Political Economy



The Swedish conservative government's tax policy reminiscent of all conservatives politics - make the rich richer

Friday, 11 October 2013
More than 25 percent of the Swedish government's tax cuts and other initiatives programmed for next year will go to the tenth of the population who earn the most. A news analysis out today which has been examining the effects of the new government tax policy made that assertion.

The sector of the population with the least income will, however, only see a meagre 1 percent increase in their benefit from the current Conservative government. This comes from analysis made by the Swedish Parliamentary Research Service, which has produced some data analysis for the opposition parties.

Every year, the Parliamentary Research Service usually help the opposition parties examine how the government's budget will affect the various facets of the society.

 “We do not think it is a good development in which those who are getting richer are getting richer, and those who are poorer are gradually falling behind,” says Per Bolund, economic policy spokesman for the Green Party to radio Sweden.Sweish taxes

The government has unveiled a series of tax cuts and other changes to its budget - and about some Skr18 billion will go to households next year. Prime Minister Fredrik Reinfeldt usually emphasise that the tax cuts are targeted to affect low and middle income earners. During the recently televised party leaders’ debate last Sunday, he said on increased the Earned Income Tax Credit that this will affect common people such as nurses – the common people will get the tax cut.

It has now been analysed to determine who’ll benefit from the spoils of the budget and it shows that the richer the earner is the less taxes they’ll pay.

Commentators are now saying the action is similar to what right wing Conservatives’ parties usually do – pay their wealthy pals more and claim that the low earners should work harder and gain more education to reach their high paying threshold. For them a society that works very hard will see everybody earning higher and everybody likely taking more risks, starting businesses and running their own organisations. For the Conservatives, a society that works hard will not have weak people and will not have people who need support.

Therefore income earners above Skr42 500 a month would receive an average of Skr6,000 more in their wallets next year. For those with the smallest incomes - those earning less than Skr7,800 a month – they’ll get tax credit and other investments reaching less than Skr300, on average over one year.

A contributing factor to the income distribution emerging this way is that the government has increased the earning threshold  - that is the limit which people will have to earn before they start paying state tax.

“All income groups, all the people in different income groups are better off straight across, and it's a pretty fundamental difference between how the Swedish economy has developed, compared to many other countries,” says Ulf Krister Andersson, the Moderate party’s social security minister to radio Sweden.

Asked what is the justification that anyone earning more than Skr50 000 keeps over Skr6,000 more in taxes, while those who have little income and work very hard get a few hundred.
“I think that the great justice overall is that more people get to keep more of their pay. It is an important thing. Then you can always say that in the short term, all is not exactly what you want. But I think in the long term, it is important to know that if I work, I get to keep more of my salary, if I work extra, or get a new job or educate myself more, I get to keep even more. That is a fundamental and long-term condition for us to have high levels employment in Sweden,” says Krister Andersson.

However, Per Bolund, Green Party's economic policy spokesman believe that the government is doing a very wrong analysis. He feels that a major factor affecting the economic disparities is rather caused by poor education which makes it hard for people to have a good jobs security system. Therefore a good school system, is a great way to start helping students and future graduates to believe.
By Scancomark.com Team

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