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I am not really comparing tax system, or at least that isn't the intention. The Swedish tax system is easy as long as you stick to those accounted for benefits.
by poiop 3y ago
I am not really comparing tax system, or at least that isn't the intention. The Swedish tax system is easy as long as you stick to those accounted for benefits.
Say if you make a $100k a year and you pay social security for public pension among other things but public pension only gives you credit up to $50k a year. Now if you have a big house you can deduct renovations so your income is for tax purposes is, say, $75k.
If you don't have a big house and your income is a $100k you still get the same public pension but are taxed on the full amount. Now if you started a company and hired yourself through that you could lower your personal income and instead take out dividend so you are also taxed on $75k. But to do that you now have to file much more complicated taxes, with actual accounts and often accountants.
In reality it is even worse because many do the first thing but then also have a company. So they pay themselves $50k a year and then use deductions on that to lower the effective amount even more. So I am out here paying on a $100k so they can have a nice life. (The numbers are made up, salaries and individual benefits are usually less than that and the example might not be entirely accurate but the overall point stands).
None of this really relates to the US tax system, but it is a similar problem in that if I want the best financial situation (by a decent margin) I need to file complicated taxes and a lot of people do exactly that mainly for tax purposes. Swedish sentiments just haven't caught up yet.
- Shaanie 3y agoTax deduction for renovations is $5k per year ($7.5k next year). Or well, less now that 1 USD is 11 SEK instead of 10. You make it sound like you can just start a company and hire yourself, and the biggest drawback would be more complicated taxes... No, the biggest drawback is that you're starting a business and taking a (much) larger risk than being employed. Hiring an accountant to help with the bookkeeping is a minor thing in comparison.
- poiop 3y ago[flagged]