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Demokratiskolan
The Taxes card from MethodKit for Society and Politics
Card 94 of 128 · MethodKit for Society & Politics
  • AreaThe state & public administration
  • Centre of gravityCentral government
  • Points of influence3 on the journey
  • Decisive electionThe general election
The state & public administration

Taxes

Income, VAT, capital, property, inheritance & others

Tax is the biggest bill most of us pay, and at the same time the one we notice least. Of every hundred kronor in income tax, most goes not to central government but to your municipality and your region. The Riksdag writes the tax laws, but the rate on your payslip is set in the municipal hall and the regional hall.

Where does the power lie?1

  • Municipality · municipal tax & fees · approx 30 %
  • Region · regional tax · approx 15 %
  • State · tax laws, VAT & state tax · approx 45 %
  • EU · VAT rules & excise duties · approx 10 %

The Riksdag owns the rules: what is taxed and how. But the municipality and region set their own rates, so three elections shape your total tax.

How it works: the breakdown

The municipalityYour biggest tax
The regionFunding for healthcare
Central governmentThe rule-maker · centre of gravity
Who decides?
The municipal council (kommunfullmäktige) decides the tax rate each year alongside the budget.
The regional council (regionfullmäktige) decides the regional tax each year.
The Riksdag makes all tax law. The Swedish Tax Agency (Skatteverket) calculates, collects and pays out.
What do they decide?
The municipal tax, about two thirds of your local income tax, plus fees for water, refuse and building permits.
The regional tax, about one third of your local income tax. Almost all of it goes to healthcare.
State income tax above the threshold, capital tax, VAT and excise duties, plus the rules for all taxes.
Where are decisions made?
In the council's budget decision in the autumn, an open meeting with public documents.
In the regional council's budget decision, open meetings and documents.
In the Riksdag and at the Tax Agency. Tax proposals go out for open referral (remiss).
Who pays?
The money goes to schools, care and streets: the municipality's core tasks.
The money goes to health centres, hospitals and public transport.
The money goes to the central government budget: defense, the justice system, benefits and grants to the municipalities.
Fastest way in?
Municipal election The municipal election decides the tax rate and what the money goes to. The budget meeting is open.
Regional election The regional election shapes the tax and the resources for healthcare.
General election The general election shapes the tax system. Referral responses on tax proposals are open to all.
EUThe EU harmonises VAT and excise duties through directives that the Riksdag implements, but income tax is national. Shaped in the European Parliament election.

Read the table by column to understand one level, or by row to compare the levels. The green level is the area's centre of gravity.

How it works: follow the decision

The case A tax krona travels through the system
  1. StateEU

    The Riksdag writes the rules

    The tax laws decide what is taxed: work, capital, consumption. For VAT, the EU's directives set a framework that the Riksdag works within.

    Point of influence

    The general election is the big tax election. Tax proposals go out for referral (remiss) and the responses are public.

  2. MunicipalityRegion

    The tax rate is set close to you

    Each autumn the municipal and regional councils decide their tax rates for the coming year. That is why the tax differs between municipalities.

    Point of influence

    Two more elections, the municipal and the regional, decide the largest part of your income tax.

  3. State

    The employer deducts, the Tax Agency collects

    Preliminary tax is deducted every month before your pay reaches you. The Tax Agency collects the money and pays out the municipality's and the region's shares.

  4. State

    The equalisation evens things out

    Before the money becomes services, the equalisation system redistributes between municipalities and regions, so that even those with a weak tax base can provide comparable service.

  5. Municipality

    The council allocates it in the budget

    The tax krona becomes teaching posts, home-care hours and street lighting. The allocation is a political decision made in open meetings.

    Point of influence

    The municipality's budget meeting is open to everyone, and many municipalities accept views and citizen's proposals (medborgarförslag) before the decision.

  6. Your everyday life

    The tax return in the spring

    You approve your tax return with a few clicks. By then your tax krona has already become a lesson in school and a night in the emergency room.

The journey looks the same in reverse: what has been built came the same way, through the same decisions. Whoever knows where the decisions are made also knows where they can be changed.

Questions to discuss

  1. Do you know how high your municipal tax is, and what the neighbouring municipality charges?

  2. What separates a tax you accept from one that annoys you?

  3. Is it fair that the tax rate can differ by several kronor between municipalities?

  4. If you could move a tax krona between two areas, where would it come from and where would it go?

  5. VAT is barely noticed but paid by everyone. What do invisible taxes do to our sense of what things cost?

Glossary

Kommunalskatt
The income tax to the municipality and region. The rate is on your payslip and is decided by the council.
Brytpunkt
The income threshold where you start paying state income tax of 20 percent on top of the municipal tax.
Moms
Tax on most of what you buy, normally 25 percent, baked into the price.
Punktskatt
Extra tax on selected goods such as petrol, alcohol and tobacco, often to steer behaviour.
Skatteutjämning
The system that redistributes money so that all municipalities and regions can provide comparable service.
Preliminärskatt
The tax the employer deducts each month, an advance that is reconciled in the tax return.

Go further

Footnotes

1) This is an estimate of how decision-making power over the issue is split between the municipality, the region, central government and the EU, based on how responsibility is divided in legislation. A teaching guide, not an exact measurement.