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Swedes back housekeeping tax relief

Peter Vinthagen Simpson · 3 Mar 2010, 08:41

Published: 03 Mar 2010 08:41 GMT+01:00

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Despite the opposition agreeing to abolish the so-called "RUT deduction" several senior Social Democrats have been found to be regular users of the system.

Two-thirds of Swedes are in favour of keeping the system which allows households to gain a 50 percent reduction in a range of services including babysitting and cleaning, a new survey commissioned by the Confederation of Swedish Enterprise (Svenskt Näringsliv) shows.

The RUT deduction has been criticised by the Left Party and the Social Democrats for benefiting only the rich. The Green Party last week raised the possibility of retaining the system but on Sunday agreed to sign up to opposition demands to abolish it if they gain power after the autumn election.

The survey, compiled by Novus Opinion and involving 1,000 Swedes, also shows that there is widespread support for retaining the tax relief among Green Party voters with almost half stating that they want the system retained.

Social Democrat leader Mona Sahlin defended the opposition's position over the RUT deduction in a televised Sveriges Television debate on Tuesday conceding that while she had previously been in favour she now opposed the system on ideological grounds, arguing that the money could be better spent elsewhere.

Fredrik Reinfeldt defended the RUT deduction by claiming that it has created 7,000 jobs and encouraged a previously informal sector to become formal, thus generating taxes.

Despite the Social Democrat opposition to RUT several senior Social Democrat politicians make use of the system, according to the Aftonbladet newspaper.

Ylva Johansson and her husband, Erik Åsbrink, spent 50,000 kronor ($7,000) on household services in 2008, according to the newspaper.

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The couple are not alone in making use of the system, with former culture minister Leif Pagrotsky, former foreign minister Jan Eliason and former prime minister Göran Persson all named.

While Mona Sahlin has defended her colleagues by arguing that it is unreasonable to place higher demands on them, Left Party spokesperson Josefin Brink is more critical.

"It shows that this is a privilege that only benefits high income earners. It strengthens contempt for politicians as being people who only look after themselves," she told the newspaper.

Peter Vinthagen Simpson (news@thelocal.se)

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Your comments about this article

09:35 March 3, 2010 by hpunlimited
RUT is a strike of a genius. Everyone that needs help at home, people that are sick, old people, parents with children, women do not have to stay at home anymore and can go out and work and pay taxes while their children are taken care of. It creates real jobs, it makes the otherwise "under the table" sector "white" and can be taxed.

The social democrates somehow believes that certain jobs are "beneath dignity". But lets face it. No matter what, there is always someone that needs to pick up the trash, baby sit, clean houses. There is no escape from it. Removing RUT will only make these sectors go back to illegal immigrants that work under the table for slave wages. But I guess Mona Sahlin then thinks that these sectors are gone from the map by removing RUT. It is pretty much like the oestrich that puts its head in the sand.
11:39 March 3, 2010 by RoyceD
If you can't clean your own house then move to a smaller house. If you want the big house and big garden, then clean it your self. It is the people who think that having money some how makes them above cleaning that shapes this horrible class system we live in.

This type of system doesn't create 7000 jobs in a positive way, but in a negative way. If you want to pay someone to clean up your own mess I see no reason why you should get a tax break for it?

Remove the RUT and clean your own mess.
12:18 March 3, 2010 by xavidx
Nothing wrong with having a house cleaner.

I for one would like to know how the majority of the people cleaning houses feel about this. Perhaps they are happy to have work and it is a very positive thing for them.

Or maybe they are angry about working and want to be unemployed or get another job.

So if they dont want to clean houses then find another job. In order to do that you need to have an eductaion. And if you do have an education then the RUT system is not at fault. Perhaps some sort of descrimination for getting a different job is the problem.

Obviously the RUT system created a demand for a particular service and in turn created a demand for jobs.

And you get the whole supply and demand thing going on. Nothing wrong with Jobs.

Also people with Money usually worked hard to get it. I dont have much money but Im working hard and I think that one day I can have enouph that I can hire someone to clean my house.
12:34 March 3, 2010 by karex
It's not just house cleaning, it includes baby-sitting and how about the poor old ladies that can't handle scrubbing floors anymore, or single mothers that can't handle picking up a chain saw and cutting down large branches in their garden, or digging up root systems weighing hundreds of kgs?

RoyceD, I think you're too narrow-minded, and perhaps a bit envious, dare I say? Shouldn't people who work hard for their money have the right to choose how to spend it? If they choose to spend it to get some help at home instead of a couple of weeks vacation in Thailand, who are we to criticize? I wish that I could afford to have help cleaning my house and garden. Seeing as I have 12-hour work days, I would appreciate a little time to myself and my family instead of spending my entire weekends cleaning and doing the laundry, garden work, etc.

I know countries that don't have a system like this and the informal "labor" market is huge. That's a lot of taxes that are not being reported because an entire labor sector has gone underground. Not to mention abusing the laborers with slave wages that are offered.
13:35 March 3, 2010 by manamind
Ideologues have no place when it comes to whether or not a person who is willing to provide a service should be allowed the dignity of being fully registered etc.

What the proponents of the RUT's demise fail to understand is that it will not achieve anything positive. The fact is those families requiring assistance can only pay so much. So either hourly rates will fall generally, or people will cut back on their usage (these two things amount to the same thing); or, worst, the BLACK MARKET labor market will get a boost, removing thousands from the system.

This is a case of ideology getting in the way of practicality --- and seems to me to be a throwback to 1970s idealism.

It is plainly wring that if a company employs someone that company can deduct the costs form my topline, yet if I do the same as an individual, I may not be allowed any deduction.

And the abolitionists justification? That the money generated can be spent elsewhere? That assumes the level of spending on such services by individuals will continue at the same level (as set out above, it probably wont, because the individuals employing the service providers have a finite income). So in the end, what will likely happen is that the would-be individual employers will suffer, the service providers will suffer, and the government will be holding less tax receipts than they thought.

But moreover, why can a company deduct employment costs from topline, whereas an individual is not able to? What is food for the goose is food for the gander. Either one or the other but not both. Thus, the idea to abolish has no logical tenure.
13:44 March 3, 2010 by LailaC1
i think it is a brilliant system - those who say it is just for the rich are just jealous. This system gives people work and even if it was for the benefit of the better off (which it isn't) - why not? They pay taxes and contribute to society, so why aren't they entitled too?
14:48 March 3, 2010 by rumcajs
Help some people to have work by supporting the lazy. It's more complex than it looks.

Anybody who knows the prices out there? We have to think about the numbers cos if the difference is only a few coins, I wouldn't stop driving to work and take the bus at -20C if the petrol goes up just 1 or 2SEK / L.

If I pay a baby sitter so I can go to work, I have to be getting at least x3 the baby sitter's or it wouldn't be worthy. Guessing that the baby sitter gets enough to live ok (10000SEK min), you get about 30000SEK and if I got all that, I wouldn't mind paying 2000 more. Cos it'd be like buying a Rolls Royce and moan about the fuel. If the baby sitter gets less than 10k, that job should not even exist in 1st place.

Rich people can and will pay it anyway. The difference would be for people who can or cannot afort a claen up once per week, but I think the ones on that very border would preffer saving the money or drinking it one way or the other.
16:54 March 3, 2010 by izbz
Housekeeping done by someone else is consider a luxury, so if they who can afford that, why tax relief? If the person is too old to perform all these tasks that I can understand. Other than that???
20:11 March 3, 2010 by MyOpinion
Silly Lefties. This one single mistake could cost them this year's election. This was not the time do something as stupid as this.
21:38 March 3, 2010 by scanbyheri
izbz, you are a genius, remind me to buy you some beer next time we meet.
08:38 March 4, 2010 by xavidx
I dont thing the tax relief was for the rich people. I think it was to create jobs in a service industry that was struggling.
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