Timeline for Did Swedish tax rate ever exceed 100%?
Current License: CC BY-SA 3.0
12 events
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| Feb 14, 2018 at 14:44 | comment | added | DJClayworth | This problem is well known and exists in a lot of countries. But it's not what the question was about. | |
| Feb 13, 2018 at 18:40 | history | edited | Kevin Keane | CC BY-SA 3.0 |
Explained that this isn't technically a tax rate.
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| Feb 13, 2018 at 18:29 | comment | added | Kevin Keane | @jwenting - I could go along with the first part. It isn't technically taxation, but at the same time what really matters for the individual isn't tax but non-discretionary expenditures, whatever you call them. On the second part, you suddenly are talking about taxes and even specifically tax brackets. As for whether it's a "glitch", in a way that's true for all marginal tax rates (or broader, all marginal expenses). It's also irrelevant. It does trap people in poverty, whether as a glitch or not, and whether through taxes, fees, or whatever other required expenses. | |
| Feb 13, 2018 at 7:14 | comment | added | jwenting | @KevinKeane of course, but it's incorrect to call it taxation at over 100%, it isn't. It's a weird and inconvenient glitch at the boundaries between tax brackets, not an attempt to tax people into poverty or keep them there. | |
| Feb 12, 2018 at 18:52 | comment | added | Kevin Keane | @jwenting In the end, what matters is household income. To the single mother in that example, the money is gone from her budget whether she pays premiums to a private health insurance company, in income taxes, or in FICA taxes. Limiting yourself to just taxes (or even just income taxes) is pretty useless in this context. | |
| Feb 12, 2018 at 11:21 | comment | added | jwenting | @gerrit it wasn't relevant to her as she really did end up paying over 100% of her income in her highest income bracket. The people from Abba had the same thing happening, as did quite a few Swedish executives. It caused a major move of these people to other countries, at least on paper. So they didn't pay over 100% TOTAL tax, but over their highest bracket. | |
| Feb 12, 2018 at 11:05 | comment | added | gerrit | @jwenting I'm aware of the armoedeval. Seems like a good reason to consider replacing all those benefits by a Universal basic income, which would eliminate at least that problem. But that problem, as far as I'm aware, is only relevant for low income households/individuals, which certainly did not include Astrid Lindgren. | |
| Feb 12, 2018 at 10:28 | comment | added | jwenting | @gerrit yes, it's the same in the Netherlands. And was worse before the ziekenfondsgrens was abandoned. I once had to decline a raise because it would have put me over that boundary, but not enough to cover the increased health insurance premiums that'd resort. My then-employer changed my pay scale so I'd end up getting more after taxes anyway :) | |
| Feb 12, 2018 at 10:26 | comment | added | jwenting | incorrect. There is no income tax rate even approaching 100% in the US. There is no "poverty trap". The closest you can come is being close to a change in tax bracket that reduces government benefits when exceeded to the point where if the increase in income is marginal you may end up earning less than before the increase after taxes. But that doesn't mean you're paying more than 100% of your income in taxes. | |
| Feb 8, 2018 at 1:16 | comment | added | gerrit | Is that because the next dollar earned makes them lose access to certain benefits? | |
| Feb 7, 2018 at 21:47 | history | edited | Kevin Keane | CC BY-SA 3.0 |
Corrected a misreading of the study.
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| Feb 7, 2018 at 21:41 | history | answered | Kevin Keane | CC BY-SA 3.0 |