[thestephen]

As a Swede, it is interesting to see people using Sweden's tax policies for arguments without fully following the studies on our tax policies. There are studies showing that the highest margin taxes in Sweden actually lose more money than they make, due to dynamic effects. In other words, Sweden is far to the right on the Laffer curve.

Even low and medium income people – for example, assistant nurses straight out of school – pay half of their wages in tax – even at the 2000 USD post-tax a month range.

And since the 20% margin tax on top of that kicks in already at the equivalent of ~50k USD a year »pre-tax«, this creates a situation where it is very hard to build capital just by working. Basically, you can only get wealthy by:

* Earning money with money (tax on capital is a flat 30% - or potentially even way less, if you use a special savings account),

* Founding the next iZettle or creating the next Minecraft,

* Or have bought real estate when it was 50-90% cheaper (that is, 5+ years ago).

In practice, this creates a system which hampers class mobility in Sweden. Even if you are in top 1% of wages, it will take decades for you to catch up to the capital gains of someone who bought an apartment close to Stockholm five years ago.

So perhaps it's safer to say that Sweden is fine _despite_ our 70% tax.

[hoaw]

What you are saying is fairly correct, but I don't agree with your conclusions.

> There are studies showing that the highest margin taxes in Sweden actually lose more money than they make, due to dynamic effects. In other words, Sweden is far to the right on the Laffer curve.

Progressive taxation isn't merely about tax revenue, but income equality. You can't have a welfare state without much of the population being in "the middle".

> And since the 20% margin tax on top of that kicks in already at the equivalent of ~50k USD a year »pre-tax«, this creates a situation where it is very hard to build capital just by working.

That is true, but ignores the fact that it is simply also hard to make a lot of money. It wouldn't be unreasonable to be able to save €30k a year as a high income earner in Sweden. That isn't rich rich, but certainly wealthy.

> Earning money with money (tax on capital is a flat 30% - or potentially even way less [...] Or have bought real estate when it was 50-90% cheaper (that is, 5+ years ago). [...] In practice, this creates a system which hampers class mobility in Sweden. Even if you are in top 1% of wages, it will take decades for you to catch up to the capital gains of someone who bought an apartment close to Stockholm five years ago.

I agree that this is a huge problem. But I find it very unlikely that you would solve this by lowering the top tax rate. Most people who make money from capital would already be, or put themselves, in such a position. I would support lowering taxes on work in general and increasing taxes on capital, inheritance, loans etc. But that is unlikely to happen.

Basically I don't think the tax rate is unreasonable, but the low taxes on and high cost of e.g. housing definitely is. This is just a problem a problem with earning as much as someone who bought an apartment 5+ years ago, but if you don't own an apartment (or got into the housing market later) you will be paying 2x-3x what they are doing for housing while you are trying to catch up.

I would move from Sweden for this reason if it wasn't for wanting to be close to my family.

(And personally I wouldn't call Sweden fine from a wealth equality perspective).