From: matsd@LINK.Physchem.KTH.SE (matsd@physchem.kth.se (mats dahlgren))
Newsgroups: soc.culture.nordic
Subject: Re: Ruling parties in Norden
Date: 16 Apr 92 18:56:55 GMT
Reply-To: matsd@LINK.Physchem.KTH.SE
Organization: Royal Institute of Technology, Stockholm

In article <1992Apr13.231413.28372@CSD-NewsHost.Stanford.EDU>, baker@Xenon.Stanford.EDU (Andrew Baker) writes:
>
>... before anyone
>decides that New Jersey (or anywhere in the US) is some kind of tax
>haven, I would like to note several things.  

And I'd like to comment on these from a Swedish point of view...

>The top federal tax rate
>is 31% right now, and presumably you have added the top New Jersey
>tax rate to get the 38%.  

The top federal (marginal) tax rate (on salaries) is 20%.  When local 
taxes (county and township) are added it's 55% or so (depending on where 
you live).

>However, there are also other taxes:
>(1) The U.S. Social Security Tax comes to around 15% (when you include
>both the employee and employer contributions).  If you make enough money,
>this marginal rate will eventually drop to 0%, but few people make this
>much.  There are also things like unemployment insurance and so forth,
>but these don't usually amount to very much.

The Swedish equivalent "arbetsgivaravgift" is 37%.

>(2) New Jersey has a sales tax.  When I lived there, it was 5%; on general
>principles, I would guess that it has gone up since then.

The Swedish sales tax (or VAT), "moms", is 25% according to the U.S. way 
of counting on all goods and services except for transportation, food 
and hotel accomodation, for which it is 18%.

>(3) Most towns have property taxes.  If you have a nice house, this can
>come to a lot of money.

The federal state collects property taxes.

>(4) A few big cities charge wage taxes to people who work there (so you
>get taxed where you live and where you work).

This is not practised in Sweden (correct me if I'm wrong).

>(5) Corporate income is taxed twice.  First corporate profits are taxed,
>and then any portion of these profits that are passed through either as
>dividends or as capital gains are taxed again as personal income.

Same here...

>(6) The taxation of investment income doesn't take inflation into account.
> [...]

Same here...

>(7) I have been told that the U.S. tax system is one of the most complicated
>in the world.  This means that if you want to find loopholes, it will cost
>you a lot in time and expert advice.

Fortunately, we don't have *this* problem to the same extent anymore.  
That's one of the good effects of the recent taxation reform.

>(8) U.S. politicians have a penchant for changing the tax laws with
>extraordinary frequency.  There are around four people running for President
>right now.  One wants to cut the capital gains tax.  Another apparently
>wants to create two new tax brackets above the 31% level (36% and 46%).  A
>third wants to create a flat income tax and a VAT, but apparently he has
>worked out so few details that no one can quite figure out what it would
>amount to in practice.  And still another guy says that we have to scrap the
>whole system and start over, but he won't know what needs to be done until
>he gets elected!  Needless to say, this is not the optimal situation for
>advance tax planning.

We sort of have the same problem.  Since some details in the taxation 
system changes from one year to another -- somtimes with short notice -- 
a *healthy* planning of one's economy is practically impossible.

Compared to Sweden, New Jersey seems to be pretty well off -- as far as 
taxation is concerned.  I'm aware other things are better in Sweden, but 
that doesn't lessen the need for improvements in some areas.

/mats d.
********************************************************************************

  mats dahlgren 
  Dept. of Physical Chemistry		Mail:	matsd@physchem.kth.se
  The Royal Institute of Technology	Phone:	+46 8 790 8595
  S-100 44  Stockholm, Sweden           Fax:	+46 8 790 8207

              All opinions expressed above are private opinions.