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Inequality of taxation also rife in Sweden with lower taxes for those with high income

Thursday, 29 September 2011
Sweden is a high tax environment and here the view is that everything single Swedish öre is taxed – yeah? Faults! A new report shows that high-income earners in Sweden pay lower taxes those low income earners.

Unlike in other countries trying to solve the economic crisis by taxing more people with higher incomes, in Sweden there is a difference in that those with comparatively lower incomes are taxed more than those with high salaries, according to the Audit giant KPMG.

In KPMG's new comparison of taxes in 96 different countries, Sweden places as low as 25th place in terms of income tax for people with an annual income equivalent to Skr100,000, that is approximately 675,000 dollars.

The actual collection of income tax and national insurance contributions for individuals at this income level is estimated at 34.6 percent in 2011. For 2010 the corresponding figures were 38.8 percent and then Sweden was classed at 11th place on the list.

“Sweden has become competitive in terms of income and is increasingly attractive to foreign investment. Taxes are certainly higher than in many other countries, but in return you get more in return for money,” says Helena Robertsson, business area manager at KPMG who participated in the survey.

Maximum removal of the income tax is done in Belgium, where it is around 48 percent of people with annual income equivalent to $100,000. Among European countries follow Croatia, Greece, Germany, Italy and France.

The list is somewhat different when comparing the annual incomes of $ 300,000, equivalent to around Skr 2million. Although there is a maximum tax collection in Belgium of 55.5 percent in 2011, Sweden comes 6th with 49.2 percent, from last year's third place.

This comparison of KPMG is for the average tax for high earners, that is what they pay in taxes on all their income. It is then counted in the Swedish tax credit, which also applies to wage earners who are better paid.

The situation is different in terms of marginal tax rates - what you pay in taxes on the top part of the income. Where Sweden is the highest compared to all countries, now with Denmark in second place, taking over from Denmark which was the leader last year.

The highest marginal tax rate, in Sweden now for people with an annual income of Skr560,900 , is up to 56.6 percent. There no other country that collects this much from its workers in the name of marginal taxes.
Because the higher marginal taxes are not open for any benefits, the combined marginal effects of an increase in income for Swedish high-income earners are therefore estimated at about 67 percent to be paid as taxes.

Taxes in many other places, however, are on the rise. Marginal tax rate is significantly higher in Greece, Luxembourg, Portugal, Spain and the UK. There, the taxes are there to contribute to be repaired the troubling economies which in crisis. In addition there are various kinds of temporary taxes, which later may prove to be permanent.
By Scancomark.se Team

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