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From Bicycles To Washing Machines: Sweden To Give Tax Breaks For Repairs (mnn.com)
jenningsthecat writes: The Swedish government is putting its money where its mouth is when it comes to encouraging the repair of stuff that would otherwise be thrown away, according to both The Guardian and Fast Company. The country's Social Democrat and Green party coalition have submitted proposals to Parliament that would reduce the value-added-tax (VAT) on bicycle, clothing, and shoe repairs from 25% to 12%. Also proposed is an income tax deduction equalling half the labor cost of repairing household appliances. According to The Guardian, "the incentives are part of a shift in government focus from reducing carbon emissions produced domestically to reducing emissions tied to goods produced elsewhere." Per Bolund, Sweden's Minister for Financial Markets and Consumer Affairs, said the policy also tied in with international trends around reduced consumption and crafts, such as the "maker movement" and the sharing economy, both of which have strong followings in Sweden. The VAT cut may create more jobs for immigrants as it could spur the creation of a new home-repairs service industry. Also, from a science standpoint, the incentives could help cut the cost of carbon emissions on the planet as it should in theory reduce emissions linked to consumption. "I believe there is a shift in view in Sweden at the moment. There is an increased knowledge that we need to make our things last longer in order to reduce materials' consumption," Bolund said. The Guardian's report concludes: "The proposals will be presented in parliament as part of the government's budget proposals and if voted through in December will become law from January 1, 2017."
Sweden?!?! Tax cut?!?!?
Sweden has high taxes by American standards, but by many measures they are otherwise even more capitalist than America. Their post office is privatized, as is a big fraction of their educational system. It is very easy to start a business, and while regulations are strict, they are also streamlined and the bureaucracy is fast and efficient. Sweden ranks 8th out of 185 countries on the Ease of doing business index. America is only one notch higher.
Germany has been doing this for years but in the form of a tax refund. You get all of the VAT back for things like the gardner, house cleaning or plumber but only up to 2k€ or so. Supposed to discourage undocumented work (and help Germany collect the labor income taxes).
I'd really like to see what factual basis you're employing for this argument, because I'm not seeing one. In fact, I come to exactly the opposite conclusion, maybe because (a) I live in Sweden, (b) I know what a washing machine costs here, and (c) I can do simple maths.
Washing machine X costs the same regardless of your income. (Yes, if you make more, you can buy a more expensive machine, in which case it's a different machine.)
If I make 100000 SEK a year and spend 10000 of it on that washing machine, that's 10% of my income. If I spend 5000 to repair it, that's 5%. If I get back 2500 of that on my taxes, that's 2.5%.
If I make 200000 SEK a year and spend 10000 of it on a washing machine, that's 5% of my income. If I spend 5000 to repair it, that's 2.5%. If I get back 2500 of that on my taxes, that's 1.25%.
So, if anything, the tax cut actually benefits low-income folks *more* than it does the wealthy since it returns a greater proportion of their income. What's your evidence to the contrary, other than grand pronouncements?
Il n'y a pas de Planet B.