Despite its image as a welfare state, Sweden’s central government has little responsibility for public services. Instead, local and regional councils provide health, education and social services in their areas and set their own income taxes to pay for it.
Three quarters of the country’s public services are provided locally, with 80 per cent of the cost raised by the 290 municipalities and 20 county councils. Central government grants, largely involving transfers to support less populated areas, account for only 12 per cent of spending, with the rest raised from fees and rents.
Income taxes average 32 per cent across the country but vary according to where Swedes live. Those earning more than £3,600 a month also pay 20 per cent to the central government, making a marginal tax rate of 55 per cent. Councils do not collect corporate taxes, which go directly to central government.
It’s a place where local government actually means something. Might be worth importing that idea, eh?