Local Tax: a Segregation Variable

When my fiancée and I moved to Lidingö, a municipality on the east side of Stockholm, we talked a lot about practical things: how to get to work, where to park and, to my surprise, income tax. She told me that income tax in Sweden is collected at a local level, which means that municipalities with a right-wing government charge lower taxes than their left-wing counterparts.

The Swedish tax office. (image source:  applovin )

The Swedish tax office. (image source: applovin)

An article in SVD, a quality Swedish newspaper, describes an extreme case. A person in Dorotea with an income of 27,500 SEK will receive 2,000 SEK less after taxes than someone in Solna.  These cities are the two extremes, however, for my girlfriend the move from Södermalm to Lidingö, a mere 6 km, meant having a few hundred crowns more to spend every month.

Right-wing governments are usually elected in places with high income households or households that think they have a high income. In Stockholm this seems to have led to some rather rich suburbs close to the city’s centre. These places have predominately expensive housing and are therefore not easily accessible for people with low income. This reinforces a system that creates urban spaces that exclude the poor and stimulate the tax-fearing right-wing parties.

Ever since the Stockholm riots last year the world knows the Swedish capital is not one of the most socio-spatial equal cities in Europe. Tax benefits of course don’t explain the whole segregation process, but it surely is one of the variables that can help explain it.

For more reading on this topic: the increasing segregation in urban Sweden, and the resulting urban-unrest, is described by Bo Malmberg, Eva Andersson and John Östh from Stockholm University, who mostly focus on the ethnic aspect

Written by Sascha Benes. Follow him on Twitter, Linkedin and .