From: matsd@LINK.Physchem.KTH.SE (matsd@physchem.kth.se (mats dahlgren))
Newsgroups: soc.culture.nordic
Subject: Re: Ruling parties in Norden
Date: 17 Apr 92 13:33:52 GMT
Reply-To: matsd@LINK.Physchem.KTH.SE
Organization: Royal Institute of Technology, Stockholm

In article <1992Apr16.221415.6857@lth.se>, sundinKC@dna.lth.se (Anders Sundin) writes:
AS>
AS>I agree that there is certainly room for improvment in the Swedish tax system.
AS>However, I would like to point out that all percentages are not created 
AS>equal... :-)
AS>
AS>Correct me if I am wrong but should we not compare like this (I pull out my
AS>trusted HP calculator). Lets say that one US $ is 6 kr.
AS>
AS>Swedish taxes as above                            US taxes as above
AS> 300000                     "Cost of salary"                50000
AS>-111000  37%           employer tax | social sec    15%     -7500    
AS>-------                                                    ------
AS> 189000                         "Salary"                    42500
AS>-103950  34.65% (=55% of    Federal+local tax       38%     19000    
AS>-------          189 kkr)                                  ------
AS>  85050                  Money left for consumption         23000
AS> -18711  22% (18-25)         Tax on consumtion       5%      1150
AS>-------                                                 ------
AS>  66339                      What we have left              21850
AS>
AS>Then the swedish taxpayer has 66,339 kr ($11,056) left while the american
AS>has 131,100 kr ($21,850).
AS>If this is true (the 55% of 189000 seems high to me) then:
AS>a) What is normally called Salary should generally be multipiled by 1.6 before
AS>   it is compared with an american salary.
AS>b) Even then the swedish tax-payer has little more than half of what the
AS>   american has when all taxes are paid. (50.6% to be exact).
AS>c) If the federal+local tax (55% above) in Sweden then it should be recalculated
AS>   to (to 35% above) to compare directly to the american federal+local tax.
AS>
AS>It would be interesting to hear from americans how much they have to spend for:
AS>
AS>Item             Situation in Sweden.
AS>--------------   --------------------
AS>o Rent           Directly and/or indirectly subsidised.
AS>o Health care    Only minor fees to avoid abuse.
AS>o Dental care    Subsidised.
AS>o Schools        In general no fees to attend schools at any level.
AS>o Pension        Paid via the General Pension, ATP.
AS>o Sick-Pension   Paid.
AS>o Kindergarten   Large parts of it is paid.
AS>Etc.
AS>
AS>It would also be interesting to compare the standards of living for the
AS>unemployed, and for families with childeren who also recive a substantial
AS>child-salary (barnbidrag) until the children are grown up.

And this is commented by baker@Xenon.Stanford.EDU (Andrew Baker) who writes:

AB>This overestimates the US tax burden for several reasons.
AB>(1) Someone who only makes $50000 would not be in the very top tax
AB>bracket, and in any case, his *average* (as opposed to marginal) income
AB>tax rate would be far less than 38%.
AB>(2) Half of the Social Security Tax is a so-called "employer's
AB>contribution" which isn't included as part of gross income (and thus
AB>would not be subjected to further taxes).
AB>(3) Benefits (medical insurance, pension contributions, etc.) are
AB>usually supplied on top of the gross salary, and are thus also
AB>untaxed.
AB>(4) There are other loopholes.

Just a short comment to Andrew:  Your comments (2) and (3) above are not
valid here, since we are discussing the *total cost* from the employer's
perspective. 

I redid Anders's tax calculation.  Unfortunately Andrew didn't give any
other figures than those Anders used, so comparasion with these two will
not be just. I've been using the rules as I remember them from last
January. 

(I did this calculation on a Macintosh, so don't trust the figures too 
much [:-)])

							Amount left

If the employer's cost is 300 000 kr, the salary is 	219 000 kr
The 37% "arbetsgivaravgift" is added on the salary.

Firstly, you get to make a 10 300 kr (?) deduction   	208 700 kr
("Grundavdrag")

Then there are local taxes, varying from 26.65% to 
almost 35%.  I think the average is around 32%
		32% of 208 700 kr is 66 784 kr		141 916 kr

The state income tax is 20% on the amount exceeding
186 000 kr or so (might be 189 000 kr or 184 000 kr). 
	20% of (208 700 - 186 000) kr = 4540 kr		137 376 kr

When counting from this end, the moms is 20% on goods
and services not subject to the lower rate, then it is 
15.25%.  I'll average this to 18% (same proportions 
as Anders used).  18% of 137 376 kr = 24 728 kr		112 648 kr
(The American rate would be 4.76% when calculating
in this manner.)  (These precentages, 20% and 15.25%,
are the official ones - btw.)

Then you get your "grundavdrag" back, + 10 300 kr!	122 948 kr

Still, there are taxes to be paid on tobacco, alcohol, gasoline,
energy(!), cosmetics, etc.   These are, however, very hard to estimate
since they vary much from one person to another.  The resulting tax is
at least 59%.  

It is interesting to note that the remaining amount of money, 122 948
kr, is less than the underestimated (according to Andrew) 131 100 kr
left for the American taxpayer. 

Also, it is worth noting that at least two of the items on your list of 
items payed for by the state is (supposed to be) directly financed by 
the "arbetsgivaravgift", namely the ATP pension and the Sick-Pension.  
If you want unemployment "insurance" (A-kassa) this is in part payed by 
yourself from your remaining 122 348 kr.


********************************************************************************

  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.