Re:Beyond Spotify and iZettle: How Sweden became Europe’s ca...
by sonnyblarney on Saturday September 08, 2018 @05:26PM
(#17942863)
"No healthcare costs. Scraped elbow? Free. Brain surgery? Free.
- No saving up for college for my kids.
- No student loans tuition is free in all universities and colleges.
- Goverment-paid pension savings"
It's a little disingenuous to talk about all those 'free things' that 'others' or 'the government' are paying for, because it communicates that those costs are magically externalized.
They are not, of course.
Citizens are paying for all of those things through very aggressive taxation.
Denmark has basically the highest degree of government participation in the economy in the world. [1]
Taxation in Scandinavian countries run deep.
Swedens top tax rate is 67% (!!!) though this includes social security. Payroll tax (employer side of social security) is about 30%, deducted before transfer to employee. And then after you take your money home, you pay an additional 25% VAT on everything you buy.
Think about that: Swedish company allocates $100K to employee. ~30% deducted for SS, so employees income is really $70K. Now, you pay up to 66% of that in taxes (not at 70K, but for higher income earners - certainly a lot of Google folks would!), so say 50% taxes, 'take home' is now $35K. Now, you pay 25% taxes on everything you buy. Assume people save 10% conservatively, meaning $31.5K in spending, which is about $6 VAT taxes.
So from $100K in comp, you're paying $70K to the government.
In the US obviously it would be considerably less.
I know all this has been argued before, but it's important to consider how aggressive that taxation is, I don't think it's ever fair to talk about 'no student debt' or 'free healthcare' without taking into consideration that level of taxation.
The real issue is the cost vs. quality of things like healthcare.
Now - in Canada, we have similar levels of taxation as California or New York and we get healthcare out of that, so now that's something to talk about ...
- No saving up for college for my kids.
- No student loans tuition is free in all universities and colleges.
- Goverment-paid pension savings"
It's a little disingenuous to talk about all those 'free things' that 'others' or 'the government' are paying for, because it communicates that those costs are magically externalized.
They are not, of course.
Citizens are paying for all of those things through very aggressive taxation.
Denmark has basically the highest degree of government participation in the economy in the world. [1]
Taxation in Scandinavian countries run deep.
Swedens top tax rate is 67% (!!!) though this includes social security. Payroll tax (employer side of social security) is about 30%, deducted before transfer to employee. And then after you take your money home, you pay an additional 25% VAT on everything you buy.
Think about that: Swedish company allocates $100K to employee. ~30% deducted for SS, so employees income is really $70K. Now, you pay up to 66% of that in taxes (not at 70K, but for higher income earners - certainly a lot of Google folks would!), so say 50% taxes, 'take home' is now $35K. Now, you pay 25% taxes on everything you buy. Assume people save 10% conservatively, meaning $31.5K in spending, which is about $6 VAT taxes.
So from $100K in comp, you're paying $70K to the government.
In the US obviously it would be considerably less.
I know all this has been argued before, but it's important to consider how aggressive that taxation is, I don't think it's ever fair to talk about 'no student debt' or 'free healthcare' without taking into consideration that level of taxation.
The real issue is the cost vs. quality of things like healthcare.
Now - in Canada, we have similar levels of taxation as California or New York and we get healthcare out of that, so now that's something to talk about ...
[1] https://data.oecd.org/gga/general-government-spending.htm
[2] https://tradingeconomics.com/sweden/personal-income-tax-rate