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Swedish Capital Income Taxation (1862–2013)

Gunnar Du Rietz (), Dan Johansson and Mikael Stenkula
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Gunnar Du Rietz: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

No 1004, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper describes the evolution of capital income taxation in Sweden between 1862 and 2013, including the taxation of corporate profits, dividends, capital gains, interest income, and wealth taxation. To illustrate this evolution, we present annual time-series data regarding the marginal effective tax rates on capital income (METR) for a marginal investment financed with new share issues, retained earnings or debt. The METR is low and stable and does not exceed five percent until World War I, when it begins to drift somewhat upward and vary depending on the source of finance. The outbreak of World War II begins a period during which the magnitude and variation of the METR sharply increase. The METR peaks during the 1970s and 1980s and often exceeds 100 percent. The 1990–1991 tax reform and lower rates of inflation reduce the magnitude and variation of the METR, which varies between 15 and 35 percent at the end of the period examined.

Keywords: Cost of capital; Marginal effective tax rates; Marginal tax wedges; Tax reforms (search for similar items in EconPapers)
JEL-codes: H21 H31 N44 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2014-02-07, Revised 2015-09-10
New Economics Papers: this item is included in nep-acc, nep-his, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Forthcoming in Swedish Taxation: Developments Since 1862, Henrekson, Magnus, Stenkula, Mikael (eds.), Palgrave Macmillan.

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Related works:
Chapter: Swedish Capital Income Taxation (1862–2013) (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1004

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