Income and Tax Transparency in Norway and Sweden

Income and Tax Transparency in Norway and Sweden

Different cultures have different ideas about privacy. The practice of revealing everybody’s salaries in Norway and Sweden dates back to the 18th century.

Norway has been making such details open to the public since 1863.

Would you be happy to have your tax return displayed for everyone to see? Want to know what your boss earns? Or your future husband? Each year Sweden and Norway publish everyone’s income tax returns so everybody in the country can inspect them.

What do the very rich really pay in taxes? Just some keystrokes on your computer’s keybpatd and the information is there. The person whose returns you request will know it was you, but that is all. This rule, introduced in 2014, resulted in the fact that the number of requests fell considerably. However, workers can see what their colleagues earn and neighbors can snoop on how much the people next door make – all legally and online.

Income and Tax Transparency in Norway and Sweden
Progressivity of Scandinavian and US incomew taxes

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In the grand tradition of the “Jantelov”, where no-one is better than anyone else, Sweden and Norway publish everyone’s income and tax details, every year. So it’s possible to find out the average gap between women and men. However, only total income and total tax paid is revealed.

On a date every year in October, just after midnight, Norwegian citizens’ annual tax returns are posted online – and the country’s newspapers leap to produce top ten lists of the country’s highest earners, the incomes and taxes paid by the political and cultural elites, celebrities and sportspeople.

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Sweden’s ‘tax calendars’are published in stages, starting with ordinary taxpayers, then high income earners from company bosses to celebrities. The Swedish gender pay gap has become smaller since the system was introduced, 6 per cent only.
For most foreigners, how much someone earns is not information that belongs in the public space. Money should be private.

Income and Tax Transparency in Norway and Sweden
Tax declaration in Sweden

In Sweden, businesses with 25 or more employees have to establish an equality action plan. And companies with big pay gaps face fines if they fail to take steps to close them.

According to domestic tax authorities, few Norwegians and Swedes have the same hangups as most foreign people about having their incomes disclosed.  The list seems to symbolize the best of Nordic openness.

Norwegians living and working abroad say the rules mean there is more honesty about salaries back home than in the country they live in. “Isn’t this how a social democracy ought to work, with openness, transparency and social equality as ideals?” they ask. Tax transparency may also contribute to a flatter and more equal pay structure in the country.

The spirit of transparency, when it comes to money at least, doesn’t translate into every culture. What some see as an honest commitment to fairness is for others, an invasion of personal privacy, or as a Norwegian tabloid described as “tax porn”.

Income and Tax Transparency in Norway and Sweden, written by Tor Kjolberg