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Swedish Labor Income Taxation (1862–2013)

  • Du Rietz, Gunnar

    ()

    (Research Institute of Industrial Economics (IFN))

  • Johansson, Dan

    ()

    (Örebro University School of Business)

  • Stenkula, Mikael

    ()

    (Research Institute of Industrial Economics (IFN))

This paper presents annual Swedish time series data on the top marginal tax wedge and marginal tax wedges on labor income for a low-, average- and high-income earners for the period 1862 to 2013. The tax wedges were initially low and the tax system proportional. The tax wedges began to increase during World War I. The increase accelerated during World War II and through the post-war period. In the 1970s, the top marginal tax wedge was occasionally as high as 90 percent. The main explanations for this development were temporary crises that led to permanent tax increases, the expansion of the public sector and distributional ambitions, bracket creep and the introduction of employer-paid social security contributions. The 1990–1991 tax reform represents the beginning of a new and continuing period of decreasing marginal tax wedges.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 977.

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Length: 45 pages
Date of creation: 19 Sep 2013
Date of revision: 20 Nov 2014
Publication status: Forthcoming in Swedish Taxation: Developments Since 1862, Henrekson, Magnus, Stenkula, Mikael (eds.), Palgrave Macmillan.
Handle: RePEc:hhs:iuiwop:0977
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/Email:


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  1. Barro, Robert J. & Sahasakul, Chaipat, 1986. "Average Marginal Tax Rates from Social Security and the Individual Income Tax," Scholarly Articles 3451298, Harvard University Department of Economics.
  2. Toke Aidt & Peter Jensen, 2009. "Tax structure, size of government, and the extension of the voting franchise in Western Europe, 1860–1938," International Tax and Public Finance, Springer, vol. 16(3), pages 362-394, June.
  3. Birkinshaw, Julian & Braunerhjelm, Pontus & Holm, Ulf & Terjesen, Siri, 2006. "Why Do Some Multinational Corporations Relocate Their Headquarters Overseas?," Working Paper Series in Economics and Institutions of Innovation 54, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  4. Roine, Jesper & Waldenström, Daniel, 2006. "The Evolution of Top Incomes in an Egalitarian Society: Sweden, 1903–2004," SSE/EFI Working Paper Series in Economics and Finance 625, Stockholm School of Economics.
  5. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
  6. Jaimovich, Nir & Rebelo, Sérgio, 2012. "Non-linear Effects of Taxation on Growth," CEPR Discussion Papers 9261, C.E.P.R. Discussion Papers.
  7. Assar Lindbeck, 1997. "The Swedish Experiment," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1273-1319, September.
  8. Roine, Jesper & Vlachos, Jonas & Waldenström, Daniel, 2009. "The long-run determinants of inequality: What can we learn from top income data?," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 974-988, August.
  9. Stenkula, Mikael, 2013. "Taxation of Goods and Services in Sweden (1862 - 2010)," Working Paper Series 956, Research Institute of Industrial Economics, revised 21 Oct 2014.
  10. Alan T. Peacock & Jack Wiseman, 1961. "The Growth of Public Expenditure in the United Kingdom," NBER Books, National Bureau of Economic Research, Inc, number peac61-1, November.
  11. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Economics Department Working Papers 486, OECD Publishing.
  12. Du Rietz, Gunnar & Henrekson, Magnus, 2014. "Swedish Wealth Taxation (1911–2007)," Working Paper Series 1000, Research Institute of Industrial Economics, revised 21 Mar 2014.
  13. Johansson, Dan, 2004. "Skatternas utveckling, omfattning och fördelning," Ratio Working Papers 42, The Ratio Institute.
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