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Liberal leaders Jan Björklund announced on Wednesday that they wanted to free Stefan Löfven as prime minister. But only if S meets the demands of the Liberals in a number of policy issues.
"If I raise a single issue, it is to reduce the marginal tax and abolish the tax on welfare," said Björklund.
The margin tax is a measure of the increase in a taxpayer 's income if it increases by a certain amount. If high-income taxpayers pay a much larger share of their income in taxes than low-income earners, marginal taxes are high.
READ MORE: Here is the policy on which Löfven and Lööf can agree
In Sweden, those who earn a lot of money pay taxes. Those who earn even more, more than $ 56,000 per month, pay an additional 5% government tax, called the host tax (see billing box).
State and social tax
This year, the national tax is limited to about SEK 39,000 per month. On income above this limit, a tax of 20% is levied.
The limit of the payroll tax is about 56,000 SEK per month. For incomes above this limit, the custody fee is deducted by an additional 5 percentage points. For those earning less than SEK 56,000 per month, lost wages taxes will have no effect on the portfolio.
The figures above apply after the basic deduction has been made.
The welfare tax therefore wants the Liberals to suppress.
"Sweden, compared to almost all other countries, already has high marginal taxes on average incomes and the highest marginal taxes on the highest incomes." This contributes to a less efficient tax system, where 39 hours worked is less than what it would have been otherwise, but also means that it's too bad to educate oneself ", writes the party on his website.
Jan Björklund earns a payroll tax
Last year, Jan Björklund earned SEK 1,307,000 before tax. This corresponds to about SEK 109,000 per month.
From this income, he paid SEK 32,765 in social tax. With his own policy, he had received 32,765 more after tax.
Frida Bratt: Ideologically difficult to explain
Stefan Löfven would be willing to meet the Liberals about the social security tax, according to information communicated to Expressen on Thursday. At the same time, his party would be divided.
Photo: ANNA-KARIN NILSSON
Frida Bratt, your Chancellor's economic website, Expressen, Your Money, believes that the Social Democrats will agree to abolish the social tax.
– The welfare tax applies to high-income earners. S raised the tax for them during this term. According to Frida Bratt, they abolished the tax deduction on income exceeding 50,000 jobs and limited the state's tax loss list with the left-wing party.
She keeps:
"It is ideologically difficult to explain to both voters and the party why this group is now suddenly cutting taxes." The Social Democrats might be perceived as unscrupulous, such as turning cap against the wind to maintain power in the government.
"The welfare tax can even be a bargain at a loss"
But the welfare treasure is badly favored by more than the liberals. The fact that Timbro, the liberal thinker on the market, wants to eliminate the tax will not surprise anyone, but LO has also agreed to release it, as part of a package in which other taxes should be increased.
Even among independent economists, the welfare tax is widely criticized.
READ MORE: Ebba Busch Thor: risk of freeing Löfven
Lars Calmfors is Professor of International Economics at Stockholm University. He says economists dealing with tax issues are in total agreement that a minimized welfare tax would at least have no major negative effect on public finances.
"The calculations that have been made show that the income tax can even be a matter of losses," he says.
Photo: EVA DALIN / COPYRIGHT PROTECTION. FREE USE OF M
The reasoning of economists is that a social welfare tax that was eliminated would allow people with high incomes to work more.
But most people who earn $ 55,000 a month or more do not work?
"It's not just hours worked, you can also increase the intensity of your work or choose a little more demanding work, which can affect your income," explains Lars Calmfors.
In the long run, lower marginal taxes can also lead to more people choosing to educate and focus on careers in high-income occupations.
– The effects on people's behavior are more important in the long run.
READ MORE: Björklund ready to release Löfven
The distribution policy explains Lars Calmfors, explains why the tax remains.
– I think it's important for the distribution policy. But if you are worried about a worsening of social assistance, increase the income gap, you can increase the capital tax or restore a property tax worthy of the name. These taxes would have much less negative effects on the supply of employment.
Lars Calmfors: No good basis for collaboration
However, he criticizes the way the Liberals and the center party submitted their lists of demands to the Social Democrats.
"Forcing the counterpart to a" tight right-hand turn "does not seem to be a good starting point for future cooperation – I understand that this is about internal party politics, but if you want to work together beyond the limit of block, the starting point can not be to show that you can force the counterpart to conclude without trying to find compromises offering reasonable results for everyone.
READ MORE: Splittring in the Social Democrats on the requirements of C and L
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