• Sweden edition
 
Moderates push back promised tax cut plans

Moderates push back promised tax cut plans

Published: 16 Aug 2011 15:23 GMT+02:00
Updated: 16 Aug 2011 15:23 GMT+02:00

At a joint press conference with finance minister Anders Borg, Reinfeldt explained that the government nevertheless hopes to introduce the reforms as part of the 2014 budget.

Reinfeldt said the government wanted to be “responsible” and delay the measures in the interest of maintaining a healthy safety margin for public finances.

The measures to be postponed include a fifth-round of in-work tax credits (jobbskatteavdraget) and a plan to cut taxes for pensioners.

A planned raising of the income threshold for paying state income taxes will also be delayed.

According to the government's calculations, the tax breaks would have cost a total of 17.3 billion kronor ($2.68 billion).

Borg stated at the press conference that the costly tax reforms were simply too costly in light of the latest forecasts.

“If we had carried them out, we'd have come close to balance or had a clear deficit,” he said.

At the same time, Sweden's National Institute of Economic Research (Konjunkturinstitutet) cut its growth forecast for 2012 by 1 percent down to 2 percent.

According to the Institute, unemployment in Sweden will likely remain at 7.5 percent through the end of 2012.

“There continues to be valid reasons for changing both the in-work tax credit and the income threshold,” Borg said, but added that the coming autumn budget would be “significantly tighter” than previously indicated.

Problems in the European banking system will likely affect Sweden's economy, said Borg.

“We need to have safety margins for that,” he said.

He emphasised, however, that he thinks Sweden is well-equipped to maintain its economic stability.

Reinfeldt added that the Moderates' campaign promises had been divided up into “immediate” proposals, which would definitely be carried out and ambitions which were dependent on economic developments.

“We were clear with the voters about how we viewed the order of things,” he said.

TT/The Local/dl (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

19:35 August 16, 2011 by AlexCN4
We hope as Sweden to not be so much affect by crissis which will get soon in others european countries. If they have care with stability economy and a plan for this, will be good. I know that Sweden passed through a economy crissis in 82 until to 90 etc...Is sin now, Sweden is strong. In history was the most poor country.
19:43 August 16, 2011 by Abe L
There is always some excuse for not reducing taxes. Which is ridiculous in a country like Sweden where everything is taxed through the roof and most families have close to no discretionary income. It would in fact boost the economy substantially if people had more to spend.

In fact certain taxes, such as homeowners tax and the tax you pay when buying a house have a negative effect on the economy as it makes people even less able to purchase houses.
19:56 August 16, 2011 by Indignerad
Abe L: The world economy is going down the shitter, this is not the time to lower taxes. Reinfeldt and Borg are educated economists who are trying to maintain stability. Take your ideology elsewhere, it's not applicable in reality.
20:18 August 16, 2011 by rymagnusson
As little as I agree with M's ideology, they are at least far more responsible than the Americans of either party.
21:06 August 16, 2011 by astra2thor6
Read the FT about the success of the Moderates' financial wisdom ("Sweden raises rates for 7th time in a year" dated 6 July 2011). Makes me proud!
21:21 August 16, 2011 by Imperor
The only reason for this delay is that they have lost the majority in the Riksdag for the motion and can never pass it. To make it seem like "taking responsibility" they make it out like this, instead of loosing face!
21:35 August 16, 2011 by jacquelinee
@ Indignerad

I agree although I may have expressed it less strongly.

I have no problem paying taxes when they are used to maintain the standard of living to a high level. Taxation is necessary and although it is a pain in the hiney to pay taxes it is nice to drive on well maitained highways, use clean public toilets, have spotless road sides have hospital and medical care where you only have to pay minimally (yes people, fees are actually a form of payment) Perhaps more of the taxes should be alloted to improve the care and accountability of the medical system, but it is a fair one financially, albeit not perfect. It costs a small fortune for funeral and burial expenses in other countries. I know, my mom died in Canada last March and the buriel cost well over 75,000 :- Education costs are less although education like medical care is also an area that need a great deal of revamping.

I have no problem with not lowering taxes. The lowering of taxes usually means that the citizens who are not in the smaller, wealthier percentage of the populous are the ones that suffer more. Unfortunately, as in most countries, politicians are usually in the wealthy sector, so any tax and program cuts that are made are designed not to impact their "circle". That is just the sad reality. Tax cuts mean the general population suffers to some degree and in some respect.

Swedish government for the most is one of the worlds less corrupt ones, partially because of it's basic deparmentalised structure. When each department is sort of "self governing" in a way,it is far more difficult for óne basic corrupted "head" to poison the entire structure. We who reside in Sweden are fortunate, not so very much of the taxpayers dollars are "pocketed" as in other countries, maybe spent foolishly at times...but that is not the same thing.
21:47 August 16, 2011 by Abe L
Indignerad: There are other ways to maintain income as a government, you can still lower taxes. They could for one start charging for education and medial care, which are far more ideological then lowering taxes. People need discretionary income or they become very unhappy with far more pressing consequences.
22:09 August 16, 2011 by jacquelinee
Have you ever lived in a country that charges for education? A university education in Canada can cost anywhere from 280,000 :- to in excess of 2,000,000:- (and probably more) Every citizen should be able to have their children educated in order to succeed in life, not just the wealthy ones.

In the USA unless you have private heath insurance (which is expensive and not everyone can afford it ) If you get ill, often it can cost you your life savings, you have to sell your home and still end up in debt. Or worst case scenario, if you are less fortunate and have no home or savings and simply can't afford to pay, you are simply turned away. There have been incidents of people dying on the hospital steps because they did not have medical insurance and were refused treatment. By your name Abe L, I am assuming it stands for "Abe Lincoln" sorry if I am mistaken. If that is what it stands for, then possibly you are from the States and will know precisely what I am speaking of.

There has to be a better way of maintaining taxes than compromising citizens' health and fair education practises.
09:47 August 17, 2011 by Abe L
Jac, in the states there are plenty of opportunities for students to attend affordable state funded colleges in the US. The majority of the employed US citizens gets health insurance through their employer. There is no reason to make these things freely available, especially not if the best education in Sweden is not through 'free' institutions. It's perfectly acceptable for a student to work when in college to pay for their tuition and living.
09:58 August 17, 2011 by the fonz
I'm a Brit living here in Sweden. Whilst I don't agree with everything the government here does, the handling of the economy is not only sensible, it is fair and is a shining exapmle to the biggger nations. I do think tax is too high and may be a hinderance to investment in Sweden and as I ubnderstand it this government has made several tax reductions since taking office. It therefore proves that a lower taxed society will prosper as employment increases, spending increases and foreign investment increases. I believe official statistics proved in the UK following Nigel Lawson (I think it was him) cutting the top rate of income tax to 40% that the tax-take overall increased and the UK pulled itself out of bankruptcy.

I appreciate that the dynamics of the UK economy and Sweden are different, but the underlying principal is that a lower tax system will help the country prosper at every level.

I sincerely wish that the UK had such responsible, cautious policies and politicians as we enjoy in Sweden.
13:30 August 17, 2011 by engagebrain
Abe L

Sweden has one of the highest rates of social mobility, the USA is among the worst, in the Western world.

It's what you get when education and health care are commodities and on average the rich go the good universities and poor the get the rubbish.

Social mobility underpins a society where people are encouraged to maximise their potential, getting the best people into the most important jobs is good for everyone - and fair.
13:40 August 17, 2011 by Abe L
Engage: I agree with getting the best people on the right jobs, however that doesn't require certain things to be free and payed for by others. An intelligent and capable person will succeed professionally regardless.
14:23 August 17, 2011 by jacquelinee
@ Abe L.

It sure is a lot easier to succeed, be healthy get a masters etc when you have a rich family footing the bill. Of course you can succeed go to university and compete with those who have the financial ability to put their kids through university. You can put yourself in debt up to your ying yang and spend the first 10 years of your career paying off exhorbitant student loans. (sad for the poorer kids who can't get student loans) and the tax dollars can go instead to a glut of military expenditures utilized by war mongers like Bush who, in true southern style, are "Just itchin' for a fight", while education is reserved for the wealthy or indebted and those intelligent enough, but unable to have the financial means, only perpetuate a growing number of under educated and therefore, lower wage earners; The working poor or the unemployed due to lack of education. This is nothing new " The rich get richer and the poor get poorer"

I would rather by far have my tax dollars be placed into education and health care, than into a way overfunded military or into the pockets of corrupt politicians spending it on wining, dining, the purchase of private personal jets, trips to France for brunch, bailouts for their friends businesses, ladies of the evening etc. (Incidentally, with the exception of the overfunded militiary (truly american) These are incidents from Canadian Government history that I have only become aware of because they got busted)

Sweden should be commended, not crtiticised for using their taxation for the benefit of their citizens. While a tax break would really be nice, personally speaking (and I can only speak for myself) I would rather pay a bit higher tax to maintain good programs that benefit all who live in Sweden, not just the wealthy.
14:33 August 17, 2011 by engagebrain
13:40 August 17, 2011 by Abe wrtoe

Engage: I agree with getting the best people on the right jobs, however that doesn't require certain things to be free and payed for by others. An intelligent and capable person will succeed professionally regardless.

A few will succeed, otherwise there would be no social mobility in the USA. Equal access to decent education, housing, healthcare etc create a level playing field. Social mobility is higher in Sweden, which pretty much has a level playing field - the level playing field costs, but those who are more successful pay back more. Whereas in the USA, as Warren Buffet pointed out yesterday the rich pay lower rates of tax and social mobility is low..
12:13 August 18, 2011 by Borilla
@ Abe L

Are you in Sweden to stay or just here working for while? Sounds like you don't want to share the burden. The M's are not decreasing taxes because they don't have the votes to do it. Your solution is to improve the position of the rich at the cost of the poor, take food out of hungry people's mouths and force the elderly to make the terrible choices they have to make in the US; Do I buy food or do I buy the medicine I need to stay alive? If it weren't for global warming you could just put them on an ice floe, like the Inuit, and send them out to sea.
Today's headlines
Snake hunt after man claims playground bite
The Swedish adder. Photo: Piet Spaans

Snake hunt after man claims playground bite

A man claimed to have been bitten by a poisonous snake at a paddling pool in Gothenburg on Thursday prompting a hunt which ended without a trace of the offending reptile. READ  

Stockholmers sound off on 'beautiful Swedes'
Swedish girls in Stockholm. Photo: Susanne Walström/Imagebank Sweden

Stockholmers sound off on 'beautiful Swedes'

Following a Nordic survey in which Swedes were voted the "most attractive", The Local hit the streets to see what Stockholmers thought. READ  

Sweden keeps eye on Norway bomb threat
Norwegian police car at Oslo Gardemoen Airport. Photo: TT

Sweden keeps eye on Norway bomb threat

The Swedish Security Service (Säpo) have said that an "imminent terror threat" to neighbouring Norway doesn't yet affect Sweden although developments are being closely followed. READ  

Seven-year-old Swede cycles to Berlin
The Blomdahl family in Berlin. Photo: Private

Seven-year-old Swede cycles to Berlin

Edvin Blomdahl is seven-years-old. He also cycled from Sweden to Berlin, a journey of 370 kilometres, in four days. READ  

Opinion
'Gaza conflict needs help, not empty rhetoric'
Demonstrations at Sergels Torg in Stockholm. Photo: Kent Vilhelmsson

'Gaza conflict needs help, not empty rhetoric'

As the rhetoric rises at demonstrations in Swedish cities, Stockholm-based Israeli writer David Stavrou calls on Swedes to think before they shout and to cast a critical eye over much that is written and said about the conflict in Gaza. READ  

Brit's charity tractor trek heads for Sweden
The vintage tractor ready to travel from UK to north Norway. Photo: Peter Matheson

Brit's charity tractor trek heads for Sweden

A British man is set next month to drive from Scotland, across Sweden, and to the northern tip of Norway on a vintage tractor to raise money for a cancer charity. READ  

Sweden agency hikes heat warning to 'extreme'
This canine friend is not amused. Photo: TT

Sweden agency hikes heat warning to 'extreme'

Swedish weather agency SMHI has raised its weather warning to class 2, giving notice of "extremely high temperatures" in parts of the country. READ  

Songs for a hot Swedish summer
Ted Gärdestad. Photo: TT

Songs for a hot Swedish summer

Contributor Paul Connolly has put together a list of Swedish songs to capture balmy summer days, which in his neck of the northern woods are pushing the mercury above 35c for the first time in a century. READ  

Swedes suffer as buses boil in the summer sun
Photo: TT

Swedes suffer as buses boil in the summer sun

Stockholm's local traffic authority has received almost 300 complaints since June 1st with many regarding stifling heat on the city's buses, which lack air con. READ  

Grounded flights strand Swedes in Tel Aviv
Photo: Matt Rourke/TT

Grounded flights strand Swedes in Tel Aviv

UPDATE: About 270 passengers planning to fly to Stockholm are still stranded in Tel Aviv, and airlines have stated that flights will likely be grounded on Thursday as well. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Society
Swedes voted 'most beautiful' in the Nordics
Business & Money
Sweden demands EU clarity on Bitcoin tax
National
Swedish organic sales enjoy 'amazing' growth
Photo: Johan Nilsson/TT
Society
What's On in Sweden
Gallery
People-watching July 23
Blog updates

22 July

Det (The Swedish Teacher) »

"Hej! “Det” is a personal pronoun that can be used in many ways, and it might me confusing if you always translate “det” to English “it”. In this article I will do my best to guide you to how to use “det”. Det replacing a word, a phrase or a clause Let us begin with the less confusing..." READ »

 

22 July

PROTECTING GIRLS FROM ABUSE OF THEIR RIGHTS (The Diplomatic Dispatch) »

"Today (22 July) my Prime Minister, David Cameron, and UNICEF, are hosting the world’s first #GirlSummit in London. The Summit’s aim is to mobilise domestic and international efforts to end the appalling practices of Female Genital Mutilation (FGM) and Child Early Forced Marriage (CEFM). This is a high priority for the UK government and the Prime..." READ »

 
 
 
National
Swedish cops elect not to shoot 'angry elks'
Business & Money
New alcohol retail rules threaten micro-breweries
Gallery
People-watching Båstad
Business & Money
Sweden falls to third in global innovation index
Society
Swedish ornithologists keep webcam watch
Photo: Andreas Nordström/Image Bank Sweden
Gallery
Top ten Swedish beach hot spots
Tech
Swedish Wiki vet sets new content record
Photo: Fastighetsbyrån
Lifestyle
In Pictures: The Local's Property of the Week
Photo: Finest.se
Gallery
People-watching July 15-16
Photo: Ola Ericson/Image Bank Sweden
Society
What's On in Sweden
Photo: Lisa Mikulski
National
Hope springs eternal for expat pet shop owner
Gallery
Princess Estelle steals limelight at mum's birthday
National
Swedes risk infants' lives by covering up prams
National
Swede runs for office just using Bitcoin funds
Gallery
People-watching July 11-13
National
Malmö mayor slams Danish beggar ban
National
Swedish anti-abortion midwife sues county
National
Swede's salary chopped for Facebook use
Sponsored Article
Introducing... Your finances in Stockholm
Sponsored Article
Introducing... Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

718
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se