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Sweden's left-wingers plan tax hikes on the rich

Sweden's left-wing opposition parties --  currently leading in opinion polls -- want to raise benefits while hiking taxes on the rich.

Swedish politicians fishing for votes in London
Sweden's left-wing opposition ahead in poll

Sweden's left-wing opposition parties -- the Social Democrats, Green Party and Left Party -- have more than an eight-percentage-point lead over the centre-right government ahead of September's general election, a poll published Friday showed.

The parties joint shadow budget, presented on Monday, unveiled plans to hike a variety of taxes while increasing expenditure on pensions, unemployment benefit and council housing.

People earning more than 40,000 kronor ($5,500) a month will be hit by higher taxes, the red-green said in its proposal. They will also reintroduce the tax on wealth.

The shadow budget, which was deliberately leaked to the press in the weekend, was met by heavy criticism by the centre-right government. Industry minister Maud Olofsson warned that higher taxes and higher benefits would lead to to higher inflation and higher interest rates - which would hurt families and small businesses.

The opposition parties expect the measures to create about 100,000 new jobs, trainee positions and educational places. At the same time they said that the public spending ceiling would not be tampered with.

But the government parties claimed that the budget proposals rather would threaten jobs and the recovery of the economy.

"They say that they will not increase the taxes for low and middle income earners, but the taxes will be higher for three million employees", said prime minister Fredrik Reinfeldt at a press briefing.

Also the head of Saco, a trade union for academics, slammed the planned tax hikes.

"Sweden already has the highest marginal tax in the world, and a higher tax on income and work risk threatening the new jobs," Anna Ekström told the TT newswire.

In their mock budget, the parties lashed out at Prime Minister Fredrik Reinfeldt's centre-right government for Sweden's unemployment rate of 9.2 percent -- the highest level reached in the Scandinavian country since it underwent a deep economic crisis in the 1990s.

They also want to abolish the tax-rebate for household services like cleaning and babysitting and plan increased taxes on petrol, alcohol and tobacco.

The parties also vowed to spend more on public transport infrastructure, including building a high-speed train network, and said they would increase spending on low-income housing.

Last Updated (Monday, 03 May 2010 15:14)


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