A SMALL INTELLECTUAL EXPERIMENT

We Swedes pay a lot of tax. I've complained about it before, and many others in the non-socialist camp has as well. But how much do we pay? I thought I might make a small intellectual experiment to illustrate what amounts it comes down to. For obvious reasons it won't be perfectly realistic, but it'll still be a decent approximation of the truth. Say that you have a monthly salary of $3000. That's a fairly low salary, but not much lower than average. To start with, this isn't the actual salary. What you don't see is the employer's fee, which is essentially an income tax, only paid by the employer. It's approximatly 1/3 of the declared salary - in your case $1000. This means that of your real salary of $4000 you only see $3000. Next comes the income tax, which varies slightly depending on were in Sweden you live. It'll be about 30% though. 30% of $3000 is $900 so of your salary of $4000 you get $2100 in your wallet. You've basically paid an income tax of 47.5% on an income that was fairly low to start with.

That's not all, though. For simplicity's sake we'll assume that you spend all of those $2100. Whenever you buy something you'll have to pay a VAT of 25% of the retail price. This isn't the whole truth - some products have a lower VAT, like groceries and books (12% and 6% respectively) but other things, like gas, alcoholic beverages and electricity have a much higher VAT (the taxes paid for gas make up about 2/3 of the price). To keep it simple we'll just assume that it average out on 25%, though in reality it could well end up higher. This means that of $2100 worth of consumption $525 are taxes. Out of the $4000 salary you've ended up paying a total of $2425 in tax, which is 60.6%.

If you happen to have any savings or a house on a attractive location you have to pay taxes for that too, but we'll ignore that for now.

60.6% tax on a person with a relativly small income. It all seems fair, doesn't it?

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