Magnus Henrekson, the head of Sweden’s Research Institute of Industrial Economics, points to the country’s lack of any form of wealth tax as a key motivation for entrepreneurs to make and keep their money.
Sure, without a wealth tax there’s more incentive to become wealthy. But there are many places without a wealth tax and not all of them have a start up scene like Sweden.
CGT at 30% when income tax can top 60% (including social charges) might be an incentive. No inheritance tax so dynastic fortunes can be created might help. Being a more free market economy than the UK or US could be a boost too. But the absence of a wealth tax? Naah, that’s too common a feature.
More relevant in Sweden because they used to have a wealth tax. I think the economy there grew significantly after it was abolished. So a necessary but not sufficient basis for entrepreneurs?
As an economist Tim–what do you think of abolishing VAT and Corp Tax as a way of helping UK recover from Johnson’s ruinous virus-freak out?
I’m not an economist. I don’t do the Snippa thing of claiming I am. I’m someone who writes about economics, something different.
Not convinced that either would help all that much to be honest. We’re not facing a deficiency of demand so losing VAT won;t help all that much. Corp tax, well, we all know it wouldn’t last long, the abolition – I think we should get rid of it permanently, yes, but you’re asking specifically about the recovery – so it wouldn’t change behaviour much. Immediate and 100% expensing would boost investment which would be nice and that would be a better idea I think.
VAT gone makes goods cheaper and should give the scum of the EU vast pain. And zero corp tax could bring a lot of companies in was my thought. An economy with a lot less regs would also help. Abolishing all tax on investment also-but savings are down because of near zero int rates.
And halting the funny money printing and waste on crap like HSR2 etc also a good idea.
And a general RED/GREEN Purge would be an excellent morale booster for the struggle ahead.
I used to do a lot of business with Swedish firms in the 1990s. They were all utterly unscrupulous and prepared to stiff their partners at the first opportunity.
I would like to hear from anyone who has had experience latterly if this is still the case.
I’ve both lived and worked there a few years back and my experience was that they weren’t so much unscrupulous as “not prepared to put up with bullshit”. A lot of the soft soap subjective stuff was dismissed out of hand (quite rightly) and it was all about quantitative measures and delivery. If you didn’t come up to scratch you were shown the door.
I had no problem with that, but it drove the sales guys mental as they couldn’t figure out how to “close the deal on a relationship basis” (i.e. soft soap the Swedes into signing).
Obvs the best policy for economic prosperity is to shoot the socialists – Labour socialists, Conservative socialists, Scotnaz socialists, Plaid Cymru socialists, IRA socialists, … We can burn the bodies for Green Power. Win, win.
Sure, but then you end up with a modern reenactment of the French Revolutionary Terror where those in power execute those they’ve just ousted from power and you end up executing people for very marginal differences of opinion.
At least the Ecksian solution is based upon the rule of law (and traditional punishment) where we hang the traitors of the elite and their common purpose Nomenklatura for the actual and verifiable acts of treason that they have committed.
Sweden is among the countries mentioned in this article, and all are richer than the UK
http://faculty.webster.edu/woolflm/forcedsterilization.html
And then I noticed Peru as having had a sterilisation programme, so that theory’s buggered.
I love the Milton Friedman response to a question about Sweden being a rich country. Swedes in Minnesota are rich too, he said or something like that.
Sweden is a rich country because [a] they have a lot of natural resources per head – Sweden is to iron ore as KSA is to oil – [b] they made a lot of money selling munitions to both sides during WW2 – “Hitler’s unbombable ball-bearing factory” – and [c] being neutral is a cheap option.