Swedish Economic Policy Group wants simpler tax system

Swedish Economic Policy Group wants simpler tax system and now joins the debate about the Swedish tax system. The Economic Policy Group (SNS Konjunkturråd) believes that it is position to implement measures to increase the intelligibility of the Swedish tax system, and have a proposal that “is fast and easy to implement.”

This writes three representatives of the Economic Policy Group in a debate article in the biggest Swedish newspaper (Dagens Nyheter) on Thursday the 17 January of 2012.

The authors plan includes a simpler design of earned income tax deductions, that the invisible taxes, like the tax portion of the payroll tax, will be visible for the individual, that citizens’ knowledge of tax and benefit system is improved and that the government takes the initiative for a broad overhaul of the tax reform – with a simpler system of more consist and broadened tax base.

In Economic Policy Group proposal the income tax is lowered to a level close to the already lowered Swedish corporate tax rate. While there is implementation of targeted initiatives for low-income earners and increased property tax.

A reduction of income tax is financed by for example a consistent level of payroll taxes, termination of deductions for private retirement savings and for the incomes acquiring. The tax on capital income is reduced while deductions for borrowing costs are dropped.

The Economic Policy Group believes that a reform in line with their sketch would simplify the tax system while making it more efficient. With the exception of households with high loan, almost all income earners would have a higher disposable income due to the reform. Termination of the interest deduction would also contribute to greater financial stability in the society through lower borrowing leverages.