L.A Times Tax Rates May Be Increased in Sweden. Yes, Sweden. "Business owners cite a loss of jobs to countries with more competitive tax regimes to challenge Social Democratic party members." By Nicholas George, Financial Times STOCKHOLM — Musings by Sweden's governing Social Democratic party that it may raise what are already Europe's highest tax rates have dismayed the country's business community and raised fears that the move will backfire. Prime Minister Goran Persson has vowed to raise taxes if needed to protect the "Swedish model" of welfare. "How many houses and apartments will have flat-screen TVs, how many more cars and how much more private consumption shall there be and how much shall we invest in what is common to us all?" he said in parliament last week. Sweden has the highest tax burden in the Organization for Economic Cooperation and Development, estimated by Eurostat at 51.4% of gross domestic product in 2003. Last week Par Nuder, the finance minister, echoed Persson's view that there was a need to increase tax rates to meet voters' expectations for better public services such as education and healthcare. Nuder added that he expected other European countries to consider higher taxes to cope with aging populations and weak public finances. But Per Edin, former chief economist at LO, the main blue-collar trade union organization, said higher taxes made it "difficult to get the economy to function well." Among independent economists the tone is sharper. Ingemar Hansson, head of the National Institute for Economic Research, a government agency, said there was a risk "people will work less," while Jan Haggstrom, chief economist at Svenska Handelsbanken, described the idea of raising already-high taxes as "absurd." The fear is that higher income taxes, the most likely target for increases, will lower incentives to enter the labor market, therefore undermining the government's attempts to raise tax revenues. This at a time when the size of the workforce will already be under pressure because of demographic trends. Ebba Lindso, director-general of the Swedish Confederation of Enterprise, said the country's tax rates were distorting investment, savings and labor-leisure decisions, having a negative effect on growth. "We are deeply concerned when the government [calls] for even higher taxes. Production and jobs are leaving Sweden at far too high a rate, even if globalization also entails large benefits to Swedish society," he said. Nuder is skeptical of the orthodox criticism of high taxes. Despite high rates — which have been unchanged for most of the last decade — the Swedish economy has grown faster than the EU average for the last 10 years. Gross domestic product last year increased by almost 4%, and growth this year is forecast to be more than 3%. Nuder appears intent on emphasizing traditional Social Democratic party values — for example, scorning "well-paid advisors" who have told the government to sell state assets that generate solid revenues. Sweden has "no plans in the near future to make any major privatizations," he said in an interview. Instead, the government is trying to bring down the number on sickness benefits and has launched an initiative to tackle fraud in the social security system. For Nuder, the security provided by Sweden's benefit system plays a key role in creating the preconditions for growth. Business owners who are less convinced cite a movement of jobs to countries with more competitive tax regimes, among them the new EU members. But Nuder dismisses the threat of Eastern Europe. "I am absolutely convinced that as people [get] richer in these countries they will follow the way Western European countries have gone," he said. "People will demand more from society, they will demand a stronger public sector. "They want not just to have new cars but to have better roads to drive on."
Any federal tax above and beyond what we need to pay for a Defense Department and a Justice Department is too much. A flat tax of 15% should be plenty.
I've heard of this going both ways. Raising taxes too much can lower incentives for some to go into the labor market, then I've read where some people end up not wanting to work because the gov't is providing so much through social programs,so why work? This type of socialism seems to work against itself.
All taxes are too much, IMO. I am pretty much against taxes, though a flat tax would certainly be better than what we have now.
Someone asked me the other day for the correct spelling of number 90. She was making out a check for her Quarterly Estimated Federal Tax Payment. My reply: N-i-n-e-t-y-Y-o-u-B-a-s-t-a-r-d-s-!
