Scandinavia is well known by tax activists as a confiscatory hell. So I went looking for very unhappy people who are pretty angry about the government taking so much of their hard earned money. What I found may not be Valhalla, but came close in satisfying people. Luckily I have good friends in Sweden so I could ask a lot of very snoopy questions and even get honest answers.
Sweden’s tax rate for individuals is 29-60%. U.S. is 0-35%. Sixty percent sounds pretty confiscatory. Our middle class friends, a couple with two good professional jobs (RN and Engineer) pay about 50% so I guess that might be about average. They also have the dreaded Value Added Tax (VAT) as does most of Europe. This is a national sales tax that is already included in the price. You don’t see it added so you can forget about it if you are not strapped for cash.
They didn’t seem too worked up about it. Probably because they get the money back in very essential services that put a safety net under everyone, especially families. They have excellent public schools, colleges, professional schools, medical care, elder care and unemployment benefits.
Here is what a couple with a new baby can count on. During your pregnancy you will have world-class prenatal care and delivery. When you take your baby home, your local family health clinic will send out a Registered Nurse each week to your home until you can bring the baby in to the clinic at about 5 weeks. Your child will receive monthly check-ups with a nurse and see a doctor if needed. You will have about 480 days of 80% pay parental leave so your baby gets a good start. You can split it between two parents. All in all you probably won’t need childcare until your baby is two years old, or more if you have vacation time stored up. At this time, “threeish” year olds go to family day care, paid for by the government. You can use it as little or as much as you need to. You only pay about $70 per month. At four, your child can go to all day pre-school with long hours for drop-off and pick-up. At six, off to elementary school with good after school care.
You can even work part time until your child is 8 years old and receive 80% of your full time pay. Fathers are encouraged to practice gender equity and take their shifts. Now that might rile up the big macho members of the Tea Party. Definitely sounds pretty bossy. Daddies who can’t cope with babycare might overlap with Mommy and use the time to get some much needed sleep in between watching soccer games.
University entrance requires no entrance tests and there are no fees. The government sends you living expenses every week. There are special scholarships and deals for students from other nations. You won’t come out of college with crushing loans. Many classes are taught in English. Everybody under the age of 45 speaks fluent English.
If you don’t have kids, you can clean up in the Golden Years. The government wants to keep you in your own home and will send helpers to you four (!) times a day for cooking, bathing, cleaning, medicine services. If you go really gorky you can enter a convalescent home without bankrupting yourself. Your portion would be means tested and with a reasonable ceiling. The elderly pay only 4% of their special needs costs out of pocket. Every municipality (like counties) are required to plan and provide for these inevitable services so people can age without the anxiety of pitiful living conditions.
The really mysterious part of this is why the U.S. didn’t offer all this during 1951-1963 when our federal income tax top rate was 90%! We did build a lot of intrastructure and state universities during that period but still…families were pretty much on their own. Even from 1963-86 we hovered around the 70-80% top margins. Where was our Valhalla? We are a rich country, aren’t we? Or at least some of us are filthy rich and getting richer with all time low tax rates for millionaires and billionaires.
Socialism…it’s an ugly word and battering ram in American politics. If we had it, maybe we too could speak English properly.
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Wow! I’m ready to move there! My greatgrandmother came from Norway. She was a mail order bride and lived in South Dakota. My dream is to some day visit her hometown Trondheim. I don’t think it was too nice there during WWII. I love your blog, Shirley. You are a professional writer!
While Sweden does have a higher tax rate than the US, you’re missing Social Security, Medicare, and State Income Taxes. In California, for example, you can get up as high as a 46% marginal rate. (Here’s a really interesting chart of marginal rate over income: http://dbaron.org/views/taxes-2007.html)
The Swedish VAT is actually a pretty big tax, at 25% for most things other than food and some other sustenance items. That’s a lot higher than in many states in the US.
How much do the Swedes pay in property tax? Having just bought a house, Property Tax is going to be about 11% of my income.
Fire it up Miss Shirley! Lawd knows we need the heat in these
wintry times we livin’ in!
Keep us laughing and thinking…and thinking.