From 1995 until 2016, Sweden’s GDP per capita saw a growth of 50%. In 2018, a study conducted by Oxfam Development Finance International called Sweden the country that is most committed to getting rid of inequality.
And, as per the World Happiness Report 2021, Sweden is the 7th happiest country in the world. So life in Sweden is good. But, do you know the reason behind this?
One Swedish citizen believes that it is because of the country’s purpose-driven politics. Last year this person posted on Facebook where they made an example of their life to explain Sweden’s healthcare, taxes, and other essential components. The post quickly went viral. Soon foreigners got the post in their feed as well. Among them, Americans particularly were quite jealous .
A Detailed Breakdown Of The System In Sweden
The person said that they worked for 40 hours in the week, earning about $3000 per week. Every month, they pay taxes worth $752 (pr 25%). That leaves them with $2278 at hand to spend each week. But that’s not all.
For instance, because they are a taxpayer, they automatically get a number of healthcare privileges:
“Because I pay taxes:Facebook Post via Boardpanda
I won’t go bankrupt if I would end up in a hospital.
I will not be disqualified for any surgery because we all have the same right to healthcare.
A heart transplant would cost me 10$ a night for staying at the hospital, the heart would cost me 0$
If I need meds like insuline I would only be paying a maximum amount of 250$ a year because you’re not allowed to benefit from people who are sick and need the meds to survive.”
It’s Not Just Healthcare Either
Apart from healthcare, taxpayers in Sweden also get a ton of benefits when it comes to education. The post read:
“Schools are free of charge and so is lunch at school. Often 3-4 different things to choose so everyone can be fed (and it’s also healthy food)Facebook Post via Boardpanda
Borrowing books from the library is free of charge.”
They explained that their taxes were used for the social benefits and healthcare of every taxpayer in Sweden. They then gave a detailed breakdown of his monthly costs. About $1043 remained for them to spend on entertainment and other optional bills. By the way, their monthly expenditure included: union fees, student loan repayment, car insurance, petrol, food, private insurance, house loan repayment, and heating and electricity bills.
Of course, living closer to bigger cities and more luxurious homes can increase the cost of living, but it would still be very little. The resident of Sweden added that they had a simple reason behind the informative post:
“... [to] give you info about how a whole community and yourself included, can and will prosper from paying taxes which involves looking out for everyone’s interest and not just your own.”Facebook Post via Boardpanda
To give a simple demonstration of why that works, here is the poster’s example:
“If a person is healthy, they can work. Then the company they work for will be successful because they contributed to it. If a company is successful, it will make money. When they make money, the employee will get a raise (although this is something people get every year in Sweden to level out other things that might have increased). If the employees are paid enough, they will be able to pay their bills and they will have money left to spend in a store (so that business can continue to be successful and they will make money so employees can get a raise, etc)”Facebook Post via Boardpanda
The FB user believes that the top 1% of the richest people do not understand the importance of this chain when it comes to paying taxes and healthcare for everyone.
Sweden Has Pretty High Taxes To Accommodate For All This
According to the Tax Foundation, countries in Scandinavia are famous for their wide social safety nets. Plus, their government funding for services like universal healthcare, etc is a huge amount. But the public spending can only be this high because of high taxation rates. In 2019, Sweden’s tax-to-GDP ratio stood at 42.9% whereas, for the US, it was only 24.5%.
As such, the country’s tax rate is among the highest in the West. As to why the system in Sweden works, experts like to talk about something known as the “tax wedge” – representing the difference between the amounts an employee costs to an employer and the net disposable income available to the employee. In 2020, the tax wedge for an average worker in Sweden was 42.7%. In comparison, for an average American worker, the tax wedge is 28.3%.
The benefits of the almost-free healthcare and public services have a very practical example: the average life expectancy of citizens of Sweden is 83 years.
On the international stage, Sweden is one of the most prosperous countries that ensures equal distribution of wealth among its citizens. And the viral Facebook post shows that there definitely is much to learn from how Sweden is run. And that holds true especially for the USA, a country that does not really like taxation.
- “The Swedish model.” Government
- “THE COMMITMENT TO REDUCING INEQUALITY INDEX.” CDN
- “In a Lamentable Year, Finland Again is the Happiest Country in the World.” World Happiness. March 19, 2021.
- “‘I Don’t Mean To Rub Salt In Your Wounds’: Swede Tells Americans What It’s Like To Live In Sweden And It’s Eye-Opening.” Bored Panda. Ilona Baliūnaitė and Rokas Laurinavičius.
- “How Scandinavian Countries Pay for Their Government Spending.” Tax Foundation. Kyle Pomerleau. June 10, 2015.
- “Revenue Statistics 2020 – Sweden.” OECD
- “Revenue Statistics 2020 – the United States.” OECD
- “Taxing Wages – Sweden.” OECD
- “Tax wedge.” OECD
- “Life expectancy at birth, total (years) – Sweden.” World Bank