Taxes Part II

[Late addition 3/15/11: Please view Liz's comment at the end of this post - it provides more good insight into the Swedish tax system and method of spending!]

I have two additions I'd like to make to my last post "Swedish Field Journal: 4th Edition."

First, there is a tax I hate. A tax that I am subject to that drives me absolutely nuts. It's colloquially called the "TV Tax" and it's administered by Radio Tjänst, which is the Swedish equivalent of public broadcasting. This tax is mandatory for everyone who has a TV receiver (your laptop counts) or radio. Even if you don't use it, even if you don't want TV, even if you don't pay any other taxes, you are required to pay about $25 per month(!!!).

It starts with a letter. You'll get one in the mail, saying you owe them a ton per year and you can set up a payment plan (oh yay). Eventually they'll come to your door and demand it. They will chase you down and make you pay. So you might as well.

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My second addition is an answer to my Uncle Dave's question. He wanted to know, and I paraphrase: "How can the average Swede afford an expensive car like a Volvo, which is supposedly the national car of choice? Do they use the good transportation system?"

Here's what I know: Swedes tend to have very nice cars. I don't see many old rusted broke down junkers. There are indeed many Volvos, and a lot of Audi's, Mercedes, Saab, etc. To be fair, I live in a fairly affluent University town, and I imagine bigger cities are a bit different. But average families do appear to be able to afford a car.

I think part of it is that carrying personal debt here isn't considered bad when you don't have your retirement to worry about. I also believe that your taxes get slightly lower with debt - correct me if I'm wrong on this people. I've heard that it's pretty easy to get credit, although when we tried to get a home loan here they said no (different situation when you're an immigrant). I think it's also important to remember that their costs are lower. They're not paying for health insurance, health care, or education costs. That frees up a lot of money from what I understand.

One last factor is that I think that most families just have one car. I've heard differently from different people, so I can't be authoritative on it, but if you just have one that helps. And the public transportation system is indeed awesome, so you don't necessarily need a car, which is how we've decided to live.

Anyone who has been here longer and has more info and insight, feel free to comment!

Swedish Field Journal: 4th Edition

Four months. It's easy for me to keep track of how long we've been here because people ask me about it so frequently. I'm acutely aware that the 8th of each month is a sort of anniversary, another point at which I can look back and assess my adjustment and how my feelings about living here have changed.

I often have to remind myself that I live here. I live in Sweden. And this isn't study abroad, this isn't an extended visit. I have to consider this my home for the time being. If I look ahead too far and imagine myself two years from now, still in Sweden, it's easily overwhelming. It's not that I don't like it here, but living away from home for so long can be daunting.

But I find myself adjusting more and more. My Swedish is improving quickly, and that makes it easy to communicate and figure stuff out. Since Dan and I have found an apartment, I'm looking forward to a place we can make a home. I have a routine, friends, even some work. Things are looking up.

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For this month's cultural notes, I want to talk a little bit about taxes: what you pay, what you get, and my assessment of it. Because I haven't been here that long, I don't know even close to everything and I will probably get some details wrong. But here's what I've gathered:

When you work a typical job here (not babysitting and not a post-doc), a large portion of your money is taken straight from your paycheck. It's different based on your income, but with a decent income they'll take 50% percent, a slightly lower one 40%. In other words, the government takes a ton of your money.

But what you get back is significant. Medical expenses are almost completely paid. Daycare and schooling is paid for from "dagis" for the youngest to college for the oldest. Masters and PhD's are paid for as well. There is no such thing as private schools or college that I've ever heard of, so it's not like you can opt to pay for more. Your retirement is guaranteed, without the fear of the government being unable to pay it back (Sweden has NO debt, NO deficit. They're secure.). If you become unemployed, you are well supported. If you want to start a business, you are well supported. Parents get monthly stipends for their children, as well as a wicked amount of parental leave: 480 paid days per child split between the parents as they wish. Interestingly, the leave can be taken until the kid is 7, so I've heard that some moms take Fridays off for a while, for example.

In my assessment, I'd rather have the money taken straight away and not have to worry about all the things you'd have to worry about in the US. In the States you can keep a lot of your money, but then what if you get cancer? What if you become disabled? What if your kid wants to go to Yale? Will you be safe in retirement? And what if the economy crashes and you lose your job? These worries aren't as significant here.

But to me, the big difference between the United States and Sweden is trust in government. Clearly, Swedes almost blindly trust their government to take their money and do what's best with it. (It seems to be working fine.) This kind of system can't even be IMAGINED in the US because the people (justifiably) don't trust their government to do the right thing. A high-tax high-return system just would not work in the US. In my opinion, it never will.

I want to very briefly touch on two other huge differences that allow this to work in Sweden: 1st, Sweden, up until recently, was a fairly homogeneous society without a significant wealth gap. This makes it easier to have the government take money and maintain the status quo of everyone getting the same generous benefits. Secondly, Sweden believes deeply in parity and equity. It's not cool to be better than your classmate, and it's not cool to be flashy. You don't want to stand out, you want to fit in and be like everyone else. (For example, it's not smart to brag on personal letters here because thinking you're the best is unattractive.) This also allows for people to be more confident that having a government that aims to equalize wealth (and takes a bit more from the rich) is the right thing to do.

With the United States history of slavery and multiple waves of immigration, in addition to a growing wealth gap, I don't think that a tax system of Sweden's strength would go over well with voters - especially the rich ones who can afford to pay for health insurance and college, and don't want to give that up to even out the wealth gap.

Sweden's lookin' pretty good to me from where I stand, with the United States' budgetary and economic issues.

Radio Silence

My apologies family and friends! I have been MIA, I acknowledge it. My good news of having a bit of work has made me ridiculously busy. I kid you not, I have been booked 6 out of 7 days for 3 weeks straight. And I am not so good at saying no. But it feels good to be helping out in the form of 10-15 hours per week.

But we have more good news! Dan and I have been on the hunt for an apartment. The market here is insane. Many large leasing companies have 6-year queues to be given the option to rent (a client of mine reported she was on the list for 6 years before she got a place with the largest company in Lund). Many students who come to study at Lund University end up returning home because they can't find a place. They camp until it gets cold, then they exhaust their funds in the hostels, then each year some go home. It's that bad. Even Swedes say it's hard for them.

So understandably we've been really nervous about what our long-term housing situation would be. Our current apartment was set to be a 6-month lease. But since that would've put us out at the end of April, and we hadn't found anything, we were starting to worry. We did indeed convince the University to let us stay a full-year if we needed it but we knew we should keep looking anyway.

For us, there are two big factors that we were taking into account during our housing search. First, we have both moved so much in the past few years. I have moved more than one time each year for the past 4.5 years. And Dan has moved a lot as well, although luckily he had a place in grad school for 4 years. Nonetheless, we're at a point in our lives where it'd be nice to settle down a little bit. Yes we may be lovers of travel and adventure, but you need a good home base, especially when you're so far from family, friends, and Bruegger's.

The second factor is cats. Ever since Dan and I fostered the adorable and irreplaceable Yuki and Ayira, we have talked almost daily about having our own cats. I can't put into words how much happiness it would bring us to have kittens to keep us company.

One complicating factor here is the idea of first-hand or second-hand leases. In Sweden, many leases are sublets, or even sublets of sublets (second-hand and third-hand respectively). That means that a) the price is jacked up because each person who is subletting their apartment out is lining their pockets a little; b) you will probably just have 6-month or 1-year leases, without the security of being able to stay as long as you'd like. But first-hand leases are exceedingly rare.

Okay enough with the background. So Dan and I have these good friends Michelle and Allen who are both Americans and we all hang out quite often. They're the ones who we usually go to when we don't understand things or can't find something we need. So Michelle tipped us off that there were some empty apartments in her complex and gave us the contact of the leasing company they live with.

I called the company and the woman asked if I could send her an email telling her about myself, ie where we're from, why we're here, kids, jobs, etc. I did of course, right away, honestly thinking I wouldn't hear a single thing back (like the other apartment complexes we've contacted). But the day after the sent the email, she called me and told me she had an apartment for us to look at. We viewed the apartment two days later.

Let me tell you about it! It's on the north side of town about 15 minutes from the center on a bike and also right on a bus line. There is a huge balcony facing south-west. It has two bedrooms. There's a washing machine IN the apartment. It was built in the past few years and it's in great condition. They allow cats, and it's a first-hand lease. It seemed honestly too good to be true; Dan and I were giddy.

The only down-side is the cost. The base-rent is the same amount Dan and I pay here, and that is one of the reasons we sort of didn't want to stay here a full-year. It's feels outrageous by American standards, but we're not in Kansas anymore... On top of that base amount we'll have to pay for electricity as well as internet. Additionally, we have to furnish the place ourselves. So that was an ouch, but, for the stability of a place we can stay in long-term and the ability to comfortably host our families and friends, we decided that it was well worth the cost.

We just found out two days ago that we can indeed have the place. We sign the lease Tuesday. We move May 2nd or 3rd. We are so happy, so relieved, and so excited! We will have a home and two kitties to fill it with.