By Paul Roderick Gregory – In 1970, Swedish high earners paid marginal tax rates of 70 percent, rising to 85 percent by 1980. Marginal tax rates on dividends and capital gains were only slightly lower, if at all. Sweden’s entitlement state featured universal benefits replacing 90 percent or more of lost income, a state monopoly of social services, and a union-inspired ‘solidarity wage” that featured (as the Swede’s scornfully put it) “equal pay for all work.” Sweden’s distribution of income was as equal as the communist countries of Eastern Europe. Government spending rose to 60-70 percent of GDP versus the 45 to 50 percent in the rest of Europe at the time. Fifty percent more Swedes were “tax financed” than worked in the private sector.
Sweden then reversed course when confronted with the disastrous consequences of its policies. The Swedish story ends on an up-beat note. Sweden and Germany are today the two best performing European states, both governed by center-right parties. more> http://tinyurl.com/bsv4xnl
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