Sweden's Tax War

October 15, 2012



Sweden’s Prime Minister Fredrik Reinfeldt announced that the government intends to cut the corporate tax rate, which he called “probably the most damaging tax of all,” down to 22%. That’s welfare-state, high-tax, big-spending Sweden cutting its corporate tax rate to 13 percentage points lower than the U.S. rate of 35%.

I find no reference to [Sweden’s] corporate tax cut being “revenue neutral.” What they sensibly plan to do is actually lower the real tax burden on business, not just shuffle the pieces around. If we are serious about making structural changes in the U.S. that will restore our economic growth and global competitiveness, we have to force our way out of the “revenue neutral” box and talk about real reductions in the tax burden on business.

What government should be asking is: Would we rather have 22% of a thriving, growing business sector, or 35% of a moribund, struggling business sector? The Swedes know the right answer.

—Tom Giovanetti, president, Institute for Policy Innovation

Source: Forbes