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These are the households that are the budget's winners

Those who earn the most get tax relief equivalent to "the entire summer vacation". For a family with medium incomes, the government's proposal is roughly enough for an extra cinema visit per month. And pensioners can be considered the losers, says private economist Américo Fernández at SEB.

» Updated: 20 September 2024, 13:09

» Published: 18 September 2024

These are the households that are the budget's winners
Photo: Anders Humlebo, TT

When the government presents its budget on Thursday, several tax cuts for households have already been announced in advance. This includes a new job tax deduction and lower taxes for pensioners.

Nearly half of the total reform space of 60 billion kronor is expected to go to household wallets, including reduced fuel taxes and abolished flight taxes.

However, there are winners and losers among households.

"A substantial sum"

The budget primarily benefits households with high incomes, according to SEB's private economist Américo Fernández

High-income earners who work are undoubtedly winners in this budget, he says.

They, like low- and middle-income earners, will receive a tax cut through the job tax deduction. In addition, they will also receive an adjustment of the income tax bracket. Those with the highest incomes will also get more in their wallets when the phase-out of the job tax deduction is abolished.

According to SEB's calculations, this means that a household consisting of two high-income earners, where one earns 62,500 kronor per month and the other 125,000 kronor, will receive 3,481 kronor more per month after the turn of the year. This amounts to over 42,000 kronor per year.

It's a substantial sum, the entire summer vacation and a bit more, says Américo Fernández.

High-income earners are also expected to benefit the most from lower taxes on ISK accounts and abolished flight taxes, according to Fernández.

The income tax bracket will be raised to 53,590 at the turn of the year, and the abolished phase-out of the job tax deduction will benefit individuals with monthly salaries between 65,000 and approximately 180,000 kronor per month.

The losers

A family consisting of two middle-income earners with a salary of 38,500 kronor each will instead receive 612 kronor more per month after the turn of the year, equivalent to approximately 7,300 kronor per year.

Say you have two children, then it's enough for a movie ticket each per month, says Américo Fernández.

This group will instead see the biggest difference in their wallets due to the Swedish Central Bank's expected interest rate cuts.

The least affected by the budget will be pensioners.

The pensioner couple can be considered the losers, says Fernández.

Two people with a median pension of 21,600 kronor each per month will receive an additional 226 kronor.

It's not many activities pensioners can do with that. It's not enough for a trip or barely enough to fill the grocery basket.

A new job tax deduction of 11 billion kronor.

Lower taxes for pensioners of 2.5 billion kronor.

Abolished phase-out of the job tax deduction of 4.7 billion kronor.

Raised income tax bracket of 6 billion kronor (taken outside the reform space).

Lower taxes on ISK accounts of 4.4 billion kronor.

Extended temporary additional housing allowance of 412 million kronor.

Lower taxes on fuel of 3.2 billion kronor (for half a year).

Lower flight taxes of 870 million kronor.

Lower taxes on motorhomes of 90 million kronor.

Proposals presented up to and including September 17.

Source: TT, Ministry of Finance.

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By TTThis article has been altered and translated by Sweden Herald

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