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Tax rise for high earners in Sweden

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Tax rise for high earners in Sweden
Prime Minister Stefan Löfven with Left Party leader Jonas Sjostedt. Photo: TT
15:05 CEST+02:00
Sweden's new coalition government has agreed to raise income tax for those earning more than 50,000 kronor ($6914) a month.
The deal was a compromise between the Social Democrats and their junior coalition partners, the Green Party, which had wanted the rise to kick in at 40,000 kronor. 
 
Prime Minister Stefan Löfven had previously suggested a figure of 60,000 kronor.
 
The government has also agreed to lower taxes for some pensioners who were previously being taxed more than workers with similar monthly incomes.
 
The tax rise -- in the form of tax rebate reduction -- is expected to raise in the region of 2.4 billion kronor in 2015 ($331 million, 264 million euros).
 
If it is approved by parliament it would affect tens of thousands of Swedes.
 
According to government estimates obtained by the newspaper Dagens Nyheter, the rise would mean those earning 1.5 million kronor a year paying 26,000 kronor more in taxes.
 
However, the government lacks a majority in parliament and would need the support of an opposition party to pass the law.
 
On Monday the coalition also presented details of its plans to ensure that Sweden's schools and hospitals are not run by companies or individuals who are purely motivated my making profits.
 
Stefan Löfven and Green Party spokesman Gustav Fridolin, along with Jonas Sjöstedt and Ulla Andersson of the Left Party, revealed details of the new deal on a "welfare system without a profit motive".
 
 
A special team will be appointed in January 2015 and tasked with developing legislation and presenting suggestions on how profits can be used to improve services. The findings will be presented in March 2016. 
 
The aim is that any profits should be reinvested within the service that generated them.
 
"Owners of companies within the welfare sector will have to be able to prove that they are interested in providing a service, not making a profit," said Left Party politician Andersson.
 
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