Introduction
The features of tax policies and prerequisites that determine the taxation system of countries are significant economic factors that characterize the financial sectors of states and their stability. The peculiarities of these policies form unique development plans and allow judging the stability of budgets. In order to analyze possible similarities and differences, the tax systems of the two countries of the European Union will be analyzed – Sweden and Ireland. Despite the relative territorial proximity of these states, the indicators of their financial development based on duty fees are distinctive. As basic evaluation criteria, such parameters will be utilized as public opinions, political structure and domestic parties, political institutions, and European Union membership to determine the influence on tax systems in these countries. The tax burden on the economy is more significant in Sweden than in Ireland, and the rules of fiscal laws are more stringent in the Scandinavian country, although its self-regulation is more advanced.
Public Opinions’ Impact on Tax Systems
When comparing the tax systems of the two states under consideration, it is essential to take into account the factor of the citizen recognition of certain laws and norms regulating governing legislations. According to Jagers et al., when carbon taxation policies began to advance in Sweden, population approval rates varied in different years (6). The authors note that according to the national surveys, in the early 2000s, about 19% of Scandinavian citizens supported the idea of ​​these taxes, while in 2012, this indicator was 23% (Jagers et al. 6). In general, for Swedish domestic financial policy, public opinions are an important aspect that can be both a constraint and an incentive to promote specific provisions. The approval of periodic changes in tax legislation proves citizens’ concerns about the pressing issues of social development and confirms the awareness of responsibility.
For the tax system of Ireland, public opinion issues are more acute since, in recent years, European governments have doubts about the objectivity of the Irish fiscal laws. As Simpson argues, the level of public approval was high until the 2008 economic crisis, when outrage over tax rates on profits rose significantly (7). About 60% of local residents supported the idea of ​​introducing a new fiscal stability program in 2012, which included a reassessment of tax conditions and market development (Simpson 7). In general, when comparing basic duty fees in the two countries in question, one can note that in Sweden, the real estate tax is the only mandatory fee. In Ireland, in addition to this fee, social security contributions and capital acquisition are also taken into account (Andersson 80). These outcomes may be explained by different degrees of economic development and periods of membership in the EU. Since Ireland has been its member longer than Sweden, more stringent conditions and requirements apply to the local tax laws. Therefore, regarding the parameter of public opinion, the approval of fiscal practices in the Scandinavian country is higher than in Ireland.
Influence of Political Parties
Policymaking in relation to the Swedish tax system is largely determined by the internal structure of its party system and its impact on fiscal legislation. According to Rasmussen et al., the right-wing movements that came to power in the country in 2006 began to promote a strict tax system for excisable goods, in particular, alcohol (68). The authors note that tax cuts on the sale of this product did not follow, which caused dissatisfaction among a large percentage of the population (Rasmussen et al. 2006). The subsequent increase in tariffs in 2013 and 2014 was the reason for public outrage (Rasmussen et al. 2006). Such a policy proves that socio-democratic freedoms are an important aspect of the civil position in Sweden. Nevertheless, despite the dissatisfaction with some decisions of the right-wing parties, the people of the country support their course, judging by the current distribution of seats in Parliament.
In the history of Ireland during its EU membership, a number of controversial questions have arisen regarding the role of political parties and their impact on the country’s tax policy. In the previous parliamentary elections, the Fine Gal party had a leading position, which proves the state’s liberal mood to change many aspects of current legislation, although this party has been recently in power (Simpson 5). The opponents of the participation of the EU Council in state affairs are concerned about the influence of European political trends on domestic politics and, in particular, the tax system. According to Schmidtke, the main reason may be the tightening of capital acquisition fees and preferential taxation (75). Thus, when comparing the role of political parties in Sweden and Ireland, one can note that in the latter state, reformist sentiments prevail. In the Scandinavian country, conversely, democratic values ​​are promoted due to the greater satisfaction of citizens with the current situation.
Role of Political Institutions in Tax Systems
The freedom of choice and respect for human rights are the crucial components of the Swedish national policy, which is reflected in citizens’ recognition of its current development course. Spohr states that, due to the principles of equality and justice promoted in the state, the current dominant party has sufficient support (263). An open parliamentary election system helps maintain the confidence of electors, although, as the authors notes, “social expenditures and the total tax burden in Sweden are among the highest in the world” (Spohr 263). The status of a constitutional monarchy legitimizes the transfer of powers to the elected body that, in turn, is formed by popular voting. Tax policy requirements are balanced by a high quality of life and such important social achievements as the absence of unemployment and advanced healthcare and education systems (Spohr 263). Therefore, the current political situation explains the peculiarities of Swedish tax legislation.
Irish political institutions are less stable than Swedish ones, which may be explained by the instability of the economic situation and the constant intervention of the EU Council in the fiscal policy of the country. According to Schmidtke, since the end of the 20th century, the Irish corporate tax system has been regularly analyzed and reformed, which, in turn, has led to liberal moods in the state (75). Parliamentary elections are free, and centrist unions are highly recognized among the population due to their desire to establish current financial legislation and provide the country with more freedom in its fiscal policy. As a result, while comparing the Swedish and Irish political institutions, one can argue that elective systems and development courses differ significantly, which is expressed in various right and left movements.
EU Membership as an Important Factor
Sweden’s EU membership has influenced its tax system in some aspects. As Ots et al. note, in 1995, the EU Council demanded that the Swedish government review the fiscal policy of the state (178). As a basic idea, pluralism objectives were promoted, but in the end, the country managed to maintain its internal principles of taxation. Another EU initiative was an attempt to introduce digital monitoring services, which was also perceived by the Swedish government as “one of the main barriers to continued tax convergence” (Ots et al. 178). As a result, the possibilities of maintaining the country’s own currency and promoting domestic tax practices prove the relative independence of Sweden in the context of its EU membership.
When analyzing the EU membership of Ireland, some international conflicts over its tax laws may be noted. Schmidtke notes the attempts of the European government to dominate the local fiscal system and promote specific policies that are contrary to “Irish economic preferences” (75). The desire to increase EU powers in this sector has been disapproved by the Irish government (Schmidtke 75). As a result, great concerns about this pressure and encroachment on national self-determination have led to the strengthening of liberal parties in the state and the country’s desire for self-regulation.
Conclusion
The tax system of Sweden is more stringent in the context of requirements for the population than the Irish one, but the living standards of the Scandinavian country and the satisfaction of its citizens with current legislation are higher. The political situation in Ireland, in particular, the activation of liberal movements, proves the concern of the local authorities about the restrictions imposed by the EU. Sweden, in turn, has managed to maintain relative independence in its financial policy, and the leadership of the right-wing parties is evidence of the country’s fiscal stability.
Works Cited
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Jagers, Sverker C., et al. “The Impact of Compensatory Measures on Public Support for Carbon Taxation: An Experimental Study in Sweden.” Climate Policy, vol. 19, no. 2, 2019, pp. 147-160.
Ots, Mart, et al. “The Shifting Role of Value-Added Tax (VAT) as a Media Policy Tool: A Three-Country Comparison of Political Justifications.” Javnost – The Public, vol. 23, no. 2, 2016, pp. 170-187.
Rasmussen, Anne, et al. “Dynamics of Regulatory Policymaking in Sweden: The role of Media advocacy and Public Opinion.” Scandinavian Political Studies, vol. 41, no. 1, 2018, pp. 49-74.
Schmidtke, Henning. “The Differentiated Politicisation of European Tax Governance.” West European Politics, vol. 39, no. 1, 2016, pp. 64-83.
Simpson, Kathryn. “European Union Crises and Irish Public Opinion: Continuity and Change in Patterns of Support.” Irish Political Studies, 2019, pp. 1-23.
Spohr, Florian. “Explaining Path Dependency and Deviation by Combining Multiple Streams Framework and Historical Institutionalism: A Comparative Analysis of German and Swedish Labor Market Policies.” Journal of Comparative Policy Analysis: Research and Practice, vol. 18, no. 3, 2016, pp. 257-272.