Scandinavians don't mind paying taxes, and neither do Tea Partiers

Image: Social democratic activists (source)


The Swedish really love paying taxes:

[A 2012] survey shows that 80 percent of the population thinks the municipal and regional governments should increase the quality of childcare, while only 15 percent think that taxes should be lowered instead. Furthermore, 93 percent believe that the local governments should increase care for the elderly, while only 5 percent favor lowering taxes. Similarly, 91 percent prefer increasing the quality of healthcare rather than lowering taxes.

Since I don't speak a Scandinavian language, more data like these have proven difficult for me to locate. But it's clear that Scandinavians really like paying taxes, and the Swedish even think very highly of their tax collection agency:

Skatteverket, the Swedish Tax Agency, is popular. In fact, it is really popular, with poll after poll showing that it is trusted and respected. A 2013 survey concluded that the Tax Agency has the second-best reputation – beaten only by the Swedish Consumer Agency – of 26 major Swedish public bodies, scoring highly for its customer service and for ‘contributing positively to society’.

‘You don’t have to like taxes, but most people seem confident that things are done fairly’, says Toivo Sjörén of market research institute TNS Sifo, which conducted the poll (link in Swedish).

By contrast its American equivalent, the Internal Revenue Service, is one of the least popular federal agencies in the United States, according to a 2013 poll.

So how has the Swedish Tax Agency managed to pull off what seems like the ultimate confidence trick – taking people’s money but leaving most of them grateful and smiling?

This feat is pulled off very simply. The Guardian wrote a neat story that interviewed the typical Sven on the street about taxes and the welfare system. See if you notice the pattern:

But for most Swedes paying high taxes is a benefit, not a problem. 'I am very happy to pay high taxes because I know I am getting value for the money later on,' says Valentina Valestany, a 39-year-old legal adviser. She is especially pleased with the school her daughters Westa, 15, and Anastasia, 13, attend. 'Lunches are free, it was no problem getting in. My daughters receive a very good education and they have great teachers.'

Nicholas Aylott, a 38-year-old British lecturer, is working as a political scientist at Stockholm's Södertörn University College.

'If you start talking to someone in Britain, you can be fairly sure that they will end up saying that taxes are too high. In Sweden, you can't do the same,' he says. 'Most people trust the state to manage taxes well. There's a broad, deep faith that the money going into the welfare state will be employed usefully.'

...'The kindergarten that our son Alex attends costs just 1,200 kronor (£97) a month. I have relatives in London who pay 10 times that,' he says. 'It was no problem finding Alex a place as there are plenty of local kindergartens where we live. In Sweden we are able to raise a young child and hold two demanding jobs at the same time. In Britain, it wouldn't be as easy.'

This parallels exactly the experiences of social democracy in the United States. Fortunately, great data exist (in English) on the popularity of America's social democratic programs, Medicare and Social Security. Like Sweden's welfare state, these programs enjoy broad popularity across all society, even among conservatives. American conservatives may claim to distrust government programs, but most conservative Republicans adore Medicare and Social Security.

So, the typical conservative Republican and the typical Swede share a love of social democracy. How can this be?

There are basically two forces at play, and the impact of both working in conjunction is greater than the sum of their effects working individually. For much more on this topic, this page considers this idea from the perspective of a single policy initiative. Below, we consider this idea from a more macro- or systems-level perspective.

Services are of very high quality
Social welfare services in the social democracies are of such high quality that better services can scarcely be obtained in the private market. I wrote here:

Health insurance and health care in the United States is of remarkably low quality ("...another 126,000 [American patients] die [each year] from their doctor's failure to observe evidence-based protocols for just four common conditions: hypertension, heart attacks, pneumonia, and colorectal cancer."). No one ever goes bankrupt from medical bills in a social democracy; yet in 2007, 62% of all personal bankruptcies in the United States were due to unpayable medical bills. Amazingly, 78% of those individuals medical bill-related bankruptcies had insurance at the onset of illness. Obamacare will make this much better, but not nearly as good as the social democracies; out of pocket maximums, when eventually implemented, will still be over $6,000. Child care services in the American private market are so low quality that they are frequently unsanitary and physically dangerous, despite being prohibitively expensive (see below). Even the top tier of the American welfare system delivers child care that is of much lower quality than that available to all families for at very low out of pocket cost in social democracies.

In other words, the private market-based social welfare system of the United States offers far inferior services to the government-based social welfare system in the social democracies. Similarly, without government sponsorship, at most 11% of workers in the United States are offered paid parental leave voluntarily through their employer. But:

Among American companies that do offer parental and family leave, it is quite stingy--a mean of 7 weeks to mothers and 3 weeks to fathers, compared to a year or more for both parents in the social democracies.

Because services are such high quality--better than equivalent services available in the private market--beneficiaries are (unsurprisingly) generally enthusiastic supporters of the welfare state. Most beneficiaries--no matter how rich or conservative--are thus happy to pay high taxes because, as Valentina said above, "I know I am getting value for the money."

Everyone is a beneficiary
The second crucial factor is universal eligibility. If only certain people were eligible for government welfare services, those left out would likely want to dismantle the welfare state--which is the general situation in the United States. But social democratic policies distinguish themselves from other types of welfare programs with universal eligibility. There are no exceptions; the richest 1% has an equal right to the same government-provided social welfare services as the poorest 1%.

The strengths of this model are obvious when compared to the American neoliberal social welfare model, in which eligibility is not universal, but based on income. Only the poor are eligible for most American social welfare programs, like Medicaid, Pell Grants for university tuition, or the Child Care and Development Fund. It sounds reasonable to offer benefits only to the disadvantaged, but in practice this results in an extremely unpopular welfare state because the rich and middle class are taxed to pay for services only the poor are eligible for.* The typical American, therefore, has little reason to support most of the American welfare state, because they don't benefit personally from it.

Because of their unpopularity, welfare programs that only the poor are eligible for are under constant attack from budget hawks and morality scolds, and accepting these services is heavily stigmatized. Paradoxically, then, a universal social welfare program is better for the poor than a social welfare program only the poor are eligible for.

Medicare and Social Security do not follow the neoliberal American social welfare model. They are universal social democratic programs, essentially indistinguishable from their Scandinavian counterparts. Millionaires and paupers alike pay taxes to support the same Medicare program; millionaires and paupers alike are eligible for the same Medicare benefits once they turn 65 years old, and--aside from undocumented immigrants--there are no exceptions.**

The interplay of quality and universality
It's not difficult to see why Social Security and Medicare are so popular in the United States while the rest of the American welfare state is so abysmally unpopular. Both Social Security and Medicare offer high quality benefits to everyone. Everyone benefits personally from these programs, and so they are immensely popular.

Returning to the original question, taxes and government are so popular in social democracies like Sweden because all social welfare programs are high quality and universal. In other words, in Scandinavia, all social welfare programs are structured like Social Security and Medicare, so all social welfare programs are as popular as Social Security and Medicare.

Is there some greedy self-interest involved here? Absolutely. The typical American family does not receive benefits from the Child Care and Development Fund (CCDF), the American government program that provides(?) child care benefits to poor children. So, the typical American isn't happy about paying taxes to support the CCDF. Would Valentina (the Swedish woman interviewed in the above blockquote) support paying taxes to fund the Swedish child care system if her daughters Westa and Anastasia were never eligible? Perhaps, but maybe not--and therein lies the strength of social democracy. When programs are effective and universal, even the most selfish person benefits from funding these programs fully. Social Security and Medicare thus are not popular by accident; they're popular because of their effective, universal design (again, much more here). When the Scandinavian social democracies offer a large range of high quality universal social welfare benefits (as listed in the chart on this page: health, disability, unemployment, and survivors insurance; retirement, education through university, long term care, and child care; and parental, family, and sick leave) and spend tax dollars extremely efficiently, it's no wonder most Scandinavians love paying their taxes.

It's also worth noting that--to a great extent--services are high quality because they are universal. When 100% of voters have a vested interest in maintaining high quality benefits, the political system responds accordingly. By contrast, neoliberal programs that are only for the poor are usually of low quality because the political system neither notices nor cares if a small minority of the voting population is adversely affected.

Conclusion
The popularity of a social welfare program is determined by its design, and this isn't theoretical; over and over, we see that universal programs are immensely popular and have the ability to win the affections of even the most staunch conservatives. This American Life did an interesting segment about how universal pre-kindergarten was accidentally instituted in Oklahoma in 1998; at the end, they point out that even in conservative Oklahoma, the program is so extraordinarily popular that it is essentially untouchable by fiscal hawks in the state legislature looking for budget items to cut--even at the height of the Great Recession (no, this does not result in budget deficits). When services are effective and universal, they benefit everyone and thus become very popular. Politicians don't cut programs that are popular. The strengths are obvious and we should remake our entire welfare state according to this model.




*Universal eligibility is one of the reasons why tax expenditures are so popular (actually, universal isn't a terribly accurate description since these programs disproportionately benefit the rich and are often unavailable to the poor).

*Actually, Social Security only benefits the bottom 99% (section titled "Designed by the wealthy, for the wealthy), so it is a consensus of the American ruling class that it needs to be cut:

A 1% consensus occurs when the American ruling class--the richest 1%--reaches an agreement that stands in direct contention with the views of the bottom 99%. Social Security cuts are a 1% consensus; the Republican position is well-known, and President Obama's commitment to chained CPI, a Social Security cut worth $200 billion dollars (and widespread, though far from universal, Democratic acquiescence), makes this a bipartisan consensus (the only reason entitlement cuts haven't passed is because Republicans don't want Obama to be seen as a moderate). But, incredibly, just 10% of Americans believe Social Security should be cut and just 15% think Medicare should be cut. 55% believe that keeping Social Security and Medicare funded at current levels is more important than reducing the budget deficit.  In this way, the bipartisan consensus on entitlements is opposite the consensus of the 99%, making it a 1% consensus.

The hypocrisy of the 1% consensus on entitlement cuts (and the "journalism" that gladly trumpets these views) is best summarized in this must-read piece by Ezra Klein.