An American living in Sweden on the higher taxes citizens pay there—and they're not that much higher than the taxes we pay here—and what the Swedish tax system buys Swedish citizens...
US critics say that Swedes pay 56 percent—so the government takes over half of your money. This is not true—56 percent is the marginal tax rate, i.e. what high earners pay on income over a certain amount in both state and local taxes. Only 15 percent of Swedes pay tax at this rate. It turns out the average Swede pays less than 27 percent of his or her income in direct taxes. As I've written elsewhere, my wife and I pay about 22 percent of our US income in taxes. Our Swedish income tax was 31 percent. So, yes, our income taxes in Sweden were higher than in the US, but we still paid less than one-third in tax.
And you get far more for your taxes than you do in the US. In Sweden, college is free and students get a housing stipend. A colleague's daughter, Kerstin, just completed a five-year dental program. Her family paid nothing for her education. The Swedish government gave her $340 a month to live on when she was in school and the right to borrow $700 more a month, which she did. After five years, she graduated with a debt of $37,153. In the US, dental students graduate with an average of $215,000 in debt from dental school alone.
What else do higher taxes buy the citizens of Sweden? Besides truly universal health care, an extensive public transportation system, generous parental leave and child care subsidies, a tax system that's not a massive, complex, and infuriatingly opaque Rube Goldberg contraption? Besides all of that? Freedom.
David Brooks, in a New York Times editorial, argues that if Americans paid European-style high taxes, it would "weaken the ability of members of the middle class to make choices about their own lives." Maybe Brooks needs to live abroad. Guys like Brooks seem to be proud that tax revenues in the US are only 26 percent of GDP (the third lowest of all countries in the Organization for Economic Co-operation and Development) while in Sweden they are 43 percent. But tax dollars are not burned—they are used to provide collective goods that are beyond the reach of any individual and that benefit everyone. These collective goods give the middle class more choices, not fewer....
I am not burdened by Swedish taxes. In fact, paying more allows me to increase my quality of life in a big way. That's why I believe that if we all paid higher taxes with less pain in the collection, more of us would be granted the American version of freedom we have been promised.
If more Americans lived abroad—or broke their legs while on vacation in countries with socialized medicine—we would have a tax system (and an education system, health care system, and public transportation system) like the one the citizens of Sweden benefit from.
