Swedish citizen reveals how great it is to live, work and pay taxes in Sweden, and people are vowing to move.
Sweden has one of the highest taxes in the West. Its GDP per capita rose by 50 percent between 1995 and 2016.
Despite high taxes, its citizens benefit a lot from services like healthcare, free education, generous parental-leave policies, and heavily subsidized care for the elderly.
Demonstrating why Sweden is one of the happiest nations in the world, a Facebook user revealed what they earn, the amount of taxes they pay, and government-provided services they're guaranteed. According to the World Happiness Report, it was the seventh-happiest country in the world in 2020.
The post soon went viral, with foreigners—especially Americans—getting jealous.
Check out the post:
Scandinavian countries are well-known for their broad social safety net and public funding of government-provided services. That includes healthcare, higher education, parental leave, and child and elderly care.
However, high levels of public spending require huge capital. Therefore, these countries charge high taxes on their citizens to meet their budget.
For instance, in 2018, Denmark's tax-to-GDP ratio was at 44.9 percent, Sweden's at 43.9 percent, while Norway's at 39.0 percent.
This compares to a ratio of 24.3 percent in the US.
According to Global Revenue Statistics Database, personal income taxes and social security contributions raise much of the revenue needed to fund their large-scale public programs.
For example, Denmark raised 24.5 percent, Norway 20.0 percent, and Sweden 22.4 percent tax revenue as a percent of GDP from individual taxes in 2018.
This compares to just 16.0 percent of GDP in individual taxes in the US.
One way to analyze taxation rates on wage income is to look at the Tax Wedge. The figure shows the difference between the employer's cost of an employee and the employee's net disposable income.
Let's have a look at 2018 revenue statistics.
The tax wedge for a single worker with no kids earning a nation's average wage in Denmark was 35.8 percent.
Meanwhile, in Norway, it was 35.9 percent while Sweden 43.0 percent.
Although Denmark and Norway are below the OECD average of 36.1 percent, their tax wedges are higher than those in the US, 29.6 percent.
By worldwide comparison, Sweden is a prosperous nation, and it always distributes its wealth between its citizens.
Its sociopolitical model consists of three pillars. A labor market that facilitates adjustment to change, a universal welfare policy, and an economic policy promote openness and stability.
Of course, such policies require higher levels of taxation, which is reflected in the country's high tax-to-GDP ratios.
Adopting policies similar to those in Sweden in the US would require higher levels of taxation.
If the US were to raise taxes to reflect Scandinavian countries, taxes would increase through higher social security contributions and personal income taxes. The country would also need to introduce a new VAT.
Business and capital taxes wouldn't need any raise if policymakers were following the Scandinavian model.
In fact, the corporate income tax rate would decline.
And after reading the now-viral Facebook post, many people think introducing similar policies in other countries would improve citizens' livelihood.
