On the right track even if reduced taxes are delayed


Other reductions are delayed – Finance Minister Elisabeth Svantesson (M) said during the budget presentation that tax changes will be forwarded so that they can be decided in connection with the budget this autumn. Elisabeth Svantesson also mentioned that the Tidö parties have agreed on a reduced tax on work, “but when it happens we will come back to it”. That proposals are sent out for consultation does not mean that they will be implemented. On the contrary, Monday’s twists of words indicate that the government will remain cautious with tax cuts. In a debate article in Dagens Nyheter, Elisabeth Svantesson wrote together with representatives of SD, KD and L that there should be continued restraint. The government’s interpretation is obviously that any tax relief risks diluting inflation. And then it apparently doesn’t matter that the Norwegian Economic Institute has found that reductions in certain taxes, such as employer contributions, can on the contrary dampen inflation. Nor can the threat of inflation constitute an obstacle to structural reforms in terms of laws and regulations. In addition to the urgent task of pushing back the development of crime, there is a long list of changes to be made. This applies to research policy, energy policy, skills supply, labor immigration. Some investigations have been added, but much remains to be done. For example, the subsidy ceiling is a central issue in the Tidö agreement. This is likely to be a very complex reform, and so it is unfortunate that no investigative directives have yet been presented. There is a great risk that this term’s clearest line of action will not come into force before the next election. In the worst case, the sum of the government’s policy will be that the reforms that have a direct impact on the budget are not carried out with reference to inflation and that the reforms that are of a more structural nature are not carried out with. But you have to see things as they are. Admittedly, Ulf Kristersson’s government took office with a majority mandate. The possibilities of getting the desired policy through are therefore good, much like during the Reinfeldt government’s first term. The difference is still big. In part, the alliance parties had had the opportunity to prepare for several years, and several proposals were already worked out when the government took office in 2006. At that time, there were a number of measures to be taken regarding the line of work after a long period of rampant sick leave and early retirements. Reductions in the income tax were possible and the wealth tax was there, and could be abolished. There were several low-hanging fruits, and besides, there was no financial crisis. This time there has been no jump start. The government has been forced to concentrate on difficult crisis situations. Partly, of course, the inflation problem, partly the more specific problem with energy prices and the chaos with compensation to households and companies. But the new government has nevertheless contributed to more predictable conditions for companies. You have to remember how the situation has been during the last two terms of office – then there was a constant threat from the S-led government to raise taxes and introduce completely new ones. The Minister of Finance and later the Prime Minister Magdalena Andersson often returned to claims that capital income is undertaxed and to hints that entrepreneurs are mostly tax planners. The only hope during these years was that the S leadership somewhere actually understood the harmfulness of these tax ideas, and that the threats were mostly intended for debate use. However, Magdalena Andersson added several investigations to tighten the taxes. Elisabeth Svantesson has clearly marked that there will be no deterioration for the entrepreneurs. She has closed the investigation into a new exit tax (which, for example, would make generational changes in family businesses more difficult if one of the children happens to be living abroad). She has instructed the ongoing investigation into the 3:12 rules that the tax for small business owners may not be increased and that the investigation should work to promote entrepreneurship. In the original directives, more was said about justice and the need to prevent tax planning. It is enough that Sweden’s entrepreneurs are forced to worry about how the inflation crisis will strike. They should also not have to prepare for increased taxes. The fact that Sweden now has an entrepreneur-friendly government should not be underestimated, even if tax cuts are delayed.

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