Taxation: The rate of corporation tax is 28%. Personal taxation is based on worldwide income derived from employment, business and investments and is largely raised by local government. Including central government, the top rate is 60%. Capital gains tax is levied at a general rate of 30%. Value-added tax (VAT) applies to the sale of all goods and most services. The basic rate of VAT is 25%, with reduced rates of 12% on food and 6% on items including books and personal transport.
So if one earns 100 kronor at a job, one can buy 32 kronor worth of goods (60% income tax plus 25% VAT on the remaining 40). If one owns stock in a company whose share of gross profits is 100 kronor, one can buy just over 40 kronor worth of goods (28% corporate tax, 30% capital gains, and then the 25% VAT).
Sounds like Swedes have to work twice as hard for the government as they do for themselves, and their companies are almost as bad off. I am impressed that any can afford Volvos and the like at all after that burden, but it sounds a lot more like oppressive Eurosocialism than capitalism to me.
It’s even more complicated that that, but thanks for these remarks.
Let’s forget about the issue of taxes as such and approach this particular question:
Standard of living.
We would probably agree that as long average Swedes consume more than average Americans, they are richer and vice versa.
Well, what’s reality like?
Some facts:
- Americans own MORE cars in relation to population compared to Sweden (something like 0,85/capita - Swedes own a sole 0,56/capita)
- Measured by American MSRP Swedes, drive luxury cars that few Americans can afford.
- Average American wages are low compared to their Swedish counterparts
- Swedish consumer prices are high compared to American ones
- Swedes live in very well built houses
- It is more common for Americans to own a single family house.
- Many Swedish families (and even some singles) own a summer house.
Who’s rich, who’s not?
How to settle this issue?
Travel around in Sweden and the US some and form an impression of your own without the aid of statistics:)