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When the government presents its fall budget on September 21, it will include a substantial tax cut for most Swedes. In budget negotiations, the Center Party and the Liberals have pushed for the income tax to be reduced by 13.5 billion Swedish crowns next year.
– In times of economic crisis, many people have small financial margins. So it is important to ensure that they have greater financial security. More money in your wallet to spend to jump-start the Swedish economy, says leader C Annie Lööf.
The tax cut is divided into two stages. The first step of SEK 8.5 billion means that everyone earning an income will receive SEK 1,500 in lower taxes next year. This also applies to income from various social security policies, such as pensions and parental benefits.
Besides that it takes place a reduction in earned income tax of SEK 5 billion. That proposal is not finished in detail yet, but the idea is that it will be applied primarily to low income and then phased out for higher income.
– That means a couple hundred dollars more a month for the one with the lowest income, says leader L Nyamko Sabuni.
She justifies that part of the tax cut by saying that many in the wake of the crown crisis have increased costs, such as transportation or homework.
– You may have had to buy a bicycle or build a workplace at home, says Nyamko Sabuni.
Both the Center Party and the Liberal Party leaders emphasize that both tax cuts give more to low- and middle-income people.
– This will be a clear carrot to move from subsidies to work, says Annie Lööf.
When all the reform is implemented, the permanent tax cut will amount to SEK 17 billion in 2023. The two parties will then be merged so that everyone earning income will receive an overall tax cut corresponding to SEK 3,000 per year.
The tax cut will be funded in part through a so-called green tax swap. The government and cooperating parties C and L agree that the increase in climate taxes will be offset by reduced taxes on employment and entrepreneurship.
– When we raise the tax on plastic bags, it is something that everyone pays and then everyone must also return, says the Minister of Finance Magdalena Andersson (S).
She emphasizes that it is good that there is a profile of low and middle income people in the tax cuts. There is already a proposal to also reduce the state income tax for those with slightly higher incomes, but according to the Minister of Finance, this will not happen in this year’s fall budget.
– A tax cut with a good distribution profile feels more pleasant, says Magdalena Andersson.
