If lower taxes improve the economy...?

Question

why does Sweeden, with one of the highest tax rates in the world, have such a good economy?

http://www.heritage.org/research/features/index/country.cfm?id=Sweden

Sweeden might have been more productive, perhaps, but that is speculation. The reality is that Sweeden has had high taxes for a long time, and has nearly identical GDP per capita as the US (42,000 vs 44,000).

NC, I agree. It isn't so much the tax rate as how the taxes are used that determine if taxes are good or bad for the economy. It seems far too many Americans don't get this point. They want lower taxes, and more spending on things that benefit the economy the least- the plan to make the rich richer and the poor, poorer.

Answer 1

Sweden has very high INDIVIDUAL income taxes. Corporate taxes in Sweden are quite manageable; the top rate is 28% vs. 35% in the U.S. Additionally, Sweden adheres to territorial taxation principle; income received by Swedish citizens and businesses from abroad is not taxed in Sweden.

The question, however, is not only how much taxes you pay; an equally important issue is what you get in return. In Sweden, you get a world-class infrastructure, a corruption-free government, a high-quality legal system, universal healthcare, and a very decent educational system. On top of that, Sweden is a neutral country, meaning, it would not fight a war unless attacked.

Answer 2

Your challenge is meaningless. If the theory is that lower taxes *improve* the economy, then the current snapshot of the Swedish economy, however good or bad, says nothing about that.

The question is, would it have been BETTER than it currently is, if Sweden had had lower taxes?

Most likely, Sweden today is residing at a lower plateau of economic productivity than it would have been at, if it had implemented lower taxes for the past few decades. And in fact it is true that the Swedish economy is less productive per capita than, for example, the US economy, and its workers significantly less productive than American workers.

Note to Is it 5: comparing the productivity of two comparable nations you need to use *PPP* GDP per capita -- in which case the US beats Sweden 44,000 to 33,000. Pretty big difference. Exactly what fans of low taxation would expect. Yet all still is besides the point of the logical fallacy you committed.

Answer 3

If you look, Sweden recently cut taxes and reduced welfare benefits.