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Comment by kartan | Hacker News Reader

> Fresh ideas tend to pay off big in Sweden, even as the current government is less business-friendly and has imposed labor taxes that could crimp business investment

Maybe it is that high taxes and citizen friendly social system the responsible for the success of the country. I moved to Sweden to work in the tech sector because I like how socially advanced is the country.

Taxes are used to invest in society, and that's how you get a competitive environment. If you don't invest in your citizens how do you expect to grow? I really proud of paying taxes in Sweden and help society with my fair share of the cost. :)

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I think Americans tend to over-estimate the tax rate in Europe.

California's top marginal rate (including state and payroll taxes) comes out to about 47%. It looks like Sweden tops out at 56%. But for that extra 9%, you get lots of services (health care, education, etc). I'd guess most Americans would take the tax hike to not worry about insurance, school loans, etc.

Better comparison is tax burden/spending as % of GDP:

                        Tax %   Gov. spending %
    United States       25.1    41.6
    Sweden              44.5    51.2

https://en.wikipedia.org/wiki/Government_spending

Marginal tax rates mean nothing unless you know what the actual income brackets are.

The US's hughest tax brackets kick in at almost $400K. If Sweden's kicks in at $100K, the tax burden is MuCH higher.

Looks like top tax bracket in Sweden is $90k -- at $90k, CA marginal is 42%. So a delta of 14% -- still probably worth it, especially at lower incomes where student loans and health care a higher percentage of earnings.

The question for me is if our government doesn't provide any of those services why aren't we paying half that number?

Well, you can look at the numbers here: http://www.cbpp.org/sites/default/files/styles/report_371px/...

    Medicare, Medicaid, etc: 25%
    Social Security: 24%
    Military: 16%
    Safety Net Programs: 10%
    Federal / Veteran Benefits: 8%

Looks like some people get services, just not everyone.

At the state level, California: http://www.usgovernmentspending.com/California_state_spendin...

    Health Care 35%
    Pensions 18%
    Education 16%
    Welfare 9%
    Protection (?) 7%

The US does not seem to get a great return on healthcare spending.

Also, US military spending is truly enormous. There is a big return on that (obviously opinions differ as to whether it's worthwhile...)

(Edit for fact-checking: hmm, while the USA's military budget is by far the largest in the world, as a fraction of GDP it's not that extreme. Wikipedia says it's 3.3% of GDP, high compared to the world average of 2.3%, but way behind the likes of Israel, Russia and Saudi Arabia.)

So then the question is are our elected officials corrupt or incompetent?

The biggest problem is that the electorate doesn't trust the elected officials in this matter. To bring down healthcare costs you need to be able to reject treatments that are much more expensive but only provide slight benefits. Organizations like the NHS in Britain are very good at this. But whenever someone gestures in that direction in the US you have people up in arms about "death panels" and the idea is quickly dropped.

I don't know though. Maybe if politicians just came out and said "This proposal will produce 10 extra deaths per year but we'll be saving $50bn so we think it's worth it" then people would be willing to embrace that.

I don't even think you are talking about more net deaths. Every percentage point you raise taxes or healthcare costs pushes a group of people underwater. A certain percent of people who have bankruptcies will commit suicide/beat their wife to death/yell at their children until they develop mental issues etc. Economic policies have consciences that are diffcult to measure.

Because you have the vital job as an American taxpayer of subsidizing oil companies, drug companies, military contractors, investment banks, and land speculators.

There is so much more to taxes too then just income tax.

Sales tax, vehicle tax, fuel tax, etc.

Most if not all of these are unavoidable. Sales tax alone adds nearly 10% anywhere you shop.

I'm actually agreeing with you here: in some ways we have the wool pulled over eyes. We pay a ton in taxes and receive little social benefits because most people just don't know to demand them.

I'm guessing you hit the top tax faster in Sweden, the people I know with an degree will get above 50% fast, just anecdotal evidence though.

Assuming that they're implicitly comparing Sweden to the US, I would like clarification on how Sweden is less business-friendly. From my quick search, it seems like their corporate tax is around 17% lower than that of the US. Perhaps they have other taxes that make up for the difference?

http://www.doingbusiness.org/rankings

Virtually a tie. 82.45 vs 82.13 using the distance to Frontier measure.

I think it's very much a cultural thing.

Much of the social system in the US is informal. For example in the American South, things like the Salvation Army are huge and lots of small churches have homeless programs, food drives, and facilities that push for employment skills. Of course that ties a lot of dogma into social help, but it's there.

Sweden, having a much smaller government with fewer conflicting factions is able to have more efficient government. The average American who supports these other social systems doesn't trust that the government can do an effective job of providing them (and maybe for good reason).

I very much agree with you, but that informal/formal distinction is important.

These informal systems are nice and all, but one problem in charity in general is the judgment involved. A welfare state has the ability to provide for the unpleasant people as well, whereas charity often requires you to match the expectations as a person in need.

Think about people with substance abuse or other psychological problems - these kind of people might have hard time getting help from a charity. It doesn't feel charitable to help drunken, angry or otherwise distasteful people, yet they deserve help.

> Sweden, having a much smaller government with fewer conflicting factions

Lol. In contrast to the US, Sweden has a somewhat functioning democracy with more than 2 mainstream parties.

But I think Sweden, and the rest of Scandinavia (I'm Norwegian) has a less adversarial political system. We're used to coalitions, so most political parties are careful not to burn bridges totally. We also often have broad negotiated compromises where the US is more likely to have bitterly fought battles leading to a small majority where the losers ends up trying hard to reverse the decision afterwards (witness the Affordable Care Act debacle).

E.g. when the immigration crisis hit all the parties in parliament in Norway other than the Progress Party (furthest right wing populists in parliament) negotiated a joint agreement, rather than wrangling until someone managed to get just a 5x% majority for their plan.

As a result a lot of decisions end up being a lot less controversial than one might think, and remain more stable, as few substantial decisions rest on a minor parliamentary majority.

Insightful. I also think the 2-party system in the us tends to polarize all discussion. Everything has to fit on the same left/right scale, and there is no middle ground.

It hasn't always been the case, though. During a period from roughly 1930 to late 1970s, political polarization in this country was rather modest. (http://www.voteview.com/pdf/The_Polarization_of_Modern_US_Po...) Only recently has political polarization approached the levels last seen in the late 19th century.

And even with current heavy polarization, it's not completely binary. I can easily see, say, four party possibilities out of our current two.

> It hasn't always been the case, though. During a period from roughly 1930 to late 1970s, political polarization in this country was rather modest.

That's because the country was undergoing a partisan realignment (well, at least two that overlapped, one economic tied to the new deal coalition and one racial and tied to civil rights), where the emerging new axes of political differentiation did not align well with the divide between the major parties (but where the two were progressively moving into alignment.)

I think the same contrast applies between most northern European countries on one side and Us plus UK on the other as far as adversarial politics is concerned.

But I think it is not just politics, everyday life is less adversarial too here in Norway. I've been living here for over thirty years now and all the interactions that I have with the state are less complicated than they were when I was the UK (where I come from). I generally feel that people in the civil service, health system, etc. are genuinely trying to be helpful and not obstructive. Systems seem to be designed to work for the individual and not just for the treasury. For instance when you pay for medicine or treatment there is a cap and when that is exceeded you are refunded automatically in your next year's tax settlement.

Of course it's not perfect but it seems that there is a stronger sense of solidarity here than in the English speaking countries.

I think by social system he includes the health services.

A similar notion about Norway singled out the public health services as an enabler for someone to come up with an idea and start their own business without worrying about things like health insurance.

Thus the business could grow more organically than the pump and dump VC circus seen in USA.

Health services in Sweden is going down hill fast, I've heard. Money issues. They are trying to save money wherever they can. The recent sudden influx of foreigners didn't help. They say Sweden couldn't really afford taking in any foreigners but did it anyway. Sweden shooting itself in the foot. It sounds like.

Perhaps someone can give a recent update on this?

I suspect that is scaremongering from the suits that wants to let in American style for profit medical services.

Same shits been going on in Norway for decades.

And the UK

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