[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!]
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!
Your taxes DO get lowered the more debt you carry, so there's definitely a bit of cost/benefit that happens there. :) We've considered bringing our US debt over to help with how much we pay in taxes.
ReplyDeleteWe DO pay for health insurance, healthcare and education; 50% of our taxes go to that. But when it comes to cars being nicer and not a bunch of junkers, that is partly because of the very strict inspection requirements on cars. If your car is not up to snuff, you are banned from driving it until it's brought up to code. That includes everything from exhaust levels to rust.
ReplyDeleteAnd people don't use credit cards here the way they do in the States, as far as I'm aware. We have no credit card debt ourselves...our only debts are house mortgage and car loan(s). We spend differently than we did in the States and we don't live beyond our means the way we did there either.
Thanks Michelle and Liz! I hope people read this comment. I have a lot to learn :)
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