Sweden Has a 70 Percent Tax Rate and It Is Fine

[Independent voter]

One thing missing from the discussion so far is the point that a 70 percent top tax rate exists, not merely in midcentury US tax codes or in academic papers, but also in the real world right now. Sweden has a 70 percent marginal tax rate and it kicks in, not at $10 million like AOC proposes, but at around $98,000. AOC’s proposal is quite modest by comparison.

According to the OECD, single Swedish workers making over 867,000 SEK (around $98,000 at prevailing exchange rates) face a 70 percent overall marginal tax rate on all labor compensation earned above that threshold. The below graph decomposes this overall marginal rate into its three parts and shows how much is left for take home pay:

Where do Swedish earnings over $98,000 go?

21.5% Central Income tax
24.7% Local Income tax
23.9% Payroll tax

Leaving about 30% take home pay

https://www.peoplespolicyproject.org...nd-it-is-fine/

I bet the tax system encourages people to aim for a lower salary were the high taxes don't kick in. Instead of $98K they might shoot for $50K.

[Soeroah]

You'd have to be pretty stupid to aim for $50k instead of $98k just to avoid a marginal tax rate.

[Machismo]

I bet the tax system encourages people to aim for a lower salary were the high taxes don't kick in. Instead of $98K they might shoot for $50K.

That doesn't even make any sense. Do you know how graduated tax systems actually work?

Are you the person who thinks that a person will make less money when moving up a tax bracket?

[Dezerte]

We have a progressive tax system, like most economies, so you'd be losing that bet.

[Afrospinach]

I bet the tax system encourages people to aim for a lower salary were the high taxes don't kick in. Instead of $98K they might shoot for $50K.

That is not how taxes usually work.

Every dollar you earn past 98,000 is taxed at 70%, everything you earn before that is taxed like everyone else.

[Najnaj]

I bet the tax system encourages people to aim for a lower salary were the high taxes don't kick in. Instead of $98K they might shoot for $50K.

Pure nonsense. If they could not figure out how the payroll fees are calculated I have my doubts for the rest.

[Spectral]

For some values of "it is fine" I guess. The most recent OECD data shows that the average Swedish household has about $14K/year less disposable income than the United States. Across all of the OECD's income measures, there's a large gap between Swedes and Americans.

As a relatively high income American, I would not be enthusiastic at all about being more like a relatively high income Swede, financially.

[Lazuli]

You'd have to be pretty stupid to aim for $50k instead of $98k just to avoid a marginal tax rate.

I have a lot of co workers who refuse to over time and I'm like why.. especially during holidays. Their answer is always higher bracket, more taxes. It makes no sense you're still making a fuckton more it's not like you're suddenly going to break even.

[Najnaj]

That is not how taxes usually work.

Every dollar you earn past 98,000 is taxed at 70%, everything you earn before that is taxed like everyone else.

It is even lower than that since a bunch of that is added on top of your salary and payed by your employer.

- - - Updated - - -

For some values of "it is fine" I guess. The most recent OECD data shows that the average Swedish household has about $14K/year less disposable income than the United States. Across all of the OECD's income measures, there's a large gap between Swedes and Americans.

As a relatively high income American, I would not be enthusiastic at all about being more like a relatively high income Swede, financially.

But after you have "disposed" of that American income to get all the shit we get for free in Sweden ...

[Soeroah]

I have a lot of co workers who refuse to over time and I'm like why.. especially during holidays. Their answer is always higher bracket, more taxes. It makes no sense you're still making a fuckton more it's not like you're suddenly going to break even.

I'm constantly astonished how people think a person earning one dollar less than the next tax margin is better off than the person earning one dollar more than the tax margin.

[Spectral]

But after you have "disposed" of that American income to get all the shit we get for free in Sweden ...

OECD disposable income accounts for this already. They also show household net financial positions, where the average American household has accumulated nearly double the average wealth of the average Swedish household.

If you're using the personal "you" rather than the general "you", this is even more true - I would be substantially worse off with a chunk of my income being taxed at top Swedish marginal rates and my personal return wouldn't be even close from a few freebies.

[Spectral]

I have a lot of co workers who refuse to over time and I'm like why.. especially during holidays. Their answer is always higher bracket, more taxes. It makes no sense you're still making a fuckton more it's not like you're suddenly going to break even.

People are largely innumerate. Just stop being surprised by that and you'll be surprised less!

It's also pretty funny in the context of hourly jobs. The tax brackets aren't sufficiently high in most of these positions for it to be even remotely relevant that it's a higher bracket on the marginal return. Until someone makes $38,700/year, the rate is 12%. From $38,700-$82,500, it's 22%. Who gives a shit about 22% taxes?

[Prothynyas]

No they have not !!! And mmo champion is not face book where you can posts yr crappy posts !!

[Usernameforforums]

So if you make $200k gross the net would be $128k(minus whatever normal tax is for less than $98k)?
Fuck that. I would just make the 98 and stop for the rest of the year.

[Toppy]

The raw ignorance in this thread is staggering.

[XDurionX]

The raw ignorance in this thread is staggering.

You're not in Hubcap threads a lot...

[NihilSustinet]

I bet the tax system encourages people to aim for a lower salary were the high taxes don't kick in. Instead of $98K they might shoot for $50K.

you know taxes are marginal, right? you really should have any clue about what you are talking about before you make the 50 retarded posts you make every day

[Krille]

I dunno man, i pay 30% income tax. Then there's an added 20-25% tax on goods (like an item costing 1 dollar is 1.2 dollars here). Even if you're a top earner you're at max taxed at 50% which basically means 30% on your entire salary and then another 20% on the salary above the threshold.

[dlld]

That doesn't even make any sense. Do you know how graduated tax systems actually work?

Are you the person who thinks that a person will make less money when moving up a tax bracket?

https://cdn.discordapp.com/attachmen...2019-01-06.png

https://cdn.discordapp.com/attachmen...19-01-06_1.png

https://cdn.discordapp.com/attachmen...19-01-06_2.png

https://cdn.discordapp.com/attachmen...19-01-06_3.png

[Krille]

OECD disposable income accounts for this already. They also show household net financial positions, where the average American household has accumulated nearly double the average wealth of the average Swedish household.

If you're using the personal "you" rather than the general "you", this is even more true - I would be substantially worse off with a chunk of my income being taxed at top Swedish marginal rates and my personal return wouldn't be even close from a few freebies.

I hope you realise that the filthy rich people in the US brings this average up by a lot. The difference between the richest and the poorest is (by OECD numbers) twice as big in the US compared to Sweden. Also, are you sure that insurances are accounted for in this number? Because we don't pay crazy insurance money in Sweden.