Papers give mixed reaction to Alliance tax plan

The main Swedish papers have given a mixed reaction to the centre-right Alliance's proposal to gradually abolish property tax.

The proposal would see taxation values of houses frozen in the first year after an Alliance victory, and an commission appointed to find ways of abolishing the central government-imposed part of the tax altogether by 2008. It would then be replaced with a system of local charges.

The fact that the four parties had agreed on the policy has been welcomed as a “major success for the Alliance,” by Svenska Dagbladet’s chief political editor P.J. Anders Linder.

“It wouldn’t have been fun for the Alliance parties to enter the election campaign with four difference proposals,” he writes in Wednesday’s edition of the paper.

Linder argues that the other tax faced by homeowners – capital gains tax – is not unreasonable “given that there is a large public sector to finance,” and given that people have the proceeds of their home sales to pay it with.

But, he says, “the annual property tax is paid from wages, savings or pension. If you have wages, savings or a pension. Otherwise you have to sell up and move.”

But Malin Siwe in Dagens Nyheter argues that property tax is not the only tax unrelated to earnings – what about VAT, she asks. Siwe also points out that the Alliance is not planning to abolish property tax as a whole, just to rename it a ‘local charge’ and reduce it. Besides, “Sweden’s prime tax problem is that we pay such a large proportion of our income from work in local taxes and payroll tax.”

The difference with property tax is that house owners pay it once a year in one lump sum:

“Imagine if we got our whole gross wage every month and paid the whole year’s income tax plus payroll tax in one go in April – then Swedes would scream about unfair income tax in the same way that they shout and scream about property tax.”

But for Sydsvenskan the Alliance’s announcement was all about politics: the four parties had stolen the Social Democrats’ thunder on the day Göran Persson was entertaining probable French presidential candidate Ségolène Royal in Visby. They had also identified a question that could give them a real lift in the opinion polls.

“It’s a welcome announcement. Partly because today’s valuations lead to unreasonable consequences, partly because it means that family policies are now the only major political area on which the Alliance is not united,” the paper’s unsigned leader argues.

Properties in Sweden