Swedish Wealth Taxation, 1911–2007
AbstractThis paper studies the evolution of modern Swedish wealth taxation since its introduction in 1911 until it was abolished in 2007. It offers a thorough description of the rules concerning valuation of assets, deductions/exemptions and tax schedules to characterize effective wealth tax schedules for the period 1911–2006. These rules and schedules are used to calculate marginal and average wealth tax rates for the whole period for a number of differently endowed owners of family firms and individual fortunes. The overall trend in the direct wealth tax was rising until 1971 for owners of large and middle-sized firms and for individuals of similar wealth consisting of non-corporate assets. Average direct wealth tax rates were low until 1934, except for 1913 when a temporary extra progressive defense tax was levied. There were three major tax hikes: in 1934, when the wealth tax was more than doubled, in 1948 when tax rates doubled again and in 1971 for owners of large firms and similarly sized non-corporate fortunes. Effective tax rates peaked in 1973 for owners of large firms and in 1983 for individuals with large non-corporate wealth. Reduction rules limited the wealth tax rates from 1934 for fortunes with high wealth/income ratios. The wealth tax on unlisted net business equity was abolished in 1991. Tax rates for wealthy individuals were decreased in 1991 and in 1992 and then remained at 0.51 percent until 2006, depending on whether the reduction rule was applicable. Tax rates for small-firm owners and small individual fortunes were substantially lower, but the tax difference was much smaller when owners of large fortunes could benefit from the reduction rules. The effective wealth tax was much greater if firm owners had to finance wealth tax payments through additional dividend payouts. In such cases the effective total wealth taxes were affected by high marginal income tax rates and peaked at extremely high levels in the 1970s and 1980s. Towards the end of the wealth tax regime, aggregate wealth tax revenues were relatively small: it never exceeded 0.4 percent of GDP in the postwar period and amounted to 0.16 percent of GDP in 2006.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 1000.
Length: 51 pages
Date of creation: 02 Jan 2014
Date of revision: 21 Mar 2014
Publication status: Forthcoming in Swedish Taxation: Developments Since 1862, Henrekson, Magnus, Stenkula, Mikael (eds.), 2015, Palgrave Macmillan.
Contact details of provider:
Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Wealth tax; Tax avoidance; Entrepreneurship;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
This paper has been announced in the following NEP Reports:
- NEP-ACC-2014-01-10 (Accounting & Auditing)
- NEP-ALL-2014-01-10 (All new papers)
- NEP-HIS-2014-01-10 (Business, Economic & Financial History)
- NEP-LAW-2014-01-10 (Law & Economics)
- NEP-PBE-2014-01-10 (Public Economics)
- NEP-PUB-2014-01-10 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Du Rietz, Gunnar & Johansson, Dan & Stenkula, Mikael, 2013. "The Evolution of Swedish Labor Income Taxation in a 150-year Perspective: An In-depth Characterization," Working Paper Series 977, Research Institute of Industrial Economics.
- Ohlsson, Henry, 2007.
"The legacy of the Swedish gift and inheritance tax, 1884–2004,"
Working Paper Series
2007:23, Uppsala University, Department of Economics.
- Ohlsson, Henry, 2011. "The legacy of the Swedish gift and inheritance tax, 1884–2004," European Review of Economic History, Cambridge University Press, vol. 15(03), pages 539-569, December.
- Ohlsson, Henry, 2009. "The legacy of the Swedish gift and inheritance tax, 1884-2004," Working Paper Series, Center for Fiscal Studies 2009:13, Uppsala University, Department of Economics.
- Ohlsson, Henry & Roine, Jesper & Waldenström, Daniel, 2014.
"Inherited wealth over the path of development: Sweden, 1810–2010,"
Working Paper Series, Center for Labor Studies
2014:7, Uppsala University, Department of Economics.
- Ohlsson, Henry & Roine, Jesper & Waldenström, Daniel, 2014. "Inherited wealth over the path of development: Sweden, 1810–2010," Working Paper Series, Center for Fiscal Studies 2014:7, Uppsala University, Department of Economics.
- Ohlsson, Henry & Roine, Jesper & Waldenström, Daniel, 2014. "Inherited Wealth over the Path of Development: Sweden, 1810–2010," Working Paper Series 1033, Research Institute of Industrial Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elisabeth Gustafsson).
If references are entirely missing, you can add them using this form.