Sweden, Yes, Sweden, to Cut Corporate Taxes

By September 9, 2008General, Taxation

To be fair, Sweden isn’t quite the cliched Socialist Paradise/Pandaemonium that used to be held up to the United States as the ultimate comparison for where big government takes you, but still…

From Agence France Presse:

Sept. 8, 2008 — Sweden on Sept. 8 announced plans to cut the corporate tax rate from 28% to 26.3% in 2009 in a bid to improve the business climate. The move is part of a 16-billion-kronor (US$2.4 billion) package the government will formally present in its budget bill to parliament later this month.

Reducing the corporate tax rate will cost around 7.0 billion kronor.

The government said it would also reduce social contribution fees paid by employers by around one percentage point, a move that will cost another 7.5 billion kronor.

“The tax proposals strengthen the incentive for investment and new hires, while simplified regulations reduce companies’ administrative burdens,” the government said.

A good test for candidates’ tax plans. Do their tax proposals “strengthen the incentive for investment and new hires,” and do their “simplified regulations reduce companies’ administrative burdens?”

And let’s check with the Tax Foundation again, see what’s new.

Washington, DC, August 29, 2008 – A recent study shows that while America has left the major features of its business tax system unchanged over the past fifteen years, virtually all developed nations have lowered their corporate tax rates, potentially hurting the competitiveness of the United States.

In Tax Foundation Fiscal Fact No. 143, “Comparing International Corporate Tax Rates: U.S. Corporate Tax Rate Increasingly Out of Line by Various Measures,” Tax Foundation Vice President for Economic Policy Robert Carroll, Ph.D., uses various methods to compare U.S. corporate tax rates with member nations of the Organization of Economic Cooperation and Development (OECD) and the G-7 countries.

“The U.S.’s combined federal-state statutory corporate tax rate (39.3%) is now well above the weighted average for both the member nations of the OECD (31.9%) and the larger G-7 countries (33.8%),” says Carroll. “Moreover, both groups of countries continue to lower their tax rates. Since the early 1980s, the weighted average corporate tax rate has fallen by 38 percent for OECD nations and 37 percent for the G-7 countries, not counting the U.S.”


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