The Swedish Inheritance and Gift Taxation, 1885–2004

Rietz, Gunnar Du; Henrekson, Magnus; Waldenström, Daniel

doi:10.2139/ssrn.2173142

Cited by 3 publications

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“…(2) = , where denotes year-specific inheritance tax schedules presented in the previous sections (see further Du Rietz, Henrekson and Waldenström 2014). During 1948During -1959 heirs also paid estate taxes and the taxed amount was deducted from the taxable bequest, which in the case of non-family firm wealth implied the following effective inheritance tax:…”

Section: Effective Inheritance Tax Rates 1885-2004mentioning

confidence: 99%

“…In 2004 this corresponds to an estate worth SEK 265 million (about EUR 30 million). Exactly how many closely held firms of this size that existed in Sweden in 2004 (and in earlier years) is quite uncertain, but one approximation made by Du Rietz, Henrekson and Waldenström (2014) was that they were approximately one hundred. What we do know is that estate of this size represented a personal wealth at the 99.999th percentile (top one hundred) in the Swedish wealth distribution (Roine and Waldenström, 2009).…”

Section: Effective Inheritance Tax Rates 1885-2004mentioning

confidence: 99%

“…Note that the figure bounds the size of the bequest on the x-axis and thus does not show the top marginal tax rate in 1940 (20 percent from 202 worker incomes) and in 1960 (60 percent from 591 worker incomes). For tax schedules and annual worker incomes, seeDu Rietz, Henrekson and Waldenström (2014). multiple of an annual worker's income…”

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confidence: 99%

“…Various kinds of duties and fees on estates, inheritances and wills had existed earlier, but only for small and specific parts of the tax base and population strata. See DuRietz, Henrekson and Waldenström (2014) for an exhaustive description of these rules and regulations. 2 For more extensive overviews of inheritance, gift and estate taxes, see, e.g.,Gale and Slemrod (2001), Boadway, Chamberlain and Emmerson (2010) andKopczuk (2013).…”

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confidence: 99%

“…Gifts to public authorities, religious communities and foundations promoting research, education, culture or sports were tax exempt. For a detailed description of tax rates and allowances across all classes of heirs, seeDu Rietz, Henrekson and Waldenström (2014).…”

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confidence: 99%

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Inheritance Taxation in Sweden, 1885-2004: The Role of Ideology, Family Firms and Tax Avoidance

Henrekson

Waldenström

2015

SSRN Journal

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This article studies the evolution of Swedish inheritance taxation since the late nineteenth century to its abolition in 2004. The contribution of this article is twofold. First, the annual effective inheritance tax rates are computed for different sizes of bequests and asset types, accounting for all relevant exemptions, deductions, and valuation discounts. Second, an attempt is made to explain changes in inheritance taxation over time. Ideology appears to be the main driver of the sharp tax increases of the 1930s to the 1960s. Wartime economies with higher pressures on the people induced politicians to raise inheritance taxes on the wealthy, primarily during the First World War. Increased opportunities for tax planning for the wealthy are also documented, most notably a series of tax cuts on inherited family firms in the 1970s. This rise in avoidance opportunities for the rich, while middle-class heirs faced growing inheritance tax rates, undermined the legitimacy of the tax and led to its repeal.T he evolution of inheritance, gift, and estate taxation across different economic systems engenders important questions regarding the trade off between egalitarian ambitions and incentive effects in the welfare state. Inheritance taxes are among the most direct fiscal instruments for equal opportunity in every new generation. Simultaneously, however, they may dampen incentives to accumulate wealth and induce tax evasion and avoidance behaviours. Ultimately, whether such taxes positively or negatively contribute to societal development over the short and long run thus becomes an empirical question.This study offers two contributions to the literature on inheritance taxation. Most studies of long-run trends in inheritance taxation base their analysis on statutory top marginal tax rates, that is, the highest possible marginal rate paid by heirs regardless of the amount of inheritance required to reach that rate. In contrast, this article presents a new long-run series of effective average inheritance tax rates computed on the basis of the full spectrum of institutional factors affecting the actual final tax payment. Furthermore, these rates are presented for differently sized inheritances, from an average middle-class heir to an extreme upper-class heir, and for different types of inherited assets: family-firm equity and non-firm wealth. Our series are annual, they span from 1885 to 2004, and cover a period

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Section: Effective Inheritance Tax Rates 1885-2004mentioning

confidence: 99%

Section: Effective Inheritance Tax Rates 1885-2004mentioning

confidence: 99%

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confidence: 99%

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confidence: 99%

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Inheritance Taxation in Sweden, 1885-2004: The Role of Ideology, Family Firms and Tax Avoidance

Henrekson

Waldenström

2015

SSRN Journal

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The Taxation of Industrial Foundations in Sweden (1862–2018)

2020

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It has been argued that the Swedish tax system has favored firm control through industrial foundations, which should have inhibited entrepreneurship and economic growth. However, research has been hampered because of a lack of systematic historical tax data. The purpose of this study is to describe the evolution of tax rules for industrial foundations in Sweden between 1862 and 2018 and to calculate the marginal effective tax rate (METR) on capital income. The results show that the METR for an equity-financed investment is typically below 20% and occasionally peaks at approximately 40%. When the requirement that industrial foundations have to donate the bulk of capital income (less capital gains) for charitable purposes is treated as a tax, the METR is seldom below 50% when financing investments with new share issues and often exceeds 100%.

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Housing, financial and capital taxation policies to ensure robust growth

2012

OECD Economic Surveys: Sweden

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Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. ECO/WKP(2013)16 Unclassified English-Or. English ECO/WKP(2013)16 2 ABSTRACT/RÉSUMÉ Housing, financial and capital taxation policies to ensure robust growth in Sweden Extensive structural reforms since the early 1990s have strengthened the resilience of the Swedish economy to shocks. However, more needs to be done to better manage near-term risks and ensure that growth remains sustainable in the longer run. Reforming the housing market would reduce the risks associated with high house prices, ensure adequate residential investment and improve labour mobility and well-being. Clarifying the division of responsibilities in financial regulation and improving the macroprudential toolkit would reduce the risks to stability and the contingent fiscal liabilities arising from a large, concentrated banking system. Better aligning the taxation of different types of assets would make taxation more neutral. This Working Paper relates to the 2012 OECD Economic Survey of Sweden (www.oecd.org/eco/surveys/sweden).

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The Swedish Inheritance and Gift Taxation, 1885–2004

Cited by 3 publications

References 5 publications

Inheritance Taxation in Sweden, 1885-2004: The Role of Ideology, Family Firms and Tax Avoidance

Inheritance Taxation in Sweden, 1885-2004: The Role of Ideology, Family Firms and Tax Avoidance

The Taxation of Industrial Foundations in Sweden (1862–2018)

Housing, financial and capital taxation policies to ensure robust growth

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