Making Welfare Benefits Taxable – A Simple Way to Reduce Fraud

Sweden has a significant problem with welfare exploitation. This concerns both ethnic Swedes and immigrants – the issue is not limited to any one group.

Fraud takes many forms: from improper claims for care allowance to the use of multiple coordination numbers. A coordination number is a temporary identification number that can be compared to a Swedish personal identity number.

One effective way to reduce this type of abuse would be to make all welfare benefits taxable. If every form of support — income support, housing allowance, sickness compensation, etc. — became taxable income, all recipients would need to be properly registered in the Swedish Tax Agency’s population and income registers. This would make it significantly harder to maintain double identities, use fake or multiple coordination numbers, or have “invisible” recipients receiving benefits.

Making benefits taxable would not eliminate all fraud, but it would be one of the most powerful single measures to increase transparency and control. Several countries, including the Netherlands and Denmark, have moved in this direction with stricter registration requirements for welfare payments.

It’s time for Sweden to take welfare integrity seriously again.

“Varje förslösad skattekrona är en stöld från det svenska folket.”

— Gustav Möller, legendarisk socialdemokratisk före detta minister för hälsa och sociala frågor i Sverige

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Is tax the rich left-wing language to ruin the rich?

The left in Sweden is no different from the left in other countries. The solution to all their problems is to tax the rich. Something they already do.

On April 24, 2025, EkonomiFakta reported tax revenues by income group. In Sweden, approximately 60% of total tax revenue comes from taxes on labor, primarily income taxes and general payroll tax. However, there is a big difference in how much different individuals pay in taxes, because the tax rate is progressive and increases the more you earn.

In these calculations, tax is defined as the sum of the taxes we declare ourselves in our income tax return. Most of this tax primarily relates to municipal and state income tax, capital tax and municipal property tax. Various tax deductions, such as earned income tax deductions and more, made in the income tax return, reduce the final tax on which the return is based.

In 2023, the income group with an annual income exceeding $80,000 contributed, they constitute 4% of taxpayers, with 24% of total tax payments.

The same year, the income group with an annual income below $19,900 contributed, they constitute 73% of taxpayers, with 12% of total tax payments.

Based on these facts, can one truly say that the rich pay too little in taxes, and above all, how sustainable is this? We are definitely not among the 4% with the highest annual income, but we have also started thinking about moving from Sweden as soon as the world's most perfect teenager finishes his university education. As the Swedish social contract fails, our willingness to work and pay taxes in Sweden is decreasing.

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Almost done

Yesterday I filled out my, my husband's, my mom's and my dad's income tax returns for 2024. I filed Junior's income tax return earlier this week, so now it's only my late uncle, who passed away on January 2nd of this year, whose income tax return I have left to do.

Of these five returns I have filed, four of us are getting money back on our taxes while my dad had to pay $11,450 in back taxes. The reason for this is that his company is a general partnership, unlike ours which are limited liability companies, which in practice means that he personally has to pay the tax for the established profit in the company, unlike a limited company where the company pays corporate tax. Because of this, my dad has to make an extra tax payment every year at this time of year.

The only thing left before I'm done with this year's income tax returns is for my dad, as the next of kin, to contact the Swedish Tax Agency to get login details for my late uncle's tax return information so I can complete and submit his tax return as well.

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I and the left's perception of whose money it is differ markedly

Tomorrow, the government and its partner party, the Sweden Democrats, will present next year's budget. A lot of news has already leaked out, including some tax cuts. For example, the current government has chosen to strengthen the current earned income tax credit so that it will pay off a little more to work instead of receiving various benefits.

This change means reduced tax revenue, which is a big difference from what the left claims, namely that this earned income tax credit will cost the government money. According to the reasoning of the left, all income in Sweden must belong to the state in order for a reduced income tax to become a cost. This strengthening of the earned income tax credit means that we who work get to keep a little more of our own money.

I am happy to help people who have difficulty finding work with my tax payments, but there are groups of people in Sweden who have chosen to live on various benefits such as housing allowance, child allowance, multi-child allowance etcetera.

There are even people who choose to divorce on paper so that whoever has custody of the children can then receive alimony from the Swedish Social Insurance Agency. In connection with this procedure, the Swedish social service often helps the other custodian with a one-room apartment that the family sublet illegally because they still live as a couple in real life.

An uncle of one of my friends did exactly this. My friend ended up contacting the Swedish social service as he couldn't stand his uncle receiving various benefits and even a one bedroom apartment at my friend's expense AKA tax money.

They are in for a rude awakening

During Covid-19, several Swedish companies found themselves in an acute liquidity crisis. In order to "help" these companies, the socialist government at the time decided that the companies that found themselves in an economic crisis could apply for a deferment with payments of employer's contributions, deductions for withholding tax and VAT. Giving the companies a reprieve was more of a disservice than a benefaction.

That it is more of a disservice than a benefaction is due to the fact that tax payments in Sweden become personal in the event of bankruptcy. On September 12, 2024, all taxes previously granted deferment must be paid. Businesses that cannot pay these taxes will eventually go out of business. The consequence is that these entrepreneurs become personally responsible for the taxes. If the companies had been forced to go bankrupt during the pandemic, the tax liabilities would most likely have been significantly lower.

You never EVER postpone a tax payment

This morning at 9:30 a.m. (GMT+2) the announcement came from Sweden's central bank AKA Riksbanken that it is lowering the policy rate by 25 basis points to 3.5%. The disappointment is great among all actors who had hoped for 50 points, i.e. a double reduction. This will most likely deepen and prolong the ongoing Swedish recession.

Unemployment increases daily with both notices and layoffs. Bankruptcies have also increased. During Covid-19, companies that suffered from a lack of liquidity and declining sales could apply for postponement of the payment of various taxes. This deferment ends on September 11, 2024, which means that all taxes are due for payment as of September 12, 2024. I suspect bankruptcies will increase next month.

In Sweden, taxes are personal, which means that in the event of bankruptcy, all taxes that a company owes to the Swedish state are transferred from the company to the board. In reality, this means that many business owners who will have to file for bankruptcy next month will also have a large personal tax debt.

Today I wasn't daddy's little "girl" 😊

Today I completed the last 4 income tax returns for the year, 3 personal tax returns and 1 company tax return.

My mom was happy because she will get a little over $3,500 back, unlike my dad who has to pay just under $10,000. I also made the income tax return for my dad's brother. He will get back about $175.

The last income tax returns referred to my parents' company tax return. Company tax returns are easier to make compared to personal tax returns.

My reluctance to pay taxes is increasing all the time

Today was the time for yet another payment of the capital tax on our endowment insurances with Nordea.

The capital tax is based on an ascribed income which is the government loan interest plus 1 percentage point. The ascribed income is then taxed at 30%.

This ascribed income increases or decreases to the same extent as the Swedish central bank AKA Riksbanken changes the policy rate. Even if capital tax has increased at the same rate as Riksbanken has raised the policy rate, it is still more advantageous for us to have endowment insurance compared to a securities account.

Apart from the fact that endowment insurance entitles us to reclaim the foreign withholding tax, the ascribed income is still lower for us than the capital tax would be for us in a securities account.

Tomayto, Tomahto

In Sweden, it is the companies that handle the value added tax for the government. That is, the companies add 25% to their goods and services. Each month, companies compile how much VAT they have added on their goods and services and then subtract all the VAT they paid during the same month.

Every month, as an employer, I have to report and pay both employer's fees and withheld income tax on my employees. In connection with this, you also pay the value added tax for the previous month.

I don't know why it's called employers' fee when it's really just another tax.

I have to be honest

There is one tax in Sweden that is low compared to the rest of the world. It is the tax on capital, assuming you have the right savings form.

Endowment insurance is a standard-taxed form of savings. You avoid profit tax and instead pay a low annual standard tax.

We have 98% of all our joint investments in the US market. These holdings are placed in endowment insurances. If you have your holdings in endowment insurance, you also get back the tax you pay abroad.

If, on the other hand, you have your holdings in a share depository, you must pay tax both in, as in our case, the USA, as well as any profit tax in Sweden. The tax refunds we get on our 3 accounts with Nordea significantly exceed the tax payments we make on the 9 accounts we have with Avanza, Nordea and Nordnet.

Available parking spaces might become a future problem

For full transparency, I am politically very far from the Green Party and its politics.

I am fully aware that the world must reduce its need for fossil-free energy and therefore I am a supporter of nuclear power and other planable fossil-free energies. In my opinion, one of the ways to get there is to increase the construction of nuclear power plants and shut down coal power plants. Especially in Sweden, which is not located on a fault zone.

I guess the Green Party and its supporters will be happy to hear that the Swedes have "parked" the car. What they choose NOT to see is that as car ownership decreases, so will tax revenues. Tax revenues that are vital if Sweden is to be a country with extensive welfare and a major donor of aid.

This time it's the car, next time it will be something else. Some politicians completely lack the ability to see the big picture.

Born free, nickeled and dimes to death... but still not safe

With the whole picture of how much tax we pay in Sweden fresh in the mind from yesterday, the irritation is even worse when you are met every day with news about the escalating gang violence.

Even though I am fully aware that it is the previous government's failure and that I have to give the current government a year to try to curb all the violence, it feels incredibly frustrating to pay one of the world's highest taxes without the state being able to manage one of its core activities, to keep its citizens safe and secure.

The previous government's complete unwillingness to crack down on and lock up criminals for so many years leaves the current government facing a monstrous task.

This time of year I always get a little extra grumpy

Our companies have different financial year-ends, which means that there are different dates for when the income declaration must be received by the Tax Agency. Today I completed and submitted the income tax returns for the last two of our companies.

Our private income tax returns have already been submitted. In addition to doing my husband's and son's returns, I also help my parents and my uncle with theirs.

In addition to this income tax, we also pay additional taxes, such as special excise duties plus all goods and services are subject to 25% value added tax. On these additional taxes, such as energy tax, fuel tax, alcohol tax, tobacco tax and more, we also pay value added tax of 25%. Which means in practice that we pay tax on tax.

Still beneficial

Today's transaction history shows that we got the tax refund deposited into our accounts with Nordea yesterday. The same history shows that the tax for our holdings we have in our endowment insurances was collected on the same day. The net surplus was $120.

For each increase that Riksbanken makes of the policy interest rate, the tax on the holdings increases. Despite Riksbanken's recent increases, it is still significantly cheaper for us to have an endowment insurance compared to a brokerage account.

The policy interest rate and the energy price have the same characteristic, they affect pretty much everything.

Sweden's taxes are the fifth highest in the world as a share of GDP

To clarify my agenda, I don't like high taxes, and for transparency, we don't own a car.

On January 1 this year, the petrol tax on gasoline was reduced by $0.8 per liter or $3 per gallon. Petrol tax is a collective term for carbon dioxide tax, energy tax and VAT. Despite the reduction, the petrol tax still makes up 53% of the price per liter.

There are people who use this tax cut as an argument to argue that the government pays for people's use of fuel. To be able to assert that idea, one must have as a basis that all money belongs to the state. It's almost like you should be grateful for the part of your salary that you get to keep.

The fact that the government collects a little less tax does not mean that the government "pays". This country is completely marinated in socialism.

Neither one nor the other feels obvious

I'm all not for wasting electricity unnecessarily. On the other hand, I'm incredibly disappointed with the Social Democrats in Sweden who put power over everything and in cooperation with the Swedish Green Party has shut down half of our nuclear power plants. One of the consequences is that our energy prices are so high that many families will freeze this winter. Another consequence is that the electricity might not be enough if it gets really cold this winter.

Already now they want us not to wash and clean during the weekdays when our industry is running. If it gets really cold this winter, Swedish power grid has announced that they may have to disconnect areas from the electricity grid. Since our current government took office as late as October 18 this year, I cannot put any blame on them. So while I want to load the electricity grid to the max during the most critical time interval, I certainly don't want to pay more tax than I have to.

It should not be the citizens' task to have to do dishes and laundry at night in order for our electricity grid to be sufficient. The people who decided to dismantle an energy source that supplies clean stable electricity during all hours of the day must be held accountable. The tragic thing is that the Social Democrats claim that it was the market that shut down the nuclear power plants, even though documents were leaked showing that there were political decisions that made nuclear power unprofitable.

At the same time, politicians from the Green Party tweet that they are proud to have shut down the nuclear power plants. How anyone can have faith in either of these two parties is beyond me.

System failure part 3

Stated below applies to the country I live in. I read an article from one of the prosecutors in Sweden. He wrote about a real case.

Quote "The police are looking for a person who has been wanted for several months. When visiting his address, it turns out that the man has moved abroad. There, he most likely lives well on his compensation of $900 he receives every month from the employment agency, despite the fact that he is detained in his absence." unquote.

When the state loses control and pays out tax money without control, it will eventually lose the trust of the citizens. That will ultimately lead to the biggest problem of them all: the willingness of honest hardworking taxpayers to pay taxes and contribute to society will cease. 

I almost had a heart attack

I think it is important to surround myself with people who think differently from me for my personal development. I got into a discussion with a municipal politician about tax money. When the person in question seriously said that he saw no difference between tax money and money in a limited company, I could hardly believe my ears.

Despite my desperate attempts to get him to understand the difference between voluntarily buying a service/product versus being forced to buy a service, he couldn't tell the difference. I discovered that there are limits to what views I want in my life in order to evolve…

An annual tradition

Every year at this time you hear all people talk about the same thing, the final tax. It is those who get residual taxes who are annoyed or angry depending on the size of the amount. The opposite is the people who get money back. This group makes me puzzled. It's like they "get" money from the state.

The reality is that it was their money from the beginning that the state borrowed from them for free for a very long time. I am one of those losers who lent money to the state for free.

A company's and country's most important component is the customer

The difference between a company and a country is that the company must provide a product or service. A country must have tax paying citizens. The company's service/product is voluntary while the tax is mandatory.

One of the countries in Scandinavia, Sweden, has the highest income tax in the world. To top it all they also have a very high VAT and various excise taxes on alcohol, tobacco etc. All these taxes contribute to a hugely generous welfare system. Unfortunately, it has emerged that this system is being greatly abused.

The fact that the state has no control over the system causes many taxpaying citizens to leave the country. The state gets into difficulties when the taxpaying citizens wonder what they get for the money.