The National Audit Office's report on changed income tax rules 2011-2023

Sofie Eriksson (S)

Mr. Speaker! I became politically engaged to be part of the fight against injustices. The longer I have been active in politics, the clearer it has become that it is fundamentally about how we distribute burdens, prosperity, and security.

When my mother came home from work with a stomach bug, I, who grew up in a safe country where one does not need to flee from war or oppression, thought that it—getting a stomach bug at work—was the absolute worst thing I could imagine. Mom said: "Yes, it's not fun. But it passes quite quickly. The worst thing is that I lose money." That was when I learned the word that even today is my ugliest word: karensdagen.

I have spoken about my mother Monica before in this speaker's chair. That is because she and the others in my family in different ways symbolize the foundation for my political commitment. Through my mother, I got to know Swedish elderly care at close range as a child. I saw how the pressure and the burden of care increased. It is about politics, about the distribution of burdens, prosperity, and security.

My father Hans-Erik did not have to become poor when he lost his job in the middle of life, with three children and a terraced house. He could get an education, change careers, and become a driving instructor instead. I noticed that he enjoyed his new job very much. Thanks to a policy for lifelong learning, a policy that created security in transition, it turned out well for our family and my father.

My brother Henrik, whom we are very proud of, educated himself to become a doctor. Almost no one in our family had gone to university before him.

My sister Anna-Carin, the sun in my life, can all phone numbers by heart. She remembers all the people she has ever met. She remembers everyone's name day. Through daily activities, she has contributed by cleaning, doing the dishes, serving coffee, and socializing with people who have not always had anyone else to talk to.

Mr. Speaker! Today we are going to debate the National Audit Office's report on changed tax rules. What does that have to do with my family? Well, it is through our tax system that we finance what I have spoken about: the health insurance, the elderly care, the education system, the security systems, the healthcare, and the labor market policy.

The discussion about taxes easily becomes technical, black or red figures on a piece of paper. But fundamentally, as has been said, it is about how we choose to distribute burdens, prosperity, and security in our country. For me, it has always been clear that if we share this in solidarity, society becomes much more pleasant for everyone.

Unfortunately, the gaps have grown for a long time and solidarity has been eroded. It has become a bit more of "look after yourself and ignore others," as long as one can grab for oneself and protect one's own children from others' children. The problem is only that this backfires. If not everyone is free and safe, no one is.

Mr. Speaker! We live in a historically uncertain time. The economic downturn and the cost crisis are hitting households, welfare, and employment with full force. We have a healthcare crisis running through the country. Housing construction is grinding to a halt. Unemployment is predicted to increase and growth is negative.

Sweden and the Swedish people are becoming poorer. Under the Moderate-led alliance government, total taxes were lowered by over 140 billion kronor. This was largely carried out with borrowed money. This was deeply problematic because the deficits they left behind reduced the possibilities to finance the welfare and society's ability to deal with social problems.

During the same period, tax gaps were created based on source of income. This tax gap is deeply unfair: for those on early retirement, the sick, the disabled, the unemployed, and those on parental leave, the tax is still higher than for those in gainful employment.

Mr. Speaker! The Swedish National Audit Office has examined whether the government has provided a good picture of how the proposed changes to the job tax credit and related tax rules have affected such things as employment, hours worked, and fairly distributed prosperity. We Social Democrats agree with the conclusion that it is good that the consequence analyses are constantly being developed to become more elaborate and rigorous. But one must remember that the Swedish National Audit Office, in its audit, has not analyzed how the tax cuts have affected the financing of the welfare system or other public commitments.

The question of how the tax cuts have affected society is, therefore, much broader than the questions that the National Audit Office's report addresses. As the National Audit Office points out, the tax cuts have led to the fact that people with the absolute lowest incomes have not received a share of the reduced taxes to the same extent as people with higher incomes. The large tax cuts have also worsened the tax system's ability to finance common commitments such as welfare in Sweden, security, and the defense of our country.

It is very important that Sweden achieves a broad tax reform aimed at ensuring that the tax system generates stable tax revenues for the financing of our common commitments, is simple for individuals, and is based on the principle that tax shall be paid according to ability to pay.

Mr. Speaker! We demand nothing else today, but we have submitted a special statement pointing out that the Swedish National Audit Office's report does not address what the money could have been used for and how resource efficiency could have been increased. We can indeed observe that the self-financing rate with these tax cuts is low. It costs more than it is worth. We can also observe that it affects the economy to send out 100 billion kronor per year. The question is how this money is to be used.

Of course, we could have done very much with 100 billion kronor a year. It would have affected employment, income distribution and, above all, the possibility of financing our welfare.

Mr. Speaker! At its core, economic policy is about how we choose to distribute burdens, prosperity, and security in Sweden. We Social Democrats believe that we must be able to do this significantly more fairly than today.

It is completely unreasonable that Sweden today is regarded as a tax haven for the well-off while there is a healthcare crisis, families with children are being evicted from their homes, major deteriorations are to be implemented in the health insurance and the unemployment insurance, there is a total crash in housing construction, the water and sewage systems are underfunded and the railway is failing. It is unworthy of a wealthy country like Sweden that the burdens, the prosperity and the security are so unfairly distributed as they are today.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Ilona Szatmári Waldau (V)

Mr. Speaker! Sofie Eriksson speaks passionately for fair taxes. I agree. She criticizes the government. But I would still like to remind that the National Audit Office's review spans from 2011 to 2023 - five years with Moderate prime ministers and eight years with Social Democratic ones. A little self-criticism would therefore be in order.

In 2019, the then Social Democratic Minister for Finance, Magdalena Andersson, presented a proposal to abolish the wealth tax, something that the Social Democrats in the Riksdag voted for.

Without any basis other than guesses and assumptions, the memorandum concluded that the proposal is self-financing by 100 percent over time and is judged to have negligible effect on both the number of employed and the number of unemployed in the economy - exactly what the Swedish National Audit Office criticizes in its review. The Social Democratic-led Ministry of Finance stated that the proposal would benefit high-income earners and men, and no deeper analysis of this was ever conducted.

The abolition of the wealth tax meant large tax cuts for those who earned the most. The person who earned 25,000 in the month in 2020 received a tax cut of 21 kronor, while the person who earned 70,000 received a tax cut of almost 1,000 kronor per month. LO's economists calculated that the 50 top executives who are part of Sweden's economic elite received an average of 67,000 kronor per month in tax cuts during 2020 through the Social Democrats' policy. It thus became 21 kronor for the person who earns 25,000 and 67,000 kronor for the power elite.

This is the policy that the Social Democrats pursued during the last parliamentary term, when they were in the majority. How does this align with Sofie Eriksson's rhetoric? Is it the case that the Social Democrats say one thing in the majority and another in opposition?

The speech at riksdagen.se, in Swedish (opens in a new tab)

Sofie Eriksson (S)

Mr. Speaker! Thank you, Ilona Szatmári Waldau, for the questions! I welcome a discussion on these questions.

I believe it is quite certainly known to the member that the abolition of the defense tax was in no way, not for a single second, an issue that the Social Democrats pushed for in the negotiations to obtain government power. I believe she knows that it was not the Social Democrats who thought it was right to carry it out.

On the other hand, there is a party that was involved in negotiating the abolition of the wealth tax which is also now involved in pushing through broad tax cuts for the absolutely wealthiest, and that is the Liberals.

I believe it is known to the vast majority - we have raised this many times - that it was the Liberals who, in the negotiations on the January Agreement, demanded a large tax cut for the absolutely wealthiest. It was not the Social Democrats. We prioritized other issues - more money for welfare, for example.

But to form a majority in the Riksdag - which has been dominated by right-wing forces for very many years, which has made it difficult to pursue a progressive tax policy - one must sometimes compromise. Perhaps this is the difference between Social Democrats and Left Party members: We actually dare to do things that are also tough and that we do not always think are superb in order to achieve a stable majority and an opportunity to govern the country, in order to also be able to carry out important things such as sending more money to the welfare system.

I can clarify it once again if it has been unclear: The abolition of the wealth tax was not put forward in any way by the Social Democrats, but by the Liberals. The Liberals are still pushing from a government position for high-income earners to receive large tax cuts. It is not the Social Democrats' policy.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Ilona Szatmári Waldau (V)

Mr. Speaker! Thank you, Sofie Eriksson, for the answer! Regardless of what the member says here, it was a Social Democratic government that stood behind the proposal, and every Social Democrat in this chamber voted to abolish the wealth tax.

I also want to point out that in the memorandum it was concluded that the self-financing rate would be 100 percent. The 6.1 billion in tax revenues that disappeared would pay for itself over time, and it was noted that it would have a negligible effect on the number of employed and unemployed.

The Social Democrats in government were then among those who, without evidence, believed that lower taxes for high-income earners mean that they work more, despite LO in its referral response pointing out that only 3 percent of those who pay state income tax work part-time. Not a word was said either about how these missing billions could result in fewer employees in the welfare sector.

It would be interesting to hear Sofie Eriksson elaborate on the Social Democrats' defense of the abolition of the wealth tax in connection with the National Audit Office's criticism. I do not think it is enough to say that it was other parties that pushed it through. I want to hear how this is viewed in connection with the National Audit Office's criticism.

Then I want to point out that the Social Democrats have approved and maintained all the increases to the job tax deduction that the right has pushed through, with the same poor basis. Most recently, it was Magdalena Andersson's government in 2022. We know how much the job tax deductions cost - 128 million in lost tax revenue. And no research shows that they have any positive effects on employment.

I would like to ask the member how it is that the Social Democrats in government have retained the job tax credits that conservative governments have introduced and which, in their construction, favor high-income earners.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Sofie Eriksson (S)

Mr. Speaker! Ilona Szatmári Waldau does not need to convince me why it is wrong to make large tax cuts for high-income earners. I thought that would be clear after my speech.

I can state that it is exactly as is being presented here. We have now received in black and white in this report that the self-financing rate is low. The arguments for implementing this type of tax cuts, especially for high-income earners, are weak. I agree with that. But it is very clear that we have had a right-wing majority in the Riksdag that has complicated, yes, almost made impossible, the conduct of a progressive tax policy.

We want to carry out a broad tax reform, which would lead to those who have the most contributing more but perhaps also to those who have the least being able to get some relief. But we believe that it is important to carry out a broad and large tax reform because the deviations from the previous tax reform are so many. Therefore, we need to do this broadly. But we think that those who have absolutely the most very well should be able to contribute more.

Then there is this matter regarding various impact assessments. We mention it in our specific statement. I also mentioned it from the rostrum. We think it is important that they are constantly developed. I have actually touched upon that in my opening remarks.

But I want to reconnect once again to the fact that it was not the Social Democrats who had as their most important issue in the government negotiations that the tax should be lowered for the absolutely richest in our country. No, it was not the Social Democrats. It was the Liberals, who had the opportunity to push for a lot of different types of issues but who chose this one. That actually has to stand for them. It was they who prioritized this when they sat at the negotiating table. This cannot be placed on our table.

We prioritized other issues that were important for us, which we got through. This included, among other things, having robust funding for the welfare system. It is clear that we need a tax reform to achieve this in the long term. I thank you for the opportunity to say that.

(Applause)

(cont. § 15)

The speech at riksdagen.se, in Swedish (opens in a new tab)