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The Social Democrats criticized the government’s tax cut of SEK 13 billion in 2023. But when the party now presents its shadow budget for next year, the tax cut remains.
Within the party there are high expectations for a more aggressive tax policy, but the party leadership is low.
– We will return to that question, says S-toppen Mikael Damberg.
When Finance Minister Elisabeth Svantesson (M) presented her first budget last year, an increase in the limit for state tax was included.
The increase, which meant that fewer people would pay state tax, cost the state treasury 13 billion kroner and was heavily criticized by the opposition – led by the Social Democrats.
S talked about welfare fraud and wrong priorities that give high earners more in the wallet.
– You lower the tax in the budget by SEK 10,000 for high income earners at the turn of the year. People like Oscar Sjöstedt and I would get a tax cut, who don’t struggle with the bills while it’s 14 öre at the pump for petrol for ordinary people. How did the Sweden Democrats reason when you made that priority? asked Mikael Damberg, the Sweden Democrats’ economic policy spokesperson, in a debate in the Riksdag in November 2022.
Not even a year later, the notes are on a different scale.
“We always start from reality”
S points out in its shadow budget for 2024 again that the tax cut was made by the M government. But now S does not want to withdraw the reduction for those who earn more than SEK 50,000 a month.
– We always start from reality. We have another government that has made other priorities. Every year we will show what our priority is given that occasion, says Mikael Damberg.
– This time we are showing that it is possible to collect ten billion kroner from an extra bank tax to support households in a difficult time. That’s how we will work every budget, but we cannot in opposition hope and believe that all previous social democratic budgets have passed, that’s not how politics works.
There is nothing to prevent you from withdrawing the tax cut, which you were so strongly critical of?
– In our budget, we propose both a bank tax and we also propose that the employment tax deduction should be adjusted to SEK 100,000. Today, you get employment tax deductions of up to SEK 140,000 a month. We think that is unreasonable. So we show that it is possible to conduct a good distribution policy also in the area of taxation in our budget.
It is unclear which taxes the party wants to raise
In its shadow budget, S has an investment of ten billion kroner for welfare in addition to the government’s 16 billion kroner. This means that regions and municipalities receive a total of SEK 26 billion in S’s budget proposal.
In addition to the temporary bank tax of ten billion kroner, a redistribution of the employment tax deduction provides four billion kroner to the financing of S’s proposed budget reforms.
In addition, S says no to the tax reduction on petrol and diesel, which gives SEK 5.7 billion to spend on other things – for example, extra child allowance and a fuel discount; a kind of support to compensate for high fuel prices.
In the S-budget, there is also a provision about a so-called contingency tax that will go towards the financing of investment in defence. But what this means is not specified and S does not expect any income for the tax in the next year.
“The tax must be paid by those who have the greatest carrying capacity”, it says in the budget, which also says that capital taxes “should be reviewed”. However, it doesn’t get more specific than that. The risk is that households back down if the party talks about tax increases.
Internal pressure from the left
Within S there is pressure from the left, mainly from the S association Reformists, to come forward with sharper proposals for increased taxes as well as the introduction of new taxes.
In a letter entitled “Reformists’ expectations of the Social Democrats’ shadow budget for 2024”, the association demands, among other things, increased tax on investment savings accounts, ISK, housing sales and unlisted shares.
The reformists want the tax increases to finance greater investments in welfare and the climate.
But expectations are thus not fulfilled by Mikael Damberg.
– We think that the capital taxes in general in Sweden are a bit low and that there is therefore an opportunity to carry out a tax review that brings in more money for capital and allows ordinary people to get more money in their wallets or a stronger welfare. We will return to that question.
Right now you are not going to announce any taxes to be raised?
– No.