Wealthy Swedes were among the first to warn that the pandemic would bring crippling social and economic costs. When Covid-19 struck, industrialist Jacob Wallenberg staunchly opposed draconian lockdowns, fearing devastating unemployment and social unrest.
That chimed with the Swedish government’s relatively hands-off approach to social distancing. The economy and civil liberties were protected, though ultimately at the cost of a higher death toll than neighbouring countries, drawing anger from voters and the royal family. The country’s image of being a “moral superpower” was broken.
Today the economy is racing back to pre-pandemic levels, but a new socioeconomic challenge is brewing: inequality.
Rich Swedes are now richer, with financial markets juiced by central bank liquidity and a vaccine-led rebound. Five of the country’s top billionaires added a combined $18 billion to their total wealth over the past year, according to data compiled by Bloomberg.
A property boom is helping mint new millionaires, with prime Stockholm real-estate prices up 7.7 per cent year-on-year, according to Knight Frank. (That’s better than San Francisco and London.) A rich seam of tech talent and soaring valuations for start-ups like Klarna Bank are stoking excitement among bankers.
At the same time, Sweden’s services sector has shed jobs and its immigrant population has struggled to find work. Inequality as measured by household disposable income is higher than it was in the 1980s, according to the central bank.
The stark contrast is leading to a now-familiar refrain: a possible wealth tax. Finance Minister Magdalena Andersson, keenly aware of the damage to Sweden’s brand as a strongly egalitarian market with a cradle-to-grave welfare state, is dangling the idea of a levy on millionaires.
Sweden has historically been a more equal place than most of the rich world, but there’s new anxiety after Covid-19. It’s rare to see such a widening gap between those who own property and shares and those who don’t, according to Bloomberg Intelligence analyst Johanna Jeansson.
In this case, however, a broad wealth tax just isn’t the best way to address burgeoning inequality, no matter how politically attractive the theory.
For Swedes, the disappointing reality of wealth taxes is still within living memory.
In this case, however, a broad wealth tax just isn't the best way to address burgeoning inequality, no matter how politically attractive the theory
The country scrapped a long-running wealth tax in the mid-2000s (along with a host of other levies on capital) that encouraged capital flight and discouraged investment.
At its peak, aggregate revenue from the measures never topped 0.4 per cent of gross domestic product in the post-war period, according to a 2014 Nordic Tax Journal paper. On the eve of its abolition, it accounted for a measly 0.16 per cent. This disappointment, mirrored elsewhere, is why such taxes on the wealthy are more debated than deployed.
A one-off Covid solidarity tax as seen in Argentina might seem more effective – some $2.4bn has been collected by levying as much as 5.25 per cent of assets’ value from the Latin American country’s richest people. But such a measure would need a very deft political touch to convince citizens the move is a one-off and to keep investor confidence intact amid the pandemic.
It would also fail to fundamentally address Sweden’s longer-term inequality challenge: Knight Frank forecasts that by 2025 the number of Swedes with more than $30 million of net wealth will rise by 59 per cent.
Sweden's government should instead take a more surgical approach and target a root cause of the wealth gap, namely inflated asset prices. Property, for example, enjoys low taxes that are capped. That incentivises investors to keep on buying and prices out those that don't or can't. The Organisation for Economic Co-operation and Development's recent recommendations rightly advocate a shift away from generous mortgage tax treatment and low taxation on real estate.
The country’s lack of an inheritance tax deserves a rethink. Without one, accumulated asset wealth will be easily passed on to Sweden’s many family scions just as the pandemic has thrown up more obstacles to less fortunate young people such as educational inequality.
In a country where the ranks of the asset rich are growing, even these moves would take political courage. Somewhat dispiritingly, Ms Andersson seems to have ruled out the idea of including property in a future levy on wealth. Aspiring Wallenbergs may face a reckoning one day, but not yet.
Team Angel Wolf Beach Blast takes place every Wednesday between 4:30pm and 5:30pm
COMPANY%20PROFILE
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At a glance - Zayed Sustainability Prize 2020
Launched: 2008
Categories: Health, energy, water, food, global high schools
Prize: Dh2.2 million (Dh360,000 for global high schools category)
Winners’ announcement: Monday, January 13
Impact in numbers
335 million people positively impacted by projects
430,000 jobs created
10 million people given access to clean and affordable drinking water
50 million homes powered by renewable energy
6.5 billion litres of water saved
26 million school children given solar lighting
JAPANESE GRAND PRIX INFO
Schedule (All times UAE)
First practice: Friday, 5-6.30am
Second practice: Friday, 9-10.30am
Third practice: Saturday, 7-8am
Qualifying: Saturday, 10-11am
Race: Sunday, 9am-midday
Race venue: Suzuka International Racing Course
Circuit Length: 5.807km
Number of Laps: 53
Watch live: beIN Sports HD
FOOTBALL TEST
Team X 1 Team Y 0
Scorers
Red card
Man of the Match
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Read more from Mina Al-Oraibi
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
HAEMOGLOBIN DISORDERS EXPLAINED
Thalassaemia is part of a family of genetic conditions affecting the blood known as haemoglobin disorders.
Haemoglobin is a substance in the red blood cells that carries oxygen and a lack of it triggers anemia, leaving patients very weak, short of breath and pale.
The most severe type of the condition is typically inherited when both parents are carriers. Those patients often require regular blood transfusions - about 450 of the UAE's 2,000 thalassaemia patients - though frequent transfusions can lead to too much iron in the body and heart and liver problems.
The condition mainly affects people of Mediterranean, South Asian, South-East Asian and Middle Eastern origin. Saudi Arabia recorded 45,892 cases of carriers between 2004 and 2014.
A World Health Organisation study estimated that globally there are at least 950,000 'new carrier couples' every year and annually there are 1.33 million at-risk pregnancies.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
MATCH SCHEDULE
Uefa Champions League semi-final, first leg
Tuesday, April 24 (10.45pm)
Liverpool v Roma
Wednesday, April 25
Bayern Munich v Real Madrid (10.45pm)
Europa League semi-final, first leg
Thursday, April 26
Arsenal v Atletico Madrid (11.05pm)
Marseille v Salzburg (11.05pm)
Expert advice
“Join in with a group like Cycle Safe Dubai or TrainYAS, where you’ll meet like-minded people and always have support on hand.”
Stewart Howison, co-founder of Cycle Safe Dubai and owner of Revolution Cycles
“When you sweat a lot, you lose a lot of salt and other electrolytes from your body. If your electrolytes drop enough, you will be at risk of cramping. To prevent salt deficiency, simply add an electrolyte mix to your water.”
Cornelia Gloor, head of RAK Hospital’s Rehabilitation and Physiotherapy Centre
“Don’t make the mistake of thinking you can ride as fast or as far during the summer as you do in cooler weather. The heat will make you expend more energy to maintain a speed that might normally be comfortable, so pace yourself when riding during the hotter parts of the day.”
Chandrashekar Nandi, physiotherapist at Burjeel Hospital in Dubai
Abu Dhabi GP weekend schedule
Friday
First practice, 1pm
Second practice, 5pm
Saturday
Final practice, 2pm
Qualifying, 5pm
Sunday
Etihad Airways Abu Dhabi Grand Prix (55 laps), 5.10pm
The Details
Article 15
Produced by: Carnival Cinemas, Zee Studios
Directed by: Anubhav Sinha
Starring: Ayushmann Khurrana, Kumud Mishra, Manoj Pahwa, Sayani Gupta, Zeeshan Ayyub
Our rating: 4/5
Leaderboard
63 - Mike Lorenzo-Vera (FRA)
64 - Rory McIlroy (NIR)
66 - Jon Rahm (ESP)
67 - Tom Lewis (ENG), Tommy Fleetwood (ENG)
68 - Rafael Cabrera-Bello (ESP), Marcus Kinhult (SWE)
69 - Justin Rose (ENG), Thomas Detry (BEL), Francesco Molinari (ITA), Danny Willett (ENG), Li Haotong (CHN), Matthias Schwab (AUT)
If you go
- The nearest international airport to the start of the Chuysky Trakt is in Novosibirsk. Emirates (www.emirates.com) offer codeshare flights with S7 Airlines (www.s7.ru) via Moscow for US$5,300 (Dh19,467) return including taxes. Cheaper flights are available on Flydubai and Air Astana or Aeroflot combination, flying via Astana in Kazakhstan or Moscow. Economy class tickets are available for US$650 (Dh2,400).
- The Double Tree by Hilton in Novosibirsk ( 7 383 2230100,) has double rooms from US$60 (Dh220). You can rent cabins at camp grounds or rooms in guesthouses in the towns for around US$25 (Dh90).
- The transport Minibuses run along the Chuysky Trakt but if you want to stop for sightseeing, hire a taxi from Gorno-Altaisk for about US$100 (Dh360) a day. Take a Russian phrasebook or download a translation app. Tour companies such as Altair-Tour ( 7 383 2125115 ) offer hiking and adventure packages.
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
The%20Letter%20Writer
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How Sputnik V works
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
Fixtures
50-over match
UAE v Lancashire, starts at 10am
Champion County match
MCC v Surrey, four-day match, starting on Sunday, March 24, play starts at 10am
Both matches are at ICC Academy, Dubai Sports City. Admission is free.
UAE currency: the story behind the money in your pockets
KILLING OF QASSEM SULEIMANI
What went into the film
25 visual effects (VFX) studios
2,150 VFX shots in a film with 2,500 shots
1,000 VFX artists
3,000 technicians
10 Concept artists, 25 3D designers
New sound technology, named 4D SRL
