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I feel like this would remove all incentive.

Well you could trust your 'feelings' or you can look at the evidence and determine whether or not Sweden is a prosperous society with a good standard of living, competitive businesses and motivated people.

I visited Sweden for a couple weeks during a school program in high school. My feelings were largely based on my experiences during that trip meeting tons of students and staying with a family there.

Honestly there were tons of drugs, little motivation, and a happy yet seemingly poor society. The mom I stayed with complained endlessly about how her lazy son was throwing his life away.

Maybe I just had a misleading experience. But I just can't say I saw it the same as you do.

Sweden is number 7 in nominal per capita GDP. A couple spots above the US. I would not consider that a "poor" country.

http://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(nom...

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