Please, Sir, Can We Pay Some More? Why Swedes Love High Taxes

×
norrkoping  sweden   august 4   ...
Rolf_52/Shutterstock

Imagine a land where politicians regularly propose tax increases at election time to get votes. That's Sweden, with its comprehensive social welfare system.

"If you want to have a working community, with infrastructure and all these kinds of social benefits that you have in a civilized world, then you have to pay taxes." So says one Swedish taxpayer recently interviewed for a Swedish Institute story about residents and their fiscal relationships with the state.

And pay taxes they do. Income tax for the average Swede is 44 percent, with rates as high as 60 percent. As a percentage of gross domestic product, Sweden's income tax revenue is one of the world's highest. The value-added tax, essentially a sales tax, is 25 percent.

But what Swedes get for all these taxes is substantial. Comprehensive health care includes visits to both general practitioners and specialists at very low cost. Dental care, including orthodontics, is free for children and adults up to 20, and then subsidized for those older than 20. Throw in liberal amounts of parental and sick leave, as well as generous unemployment benefits, and you can begin to understand why the Swedes contentedly file their taxes on Tax Declaration Day.

How Would Americans React?

But if you asked even politically left-of-center Americans if they would trade high-end social services for the taxes Swedes pay, it's far from certain if they would have the same feeling about April 15.

"I have shared some examples of Swedish taxation with Americans," says Steven Schier, Fulbright scholar for American Studies at Sweden's Uppsala University, "and some of them find it just beyond belief that taxes could be so high. A 25 percent sales tax, for example ... is shocking to many Americans, because they are more suspicious of government -- suspicious of the ability of government to deliver services, as well -- and therefore less inclined to want to pay high levels of taxation."

And this cuts to the heart of why the typical Swedes are relatively happy to hand over such a large portion of their paychecks to the government. Yes, Swedes get a lot of services for their taxes, but the psychological relationship with their government makes the whole tax-and-deliver ecosystem work.

Going far back into Sweden's history, government has always loomed large. Sweden still even has a king, though true political power is exercised by a democratically elected prime minister and parliament. A culture of looking to the state for help and guidance has led to the Swedish view of individualism as one of "state individualism," as Schier puts it, where the state provides enough basic services well enough to fulfill individual needs, and thereby mitigates the desire to seriously question the system or pursue personal wealth very aggressively.

The concept of state individualism is foreign to most Americans. The U.S. was born out of a fight to throw off the monarchy, and the concept of limited government was embraced early on. The uproar over the Affordable Care Act exemplifies many Americans' queasiness about government. Far from the single-payer, government-run health-care system that most industrialized nations -- like Sweden – employ, Obamacare continues to be criticized as socialism, at least from some quarters.


Increase your money and finance knowledge from home

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

Add a Comment

*0 / 3000 Character Maximum

9 Comments

Filter by:
drpmindmender

Dopey Obamite - Another meaningless commenter, posting meaningless comments, that mirror his meaningless existence.

May 14 2014 at 11:47 PM Report abuse +1 rate up rate down Reply
teaparty2implode

d.barack is sill a coward.

May 14 2014 at 9:03 AM Report abuse +3 rate up rate down Reply
teaparty2implode

Jobless Benefits That Never Run Out

Unlike here, in Germany jobless benefits never run out. Not only that -- as part of their social safety net, all job seekers continue to be medically insured, as are their families.

In the German jobless benefit system, when "jobless benefit 1" runs out, "jobless benefit 2," also known as HartzIV, kicks in. That one never gets cut off. The jobless also have contributions made for their pensions. They receive other types of insurance coverage from the state. As you can imagine, the estimated 2 million unemployed Americans who almost had no benefits this Christmas seems a particular horror show to Europeans, made worse by the fact that the U.S. government does not provide any medical insurance to American unemployment recipients. Europeans routinely recoil at that in disbelief and disgust.

In another piece the Spiegel magazine steps away from statistics and tells the story of Pam Brown, who personifies what is coming to be known as the Nouveau American poor. Pam Brown was a former executive assistant on Wall Street, and her shocking decline has become part of the American story :

American society is breaking apart. Millions of people have lost their jobs and fallen into poverty. Among them, for the first time, are many middle-class families. Meet Pam Brown from New York, whose life changed overnight. The crisis caught her unprepared. "It was horrible," Pam Brown remembers. "Overnight I found myself on the wrong side of the fence. It never occurred to me that something like this could happen to me. I got very depressed." Brown sits in a cheap diner on West 14th Street in Manhattan, stirring her $1.35 coffee. That's all she orders -- it's too late for breakfast and too early for lunch. She also needs to save money. Until early 2009, Brown worked as an executive assistant on Wall Street, earning more than $80,000 a year, living in a six-bedroom house with her three sons. Today, she's long-term unemployed and has to make do with a tiny one-bedroom in the Bronx.

May 14 2014 at 12:38 AM Report abuse +1 rate up rate down Reply
teaparty2implode

America in Decline: Why Germans Think We're Insane
A look at our empire in decline through the eyes of the European media.

December 26, 2010 |




As an American expat living in the European Union, I’ve started to see America from a different perspective.

The European Union has a larger economy and more people than America does. Though it spends less -- right around 9 percent of GNP on medical, whereas we in the U.S. spend close to between 15 to 16 percent of GNP on medical -- the EU pretty much insures 100 percent of its population.

The U.S. has 59 million people medically uninsured; 132 million without dental insurance; 60 million without paid sick leave; 40 million on food stamps. Everybody in the European Union has cradle-to-grave access to universal medical and a dental plan by law. The law also requires paid sick leave; paid annual leave; paid maternity leave. When you realize all of that, it becomes easy to understand why many Europeans think America has gone insane.

Der Spiegel has run an interesting feature called "A Superpower in Decline," which attempts to explain to a German audience such odd phenomena as the rise of the Tea Party, without the hedging or attempts at "balance" found in mainstream U.S. media. On the Tea Parties:

Full of Hatred: "The Tea Party, that group of white, older voters who claim that they want their country back, is angry. Fox News host Glenn Beck, a recovering alcoholic who likens Obama to Adolf Hitler, is angry. Beck doesn't quite know what he wants to be -- maybe a politician, maybe president, maybe a preacher -- and he doesn't know what he wants to do, either, or least he hasn't come up with any specific ideas or plans. But he is full of hatred."

The piece continues with the sobering assessment that America’s actual unemployment rate isn’t really 10 percent, but close to 20 percent when we factor in the number of people who have stopped looking for work.

Some social scientists think that making sure large-scale crime or fascism never takes root in Europe again requires a taxpayer investment in a strong social safety net. Can we learn from Europe? Isn't it better to invest in a social safety net than in a large criminal justice system? (In America over 2 million people are incarcerated.)

May 14 2014 at 12:26 AM Report abuse +1 rate up rate down Reply
JIM ISHOO

Swedes trust their poloticians because they are one with the people. Ours are bunch of thieves waiting to become member of something in the government to start milking the lobbyists.

May 13 2014 at 6:39 PM Report abuse +1 rate up rate down Reply
maccutcheon2

You can not compare Sweden to the US,that country is about like one state in the US,and maybe the people do not mind the taxes because they do not have as many dishonest politicians as we do.Due to the size of Gov.it is easyer to control.

May 13 2014 at 4:43 PM Report abuse rate up rate down Reply
headin2mo

Now lets flip teh coin and tell the world how Swedes feel about supporting all those muslims that moved to their country because of their great welfare system. Strange that wasn't mentioned in this article but their tax dollars are paying for them too!

May 13 2014 at 4:31 PM Report abuse rate up rate down Reply
createidea

LOL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Obviously an article written by a government supporting moron.

May 13 2014 at 1:20 PM Report abuse -1 rate up rate down Reply
1 reply to createidea's comment
drpmindmender

Another meaningless comment by a meaningless commenter, who never created a single idea during his entire, meaningless existence.

May 13 2014 at 9:23 PM Report abuse rate up rate down Reply
Scottilla

I hadn't noticed that Sweeden has lagged behind in education, business or scientific research

May 13 2014 at 12:11 PM Report abuse +2 rate up rate down Reply