Americans often sigh wistfully when they hear the tales of the crazy long Swedish parental leave, the vacations, the subsidized day care, but then they stop themselves.
“Oh, but the taxes, they must be insane.”
“In a way, yes.” I usually answer. “But mostly, it's not too bad.”
And it's the truth. Recently the Moderates (the party in charge at the moment) decided they would increase the Job Tax Deduction once again.
Now if you aren't in Sweden you might be wondering what the hell that is. It is a decrease in the amount of taxes you pay on income that you earned through working. If your income is from the state, in the form of parental leave, sick leave, pension, welfare or anything else under the sun, you pay a higher tax rate than workers.
(The American in me still wonders why any of this state money is taxed at all, and why you just don't get a lesser amount without going through the game of paying taxes – but that's just old-me talking here – to be honest I have no idea if they deduct taxes from Social Security or welfare in the States)
A few details about Swedish taxes:
-There is no filing jointly, everyone files independently
-If you fall in the lower income bracket, you only pay local taxes. This is often between 28-32%
-If you earn in the higher income bracket (this year the limit is 383 000 SEK), you pay an additional 20% state tax on anything earned above that. (There is one more income level, over 548 000, you pay 25% state tax on everything above that amount.)
-There is a VAT of 25% on most store bought items (excluded are things like food, books, newspapers – which have a lower VAT)
-Your employer pays payroll tax which is above and beyond your taxes which is a little over 31%
The truth is, as a woman in my early 30's I feel like I have gotten back a hell of a lot more than I have put into the system. And to me, that is worth paying a little extra for. I see my tax money as an investment in myself, my children, and the place where I live. This is a huge contrast to how I viewed paying taxes in the US.