2014

The Rise and Fall of Swedish Wealth Taxation

Reprint No. 2014:24

Author(s): Magnus Henrekson and Gunnar Du RietzYear: 2014 Title: Nordic Tax Journal Volume (No.): 1 (1) Pages: 9–35
Preliminary version

The Rise and Fall of Swedish Wealth Taxation Magnus Henrekson and Gunnar Du Rietz


We study the evolution of modern Swedish wealth taxation from its introduction in 1911 until it was abolished in 2007. The rules concerning valuation of assets, deductions/exemptions and tax schedules to characterize effective wealth tax schedules are described. These rules and schedules are used to calculate marginal and average wealth tax rates for three differently endowed owners of family firms and individual fortunes corresponding to a large, medium-sized and small firm. The overall trend in the direct wealth tax was rising until 1971 for owners of large and medium-sized firms and for individuals of equally-sized wealth consisting of non-corporate assets. Average direct wealth tax rates were low until 1934, except for 1913 when a progressive defense tax was levied. There were three major tax hikes: in 1934, when the wealth tax was more than doubled, in 1948 when tax rates were doubled again and in 1971 for owners of large firms and similarly sized non-corporate fortunes. Effective tax rates peaked in 1973 for owners of large firms and in 1983 for individuals with large non-corporate wealth. Reduction rules limited the wealth tax rates from 1934 for fortunes with high wealth/income ratios. The wealth tax on unlisted net business equity was abolished in 1991. Tax rates for wealthy individuals were decreased in 1991 and in 1992 and then remained at 0.5-1 percent through 2006, depending on whether the reduction rule was applicable. Tax rates for small-firm owners and small individual fortunes were substantially lower. Aggregate wealth tax revenues were relatively small; they never exceeded 0.4 percent of GDP in the postwar period and amounted to 0.16 percent of GDP in 2006.


Reference:
Henrekson, Magnus and Gunnar Du Rietz (2014), "The Rise and Fall of Swedish Wealth Taxation". Nordic Tax Journal 1(1), 9–35.

Magnus Henrekson

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Ph: +46 (0)8 665 4502
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Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective

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Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

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