After the reform, Sweden ranked 12th in GDP per capita among OECD countries
Between 1970 and 1980 the Sweden he undertook a policy of nationalizing the economy and increasing state benefits, raising the income tax to 42.7% of national income. As a result of this “socialization”, from 1970 to 1991 Sweden lagged behind its peers in Europe. From the fourth position among the countries of Organization for Economic Co-operation and Development (OECD)it moved to 16th place in 1995. The state grew, the number of civil servants increased by 70%, while that of the private sector decreased by 13%.
After a long period of no economic growth, the population protested and a countermovement led to a big one tax reform in 1990/1991, by reducing corporate income tax from 57% to 30%, with zero dividend tax and raising capital gains tax to 12.5%.
In 2004, the wealth tax was also abolished. In 2013, corporate income tax dropped further to 22% and property tax (our IPTU) was reduced. This period of reform, between 1991 and 2014, resulted in Sweden’s gross domestic product (GDP) overtaking Germany, France and Italy, reaching 12th in GDP per capita among OECD countries in 2016.
A country’s economic growth is not limited to the orientation between capitalism or socialism, but Sweden’s economic downturn actually occurred in the period that the country introduced socialist measures. When Sweden resorted to reducing the degree of intervention, there was a recovery of the economy and the attraction of investment.
This data was taken from the book The power of capitalism: a journey through recent history across five continentsby Rainer Zitelmann, and I refer to the chapter on the “myth of Swedish socialism” because Brazil is discussing its tax reform.
We have seen a lot of emphasis by our politicians on centralizing and managing taxes at the federal level, which will lead to a path of increasing the tax burden and politicizing resource management. It would be appropriate to simplify and reduce taxes, focusing on the reduction of public spending and greater autonomy for employers. Like Sweden, we can embark on a socialist era and then turn it around in 30 years. However, the intelligent is the one who learns from the mistakes of others.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
