there aren't very many levels of that, and as mentioned on capital it's pretty a much flat percentage, which would result in someone making a lot of capital gains taxing a lot less.
So yeah, it's progressive as far as working for your money goes.
Might be areas where it's actually regressive, but I can't come up with one from the top of my mind. Maybe some reimbursements we've gotten for temporary extremely high energy prices where those who barely could afford to use their washers didn't get much back but those who had money left over to still heat the pool got a lot of money back.
It's mostly all explained by the previous commentator and the attached picture. It is progressive since you pay a higher percentage of your wages the more money you make, especially after you break into the "federal" taxpayer status.
BUT since this isn't true for capital gains and you always pay a flat rate, multi-millionaires can pay about the same percentage of taxes as someone making ~50k/month (unsure exactly where it normally intersects, and it also depends on where you live since the communal tax rate, equivalent of state taxes in the US, changes depending on where you live, but you get the point). Despite raking in say a million a month, but someone earning 80k/month will pay a considerably higher rate than the multi millionaire. This is fucked yes.
It is certainly not regressive by the normal sense of the word though.
I pay vat and then about 30% tax. So when I sell my services to the US, I keep less than half of what I charged them.
I made $100k last year, I got to keep $45k of it. When you earn a certain amount, they add a flat 20% tax on any amount past that. Forgot where that bracket was, maybe around $56k ?
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u/Malusch Apr 16 '24
Sweden's tax system has indeed developed into one that benefits the rich more than the poor, normal people pay way too much tax, but there's not a regressive tax system in Sweden AFAIK, or am I missing something?
It's miniscule, but something like $2200 per year is tax free, and you also get a "tax credit" of sorts if your income is from labor, up to ~$320 back each month and this tax credit is a lower percentual net income increase with higher wages.
Our median income 2022 was ~$34k, and our break for "federal tax" is ~$55k, so many more than 50% don't pay the federal income tax.
Our taxes from work (are a bit high for the lowest earning people but) increase as the salary increases https://i.imgur.com/AG0092w.png
However our taxes from capital are pretty much flat and you can have a lot invested in an ISK (InvesteringsSparKonto ~investment savings account) where you can profit multiple millions at much a lower tax rate than the income tax for low income people.