Everything comes with a price. And so is the Swedish Welfare Paradise. Here are
some facts behind Swedish model:
Since the late 1960s, Sweden had the highest tax quota (as percentage of GDP) in the industrialized world, although... Denmark has surpassed Sweden as the most heavily taxed country among developed countries. Sweden has a two step progressive tax scale with a municipal income tax of about 30% and an additional high-income state tax of 20–25% when a salary exceeds roughly 320,000 SEK per year. The employing company pays an additional 32% of an "employer's fee." In addition, a national VAT of 25% is added to many things bought by private citizens... As of 2007, total tax revenue was 47.8% of GDP, the second highest tax burden among developed countries, down from 49.1% 2006.[67]
So, paying a salary of SEK 1000 means an expense of SEK 1320 for the employer. As for the employee - out of each SEK 1000 he only gets SEK 450 to 700 after tax; factoring the 25% sales tax, this only buys SEK 360 to 560 worth of goods. Payroll taxes, income taxes and sales taxes thus amount to 58% to 73% of what's originally paid by the employer. (In Canada those numbers are in the range of 30% to 50%.) No wonder Swedish private sector is stagnant and the country is heavily dependent on public sector jobs and make-work projects.
Public sector spending amounts to 53% of the GDP. State and municipal employees total around a third of the workforce, much more than in most Western countries. Only Denmark has a larger bureaucracy (38% of Danish workforce). Spending on transfers is also high.
...
Because of the contradiction—unemployment despite a growing commercial enterprise economy—politicians and analysts often speak of the "jobless growth". According to Eurostat the unemployment rate in February 2007 was at 6.7% down from 7.4% from February 2006.[69] No new net jobs have been produced in the Swedish private sector since 1950. None of top 50 companies on the Stockholm stock exchange has been started since 1970.[64]
Where do you think all the entrepreneurial spirits go?
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