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A 150-year Perspective on Swedish Capital Income Taxation

Author

Listed:
  • Du Rietz, Gunnar

    (Research Institute of Industrial Economics (IFN))

  • Johansson, Dan

    (Örebro University School of Business)

  • Stenkula, Mikael

    (Research Institute of Industrial Economics (IFN))

Abstract

This paper describes the evolution of capital income taxation, including corporate, dividend, interest, capital gains and wealth taxation, in Sweden between 1862 and 2010. To illustrate the evolution, we present annual time-series data on the marginal effective tax rates on capital income (METR) for a marginal investment financed with new share issues, retained earnings or debt. Tax tables covering the period are presented. These data are unique in their consistency, thoroughness and time span covered. The METR is low, is stable and does not exceed five percent until World War I, when it starts to drift somewhat upward and vary depending on the source of finance. The outbreak of World War II starts a period when the magnitude and variation of the METR sharply increases. The METR peaks during the 1970s and 1980s and often exceeds 100 percent. The 1990–1991 tax reform and lower inflation reduce the magnitude and variation of the METR. The METR varies between 15 and 40 percent at the end of the examined period.

Suggested Citation

  • Du Rietz, Gunnar & Johansson, Dan & Stenkula, Mikael, 2014. "A 150-year Perspective on Swedish Capital Income Taxation," Working Papers 2014:2, Örebro University, School of Business.
    • Handle: RePEc:hhs:oruesi:2014_002
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    References listed on IDEAS

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    1. Almas Heshmati & Dan Johansson & Carl Magnus Bjuggren, 2010. "Effective Corporate Tax Rates and the Size Distribution of Firms," Journal of Industry, Competition and Trade, Springer, vol. 10(3), pages 297-317, September.
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    Cited by:

    1. Stenkula Mikael, 2014. "Swedish Taxation in a 150-year Perspective," Nordic Tax Journal, Sciendo, vol. 2014(2), pages 10-42, November.
    2. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    3. Henrekson Magnus & Rietz Gunnar Du, 2014. "The Rise and Fall of Swedish Wealth Taxation," Nordic Tax Journal, Sciendo, vol. 2014(1), pages 9-35, May.

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    More about this item

    Keywords

    cost of capital; marginal effective tax rates; marginal tax wedges; tax reforms;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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