
Study shows the top 0.01% of Scandinavian households underpaid taxes by 30% - rbanffy
https://www.economist.com/blogs/graphicdetail/2017/06/daily-chart?fsrc=scn/tw/te/bl/ed/
======
njarboe
A bit of a click-bait title as the article does not show how much or little
the super-rich of Scandinavia pay. Just a study on how much tax they are
avoiding. And with the super-rich of Scandinavia only evading 30% of their
taxes, I think I would agree with a sentence at the end of the article:

"... maybe the data should cause even more surprise: despite the best efforts
of a lucrative global tax-evasion industry, Scandinavia’s ultra-rich are
paying 70% of their taxes."

Wonder what a similar study in of people in the US would say (not that one
could really know what people are evading, or the IRS would prosecute more
people)

~~~
aaronbrethorst
> or the IRS would prosecute more people

Funny you might say that!

[https://theintercept.com/2017/10/27/david-kautter-trumps-
irs...](https://theintercept.com/2017/10/27/david-kautter-trumps-irs-chief-
oversaw-accounting-firm-fined-for-illicitly-helping-wealthy-avoid-taxes/)

~~~
njarboe
One could say he will be a great at the IRS as he has extensive and hard to
acquire knowledge on how people work around the US tax code. He can use that
to catch cheaters. Or one could say the revolving door revolved some more.

------
sytelus
The often used counter argument is that top 1% pays almost 50% of total
federal income tax.

[https://www.cnbc.com/2015/04/13/top-1-pay-nearly-half-of-
fed...](https://www.cnbc.com/2015/04/13/top-1-pay-nearly-half-of-federal-
income-taxes.html)

~~~
njarboe
I am never sure what to think of these claims when Social Security and
Medicare (both employer and employee parts) taxes aren't counted as income
taxes. Seems a bit deceiving not to include those taxes as income taxes as
they are based on a percent of your income (and only a part of your income if
you make over about $100k for Social Security).

~~~
gnicholas
True, but you also get paid back based on your Social Security payments
(should you live so long). To the extent that it's a forced-savings program,
it isn't exactly an income tax.

~~~
maxerickson
The government has borrowed and spent the entire trust fund. There are no
savings, it's funded year to year from taxes.

(the left hand of the government says it has $2.8 trillion and the right hand
of the government thinks that is a cool story
[https://www.ssa.gov/oact/TRSUM/index.html](https://www.ssa.gov/oact/TRSUM/index.html)
)

~~~
gozur88
This is true, but on the other hand it hardly makes sense for the government
to save and borrow at the same time.

~~~
maxerickson
Oh, I'm not trying to sensationalize it, I just think it is fair to peak at
the actual cash flows when people start talking about Social Security as a
savings program.

------
zaptheimpaler
Great, another study showing what we already know. There has been a constant
stream of these studies and articles for years now - at least back to the
occupy wall street movement.

Governments actually compete to get rich people to invest money into their
country, because they would rather get 10% of a big pie than 0 - wealthy
people usually have many options on where to invest. Right now, there are
cities across the US COMPETING to have Amazon build an office there. Economic
incentives will be a big part of whats on the negotiating table of course.
When you have that level of money/power, you are effectively negotiating with
the government so of course they negotiate better deals for themselves.

------
c3534l
Three issues with the article: the study looked only at Scandinavian
countries; the methodology wasn't even discussed, let alone critically
analyzed; the article contains inappropriate and unprofessional unsourced
editorializing in an article not marked as such:

"Globalisation has disproportionately benefited the rich in part by rewarding
capital more handsomely than labour. But globalisation has also made it easier
for the well-heeled to hide their wealth. In that sense, maybe the data should
cause even more surprise: despite the best efforts of a lucrative global tax-
evasion industry, Scandinavia’s ultra-rich are paying 70% of their taxes."

~~~
wpietri
You confuse inserting an opinion with having a viewpoint.

The Economist's official editorials (which they call leaders) are separate.
There they are quite free with their opinions. Elsewhere, though, they mainly
mainly stick to having a viewpoint. Since their founding 1843 they've been
firmly in favor of what we'd now call economic liberalism: their perspective
is pro-human, pro-freedom, and numerically oriented.

What they don't do much of, though, is conforming to journalistic orthodoxies
that came into fashion after they got going. In particular, you seem to want
them to ape what journalism professor calls "the view from nowhere":
[http://pressthink.org/2010/11/the-view-from-nowhere-
question...](http://pressthink.org/2010/11/the-view-from-nowhere-questions-
and-answers/)

Having read them for decades, I'm glad they don't. I often disagree with them,
but I appreciate their transparency. That's in sharp contrast to "view from
nowhere" media where you either have to puzzle out their actual viewpoint or
the articles are so watered down that they are nearly useless for
understanding anything.

~~~
c3534l
They definitely inserted an opinion. The bit I quoted gave the reader nothing
new. It conveyed no information other than the personal and uninteresting
views of the author. Had that section been removed, the reader would know
precisely the same amount of information they had before they got to that
point. It was not a viewpoint, it was an opinion (and a childish one at that),
which was inserted into an article which seems to present itself as describing
a study.

~~~
xkjkls
Why? It offered an interesting, alternative interpretation of the same data.
That seems valuable.

In a normal journalism article this same opinion would probably be offered in
the form of a quote by some competing economist, instead of directly, but the
effect is the same.

~~~
c3534l
It wasn't based on the data. Nothing in the study suggested that opinion. It's
simply the statement of a narrative. That's part of why I specifically
mentioned "unsourced." The claim doesn't follow from anything the article
meant to cover.

~~~
wpietri
The article contextualized the study in a broader base of knowledge. That's
part of why they're so valuable to readers: they just don't rewrite the
study's abstract; they write about the study from the viewpoint of somebody
who knows the topic and can connect this one item to a broader understanding.

------
GuB-42
I expected more, 30% evasion is not that much. Scandinavia has progressive
taxation, and the super rich should pay super taxes. Tax evasion essentially
put them at the the same level as the middle class.

Also don't be mislead by rates. In absolute terms, the super rich pay a lot of
taxes, it is only unimpressive in relative terms.

Now there is some ambiguity about the term "tax evasion". Does it only include
illegal, punishable practices or are dubious but technically legal
"optimization" techniques included? The conclusion could be very different.

------
tudorconstantin
The Scandinavian countries have a progressive tax rate. Even with the "evading
30% of their taxes" they can actually pay more, percentage wise, than the low
earners, not to mention the amount paid in absolute value.

These kind of articles look like cheap communist propaganda, throwing dirt to
the high producers of a community because they don't contribute "enough" to
the welfare of the non-producers. These low-earners are painted as being
somehow entitled to what others who are working harder, or smarter, or are
willing to take risks are producing.

~~~
fludlight
The USA has a progressive tax rate, at least the "sticker" rates. Once you get
into advanced tax management strategies[1] it becomes a regressive tax whereby
Warren Buffett[2] pays a lower rate than his secretary.

[1] Hire a team of accountants, lawyers, and bankers to do your taxes. If
you're really brave let the government sue you if there is a disagreement. The
way budgets and incentives are set up at the IRS and Justice, the government
lawyers will get a status bump for settling your case for ten cents on the
dollar so they won't risk losing at trial. You might have $10m to spend on a
protracted legal fight but Congress purposely underfunds the prosecution. Note
that this only applies to billionaires. Garden variety millionaires can also
make the system look regressive due to things like the income caps on Social
Security taxes, the huge discounts in state tax equity secondary markets, a
cornucopia of deductions, shifting income from W-2 to long term capital gains,
and playing "will I get audited (by someone competent)" roulette.

[2] Name used for illustrative purposes only. Based on the way his holdings
are reportedly structured, Buffett probably doesn't engage in tax fraud. The
guy just has too much money to care, it's mostly tied up in one well-
structured investment, and he's donating it all to charity so why bother?

------
elevensies
Given that tax was invented to transfer wealth from the poor to the rich, I
don't think it is surprising that taxation is ineffective at transferring
wealth from the rich to the poor.

------
amatecha
Meanwhile regional governments are working to increase taxation of middle-
class business owners and so on... ಠ_ಠ

------
qvorak
We don't need much of a study to see how little[1] corporations pay in taxes
relative to the quoted rates of 30%+ that are thrown around.

[1]
[http://erikrood.com/Posts/tax_rates.html](http://erikrood.com/Posts/tax_rates.html)

------
foota
I don't think that inequality is in and of itself bad (in fact I rather
strongly oppose measures that enforce equality for equality's sake), but I do
believe that we should use the wealth generated by our society to assure some
base standard of living for all.

------
abtinf
For an alternative point of view, check out Equal is Unfair by Yaron Brook.

[https://www.amazon.com/dp/125008444X/](https://www.amazon.com/dp/125008444X/)

Edit: several commentors have asked why I posted this link. The entire framing
of the article and source paper is based on the idea that tax evasion is bad
because of its relation to inequality. This book shows that the concept of
inequality is misguided and shows a better framework for human flourishing.

~~~
specialist
_" Yaron Brook is an Israeli-born American entrepreneur, author, and former
academic, who currently serves as executive chairman of the Ayn Rand
Institute..."_

That's as far as I got.

~~~
abtinf
What happened?

~~~
wavefunction
Many people consider the philosophy of Ayn Rand simplistic and incorrect both
in its precepts as well as supposed outcomes.

~~~
abtinf
Could you explain what you mean by that? Could you state the case made by Rand
in such a way that her proponents would agree with you, and then show the
errors that make it incorrect?

------
eevilspock
The Matthew Effect rules:

1\. More money makes it easier to earn more money.

2\. More money buys more ways to avoid taxes, both legally and illegally.

3\. More money buys more political power (i.e. corruption of democracy).

4\. More political power ensures 1, 2 and even 3.

~~~
microcolonel
There's an independent variable in this: how broad the government's mandate
is.

If the mandate is narrow, none of the above steps have much negative effect on
the functioning of society. If the mandate of government is broad, or capable
of becoming broader, all of them have a negative effect, and the third ensures
that the mandate broadens, which grows the negative effect proportionally.

------
walshemj
well out side of the members of ABBA those three countries don't have any
super rich as compared to china and Russia say.

~~~
tooltalk
how about Ingvar Kamprad of IKEA? Of course, he moved to Swiss in early 1970's
to avoid Sweden's high taxes.

[https://www.forbes.com/sites/robertwood/2015/11/02/how-
ikea-...](https://www.forbes.com/sites/robertwood/2015/11/02/how-ikea-
billionaire-legally-avoided-taxes-from-1973-until-2015/#219c7f635af5)

------
maxharris
What's going on here?

This article got promoted while this other link, which was posted almost at
the same time (and not by me) was simply deleted:

"World's Poorest People Are Getting Richer Faster than Anyone Else"
[https://fee.org/articles/the-worlds-poorest-people-are-
getti...](https://fee.org/articles/the-worlds-poorest-people-are-getting-
richer-faster-than-anyone-else/)

I don't think it's healthy for this site to become an echo chamber where the
only articles that anyone is allowed to see are all from the same viewpoint.

~~~
linkregister
Do you recommend a site moderator police the upvotes that an article receives?

~~~
maxharris
No, all I'm saying is that they shouldn't delete articles simply because they
disagree with the viewpoint of the author.

~~~
linkregister
Sorry, my reading comprehension on your post wasn’t too hot. I agree that you
should be questioning what happened.

I don’t see it in hn.algolia.com.

~~~
grzm
Besides deleted items, flagged and dead items aren't returned via
hn.algolia.com either.

------
gfody
oh nvm I read the chart backwards, they should really label their axis

------
ransom1538
100+ billion dollar corporations stashing money in Ireland, then paying debt
off with other large US companies in Irish bank accounts. All this to just
grow massive cash reserves. Nice -- meanwhile - Cesar Chavez Elementary School
(san jose 10 miles? away) has a ranking of 4/10 (wtf).

"Let them eat cake"

~~~
greedo
Got any links that show a correlation between the ranking of Cesar Chavez
Elementary School and growing overseas cash reserves? Is CCE underfunded
compared to other peer schools in CA? There's been little research that shows
a correlation between student performance and school funding. The US generally
spends in the top 10 per student world wide.

~~~
literallycancer
>The US generally spends in the top 10 per student world wide.

Is that adjusted for COL/purchasing power differences?

