stephanie
11-22-2008, 06:01 PM
The British want taxes kept low, but Gwladys Fouché discovers that in Sweden high rates underpin a successful societyGwladys Fouché
guardian.co.uk, Sunday November 16 2008 00.01 GMT
The Observer, Sunday November 16 2008
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Article history
Political parties have been vying to offer the biggest tax cuts as the credit crunch tightens its grip on Britain. In their view, low taxes are now the best way to get the economy going and to help out families.
Cutting or keeping taxes low has always proved popular with the electorate: in 1992 the Conservatives' election campaign slogan 'Labour's tax bombshell' made the most of the then shadow Chancellor John Smith's intention to increase the higher rate of tax from 40 to 50 per cent. Labour lost.
But is this the best way to proceed in the long term, and would UK taxpayers get better value for money if they paid more, rather than less?
One way to examine the issue is to compare state help provided by the British government to one which traditionally charges much higher taxes: Sweden. Swedes support the second-highest tax burden in the world - after Denmark's - with an average of 48.2 per cent of GDP going to taxes. Yet Sweden, along with equally high-taxing Denmark and Norway, tops almost every international barometer of successful societies.
Swedes' personal income tax can be as little as 29 per cent of their pay, but most people (anyone earning over £32,000) will pay between 49 and 60 per cent through a combination of local government and state income tax.
By comparison, the UK's tax burden is 36.6 per cent of GDP, the basic rate of tax is 20 per cent and the higher rate 40 per cent, plus National Insurance at 11 per cent for those earning between £105 and £770 a week, and 1 per cent for anything earned above this limit.
But for most Swedes paying high taxes is a benefit, not a problem. 'I am very happy to pay high taxes because I know I am getting value for the money later on,' says Valentina Valestany, a 39-year-old legal adviser. She is especially pleased with the school her daughters Westa, 15, and Anastasia, 13, attend. 'Lunches are free, it was no problem getting in. My daughters receive a very good education and they have great teachers.'
Nicholas Aylott, a 38-year-old British lecturer, is working as a political scientist at Stockholm's Södertörn University College.
'If you start talking to someone in Britain, you can be fairly sure that they will end up saying that taxes are too high. In Sweden, you can't do the same,' he says. 'Most people trust the state to manage taxes well. There's a broad, deep faith that the money going into the welfare state will be employed usefully.'
But he also points out that self-interest is at play: 'The median voter is a woman who works for the public sector, and around two-thirds of the electorate draw most of their income from the state, either because they work in the public sector or draw benefits from it.'
Overall though, he says, 'Swedes are very attached to the idea of the state as the People's Home. Everyone in society is under the same roof, everyone will be protected. Sweden is now a more diverse society, but this idea still persists.'
And Swedes are well provided for. Year after year Save the Children puts it at the top its league of countries where it is best to be a mother; the country is sixth on the UN Development Programme's human development index (the UK is 16th); and Unicef ranks it second in its table of child wellbeing in rich countries. Maybe Sweden proves that it's worth paying high taxes.
Childcare
Childcare is important to Aylott and his wife Elena as they have a young son, and in Sweden, they have found it affordable, available and generally of good quality.
'The kindergarten that our son Alex attends costs just 1,200 kronor (£97) a month. I have relatives in London who pay 10 times that,' he says. 'It was no problem finding Alex a place as there are plenty of local kindergartens where we live. In Sweden we are able to raise a young child and hold two demanding jobs at the same time. In Britain, it wouldn't be as easy.'
Aylott and his family are enjoying one of the many benefits Sweden offers its residents. Aside from universal kindergarten coverage, Swedes enjoy free schools - public and private - free health and dental care for under-18s, or generous personal benefits such as a child allowance of £1,080 a year per child.
read it all here..
http://www.guardian.co.uk/money/2008/nov/16/sweden-tax-burden-welfare/print
guardian.co.uk, Sunday November 16 2008 00.01 GMT
The Observer, Sunday November 16 2008
larger | smaller
Article history
Political parties have been vying to offer the biggest tax cuts as the credit crunch tightens its grip on Britain. In their view, low taxes are now the best way to get the economy going and to help out families.
Cutting or keeping taxes low has always proved popular with the electorate: in 1992 the Conservatives' election campaign slogan 'Labour's tax bombshell' made the most of the then shadow Chancellor John Smith's intention to increase the higher rate of tax from 40 to 50 per cent. Labour lost.
But is this the best way to proceed in the long term, and would UK taxpayers get better value for money if they paid more, rather than less?
One way to examine the issue is to compare state help provided by the British government to one which traditionally charges much higher taxes: Sweden. Swedes support the second-highest tax burden in the world - after Denmark's - with an average of 48.2 per cent of GDP going to taxes. Yet Sweden, along with equally high-taxing Denmark and Norway, tops almost every international barometer of successful societies.
Swedes' personal income tax can be as little as 29 per cent of their pay, but most people (anyone earning over £32,000) will pay between 49 and 60 per cent through a combination of local government and state income tax.
By comparison, the UK's tax burden is 36.6 per cent of GDP, the basic rate of tax is 20 per cent and the higher rate 40 per cent, plus National Insurance at 11 per cent for those earning between £105 and £770 a week, and 1 per cent for anything earned above this limit.
But for most Swedes paying high taxes is a benefit, not a problem. 'I am very happy to pay high taxes because I know I am getting value for the money later on,' says Valentina Valestany, a 39-year-old legal adviser. She is especially pleased with the school her daughters Westa, 15, and Anastasia, 13, attend. 'Lunches are free, it was no problem getting in. My daughters receive a very good education and they have great teachers.'
Nicholas Aylott, a 38-year-old British lecturer, is working as a political scientist at Stockholm's Södertörn University College.
'If you start talking to someone in Britain, you can be fairly sure that they will end up saying that taxes are too high. In Sweden, you can't do the same,' he says. 'Most people trust the state to manage taxes well. There's a broad, deep faith that the money going into the welfare state will be employed usefully.'
But he also points out that self-interest is at play: 'The median voter is a woman who works for the public sector, and around two-thirds of the electorate draw most of their income from the state, either because they work in the public sector or draw benefits from it.'
Overall though, he says, 'Swedes are very attached to the idea of the state as the People's Home. Everyone in society is under the same roof, everyone will be protected. Sweden is now a more diverse society, but this idea still persists.'
And Swedes are well provided for. Year after year Save the Children puts it at the top its league of countries where it is best to be a mother; the country is sixth on the UN Development Programme's human development index (the UK is 16th); and Unicef ranks it second in its table of child wellbeing in rich countries. Maybe Sweden proves that it's worth paying high taxes.
Childcare
Childcare is important to Aylott and his wife Elena as they have a young son, and in Sweden, they have found it affordable, available and generally of good quality.
'The kindergarten that our son Alex attends costs just 1,200 kronor (£97) a month. I have relatives in London who pay 10 times that,' he says. 'It was no problem finding Alex a place as there are plenty of local kindergartens where we live. In Sweden we are able to raise a young child and hold two demanding jobs at the same time. In Britain, it wouldn't be as easy.'
Aylott and his family are enjoying one of the many benefits Sweden offers its residents. Aside from universal kindergarten coverage, Swedes enjoy free schools - public and private - free health and dental care for under-18s, or generous personal benefits such as a child allowance of £1,080 a year per child.
read it all here..
http://www.guardian.co.uk/money/2008/nov/16/sweden-tax-burden-welfare/print