Globalization government spending and taxation in the oecd pdf

Sandford, Cedric. Bath, England: Fiscal Publications. Scharpf, Fritz. The viability of advanced welfare states in the international economy: Vulnerabilties and options. Journal of European Public Policy 7 2 Schjelderup, Guttrom. Scandinavian Journal of Economics 95 3 Intervjun: Kjell-Olof Feldt. Skatt pa Bolagskapital The taxation of corporate capital.

Stockho lm: Thomas Lindberg. Stockho lm: SOU. Utredning om reformerad inkomst beskattning Proposition to reform income taxation. Reformerade foretagsbeskattning reformed corporate taxation. I, II ed. Stockholm: SOU. Stockholm: Statens Offentliga Utredningar. Steinmo, Sven. Social democracy vs. Politics and Society 16 4 New Haven: Yale University Press.

An end to redistribution? Tax reform and the globalization of the world economy. Svallfors, Stefan. Lund: Arkiv. Svallfors, Stephan. European Journal of Sociology Sverenius, Torsten. What happened with the Swedish economy after ? Swank, Duane. Political Studies 46 4 Swenson, Peter. Fair shares: Unions, pay and politics in Sweden and West Germany.

Ithaca: Cornell University Press. Labor and the limits of the welfare state. Comparative Politics 23 4 Tanzi, Vito. Taxation in an Integrating World. Tanzi, Vito, and Ludger Schuknecht. Public Spending in the 20th Century: A global perspective. Cambridge: Cambridge University Press. Witte, John. The distribution of federal tax expenditures. Policy Studies Journal This debate and these arguments have become quite common in the public literature and are thus sometimes discounted Korten But various versions of these arguments have been offered and are taken very seriously also by some of the world's leading political scientists and economists as well.

Public opinion polls indicate a continued commitment to specifically redistributive policies that has remained largely constant over the past two decades. Svallfors b. Even attitudes specifically focused on taxation have not changed appreciably in recent years.

Edlund There is today a large debate over whether Sweden actually has had a successful economic performance of the past several decades. See note 13 below. A Harvard report on tax policy in Sweden in the late fifties, for example, glowingly reported that this country had an arsenal of revenue devises unmatched elsewhere in the world Norr, Duffy, and Sterner Assar Lindbeck, certainly the most influential and powerful economist in Sweden since Gunnar Myrdal wrote in , for example, One can look in any elementary economics textbook today and see that we have the possibility through monetary and fiscal policy to maintain total demand in the economy exactly at any point that we wish Lindbeck It was widely understood that companies had many more tax write-offs available to them than they generally took advantage of.

However, due to their need to report at least some profits and pay some dividends to stockholders, corporations rarely took advantage of what was available to them. See Steinmo The idea was to encourage structural modernization and change in the economy by literally increasing profits in some sectors while driving other companies and sectors out of business. Most importantly, the Ghent unemployment insurance was established which effectively gave the unions control over unemployment insurance cf.

Rothstein But other pro-union public policies were also set up and certainly the anti-union incentives co mmon throughout the capitalist world were eliminated. Optimal fiscal policy was commonly taught in economic depart ments in Sweden and throughout the world. In recent years there has been a very large debate among political economists and economists in Swedes over whether Sweden actually did so well in the post-war years. It is outside the scope of this paper to evaluate the conflicting claims made in these various econometric arguments.

For our purposes two point are necessary. First, at the time up to the mids at least there was a broad consensus among political and economic elites that the Swedish economy had done remarkably well in the po st-war years. Dowrick ; Henrekson ; Korpi Moen and Wallerstein argue that these arguments were probably overstated.

The curious result was a tax system that produced enormous revenues, but was not in itself particularly progressive Steinmo, Mo reover, these high tax rates had been used by finance officials in their micro management objectives. It was widely understood that in all but a few isolated cases ie.

The tax expenditure system had been designed to allow the big capitalists to retain their wealth holdings as long as they left them in the corporate sector inside Sweden. In Sweden, however, the revenue needs of t he state were so high that little could in fact be turned back, no matter how politically attractive this may have been. Calmfors, , quoted in Moses, 68 Interview with author, April Feldt was Minister of Finance and Actually the question was What does your heart burn for?

Some of the more important of these included were included in official public research reports SOU. See St einmo for a list of some of the reforms introduced in the s. Overall the tax system witnessed several hundred specific changes in this period. Though actually introduced by a bourgeois coalition government in the Tax Reform represented the culmination of more than a decade s work on the part of the Social Democratic Minister of Finance, Kjell Olof Feldt.

Essentially, a two rate personal income tax system was created. Income over 74, Kronor approx. There were a large number of income tax base broadening measures, certainly the most important of these was to eliminate the deductibity of all interest payments from personal income tax.

Before the reform, this write-off was so tax favorable that a large number of Swedes borrowed money for investment particularly in real estate and then deducted the interest. Given that almost all Swedes at that time had marginal inco me tax rates between 50 and 80 percent, this meant that the government effectively paid at least half of the cost of the investment.

This cash machine resulted in a net loss in capital income tax revenue to the government Agell, Berg, and Edin Sweden was in the midst of the most serious recession in post-war history at t he time. Thus it is difficult to specifically evaluate the exact costs of the tax reform. By substantially eliminating the deductibility of interest even on owner occupied homes, those who had borrowed to finance purchases now found they could not afford their loans.

Given that this occurred inside a general recession, the result was a collapse of the market. GPD actually decreased in , and Thus, for example, employees were no longer eligible for full pay for up to three days sick leave even when they had no slip from a doctor. A number of similar reforms were reduced as well. Some, of course, cause considerable financial hardship in specific public bureaucracies. The health care sector appears to have been particularly hard hit SOU, One of the commitments made to the LO during the final negotiations for the reform was that a analysis would be made of the reforms redistributive effects after the reform was introduced.

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North-South Trade, Employment and Inequality. New York: Oxford University Press. Download references. You can also search for this author in PubMed Google Scholar. He is author of Partisan Politics in the Global Economy and numerous articles in comparative and international political economy and European integration.

Reprints and Permissions. Garrett, G. Globalization and government spending around the world. St Comp Int Dev 35, 3—29 Download citation. Issue Date : December Anyone you share the following link with will be able to read this content:. Sorry, a shareable link is not currently available for this article. Provided by the Springer Nature SharedIt content-sharing initiative.

Skip to main content. Search SpringerLink Search. Google Scholar Bryant, Ralph. Google Scholar Cameron, David R. Year—to—year increases in total trade and international financial openness in the past three decades have been associated with less government spending. In contrast, integration into global markets has not been associated either with reductions in capital tax rates, or with shifts in the burden of taxation from capital to consumption and labor income.

Moreover, countries with greater inflows and outflows of foreign direct investment tend to tax capital more heavily. European Journal of Political Research — Wiley. Continue with Facebook. Sign up with Google. Log in with Microsoft. Bookmark this article. You can see your Bookmarks on your DeepDyve Library. Sign Up Log In. Copy and paste the desired citation format or use the link below to download a file formatted for EndNote. All DeepDyve websites use cookies to improve your online experience.

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