Working Paper No. 1164

Taxation of Swedish Firm Owners: The Great Reversal from the 1970s to the 2010s

Published: April 7, 2017Pages: 31Keywords: H20; H32; L26; N44JEL-codes: Owner-level taxation; Entrepreneurship; Institutions; Sweden; Tax policy
Published version

Taxation of Swedish Firm Owners: The Great Reversal from the 1970s to the 2010s Magnus Henrekson


By the late 1960s, real effective taxation of income from individual firm owner­ship in Sweden approached 100 percent. A series of tax reforms initiated in the late 1970s reversed this situation.

This paper has a threefold purpose:

(1) to elucidate the thinking behind the vision of creating a largely market-based system without wealthy capitalists and how that vision guided the design of the tax system;

(2) to outline and evaluate the numerous changes in the tax code made since the late 1970s, the empirical and intellectual basis of these changes, and the implications of these changes for the taxation of individual firm ownership; and

(3) to compare the size of the largest individual wealth holdings in the mid-1960s to their equivalents in the 2010s and discuss in what sense and to what extent the general public’s views have changed regarding sizeable individual income streams and wealth derived from business activity.

Today, the tax code favors already wealthy individuals. By contrast, high labor income taxation combined with a high valuation of existing assets renders wealth accumulation difficult for persons with no initial wealth.

Magnus Henrekson

Contact

Ph: +46 (0)8 665 4502
magnus.henrekson@ifn.se

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

Omslag 2017 Institutional Reform for Innovation and Entrepreneurship.jpg

The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

Events

Seminars organized by IFN

 

To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se