While I love Sweden’s response to COVID (which was to pretty much do nothing. No lockdown, no bullsh*t masks), their country is no role model for a successful government.
The Swedish tax rate is still completely insane.
Let’s consider a story of buying one single gallon of gas in Sweden.
The Story of Mr. Swede
Mr. Swede wants to buy a single gallon of gas in Sweden.
He works for one hour to get gas money.
Work pays $25 for that hour of work.
20% income tax takes $5.
32.12% municipal tax takes $8.03.
7% pension tax takes $1.75.
Mr. Swede pays $14.78 immediately before even receiving his paycheck.
He is already down to $10.22 from his original $25.
Mr. Swede then goes to buy gas:
8.425 kr per liter petrol tax. For ease, we say 4 liters is 1 gallon.
That’s 33 kr per gallon or $3.76 in gas tax.
That includes all of the fuel taxes including the VAT tax, the energy tax, the carbon dioxide tax, and the VAT on the energy tax (which is a tax on a tax).
Normal price of gas in Sweden is 7-8 SEK per litre, so ~30 SEK per gallon which is $3.42 per gallon.
Mr. Swede is confused because the total gas tax costs more than the actual gas itself, an over 100% effective tax rate ($3.76 in tax, $3.42 in cost; ~110%).
Mr. Swede buys that single gallon of gas.
Mr. Swede must pay $3.76 + $3.42 for gas tax and gas price. Total of $7.18.
He is left with $3.04.
One hour of work ($25) thus resulted in Mr. Swede paying $18.54 in taxes, getting a single gallon of gas, and keeping ~$3.
Mr. Swede emigrates to Italy.
Mr. Swede does not have enough money to buy another gallon of gas. He must go to work to make more money to buy more gas to get him back to work so he can pay more in tax.
That’s a tax rate of 74.16% and Mr. Swede hasn’t even paid taxes on whatever he will use the $3 for yet, so he will likely end up around an 80% effective tax rate.
One hour of work got him $5 to use personally and $20 to send to the taxman.
This also doesn’t factor in their other absolutely insane tax rates.
Such as their payroll social security tax on employers (which is an indirect employee tax by reduced wages) which is 31.42%.
Or their corporation tax of 22%.
Or their 30% capital gains tax.
Or their 25% general VAT tax.
Or their 500 other smaller obscure taxes.
All of which either directly or indirectly impact Mr. Swede’s earnings and take home pay.
Remember: certain demographics look to these numbers and think this is a “good” tax system. They want the US to be like this.
If you hear someone praising Sweden’s system, run far the f*** away.