Surprised no one on here mentioned estate taxes - Sweden repealed estate taxes in 2005 [0], and as such Sweden has one of the highest wealth (not income) Ginis in the world [1]. Other notable developed countries in the top of the wealth list are Netherlands (€1.3mil exemption from inheritance tax if planned correctly [2]) and the US (no inheritance tax below $12mil [3]). In essence, you are allowing the top 10% to gobble up all the value from the rest of society, and allowing old money to continue perpetuating itself.
Sweden abolished inheritance taxes because the cost of enforcing the tax was greater than the taxes raised, and was passed by a left-wing coalition. At the time, it was considered a success of social democracy to not need inheritance taxes (and in fact, everyone, including the law, referred to dödsskatten - the death tax).
20 years isn’t ready enough time for wealth to consolidate like that via inheritance alone, and similar countries (like Norway and Germany) are seeing similarly rapid raises in their Gini Indexes for wealth, without chances to their inheritance tax systems. Something is broken in Western economies, but unfortunately, inheritance taxes in Sweden aren’t the problem.
"The question we set out to answer in this study is how the Swedish personal wealth distribution has evolved since 2007. This year, a right-wing party alliance was elected after a long period of Social Democratic rule and among its first reforms was to repeal the wealth tax ... Our main result concerning wealth inequality in Sweden is that it appears to have increased since 2007. The recorded rise in the Gini coefficient and top wealth shares is about ten percent"
Note that the study above only analyzed wealth in Sweden over the time period of 2007 (when the wealth tax was repealed, not 2005 as I erroneously wrote in my earlier comment) and 2012.
Germany and Norway don't share a comparable Wealth Gini (like I said above, it's WEALTH Gini, not Income Gini).
While absolute wealth inequality did grow in both NO and DE since 2008, SE's Wealth Concentration also at a much higher starting position than either NO and SE in 2008
And finally, roughly the same old money families/nobility that existed in Sweden c. 1700 continue to have a roughly similar impact in Sweden c. 2012 from a social mobility standpoint.
Good point. Based on this paper from HHS back in 2000, the Wealth Gini in Sweden in 2000 was around 0.790 [0]. Btw this wealth Gini disparity between the 2000 and 2008 numbers is because the NBER's 2008 model used PPP I believe while HHS and Credit Suisse used nominal.
That said, even in 2000 there was a recognition that there is an intergenerational wealth transfer competent via foundations and families.
And clearly, the big picture takeaway that has been open knowledge in the economics world is that Sweden has consistently had extremely uneven asset ownership - at a level comparable to the United States and Netherlands, two other first world countries dealing with extreme amounts of instability due to asset ownership inequality. And at the end of the day, assets matter more than income.
[0] - https://taxsummaries.pwc.com/sweden/individual/other-taxes
[1] - https://www.credit-suisse.com/media/assets/corporate/docs/ab...
[2] - https://practiceguides.chambers.com/practice-guides/private-...
[3] - https://www.investopedia.com/estate-tax-exemption-2021-defin...