Sweden's Opposition Unveils Shadow Budget

by Ulrika Lomas, Tax-News.com, Brussels

04 May 2010

With less than five months to go before the September elections, Sweden’s left-wing opposition parties have unveiled key details of their joint shadow budget, containing a raft of tax measures designed to redistribute wealth in Sweden and to create jobs.

Currently ahead in the latest opinion polls, Sweden’s opposition parties, comprising the Social Democrats, the Green Party and the Left Party, dubbed the red-green coalition, have pledged to both increase taxes as well as to increase spending in key areas such as pensions, public transport infrastructure, and low-income housing.

Under the proposals, individuals earning in excess of SEK40,000 (EUR4,174) per month would be liable to pay higher taxes, with tax breaks for those earning up to SEK80,000 being gradually phased out. A wealth tax would also be reintroduced, and property tax would be raised for homes valued at more than SEK4.5m.

Other tax initiatives outlined by the opposition parties include plans to reduce taxes for small businesses by cutting payroll taxes, to increase taxes currently levied on tobacco, alcohol and fuel, and to abolish the tax deduction accorded to household services, such as cleaning and babysitting, while retaining the tax deduction for home repairs and maintenance.

Sweden’s government claims, however, that the opposition’s plans would jeopardize not only jobs but also the recovery of the country's economy.

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