Sweden has gone almost two decades without a wealth tax and more than twenty years without taxing inheritances and donations. A situation that may seem surprising for a country traditionally associated with high taxes and a broad welfare state, but which responds to a series of reforms with which successive governments sought to reduce capital flight, facilitate the continuity of family businesses, and eliminate taxes considered difficult to apply.
Now the discussion has returned in the midst of an electoral campaign. The growth of large fortunes and the need to finance healthcare, education, infrastructure, and the climate transition have led the Green Party (Miljöpartiet) and the Left Party (Vänsterpartiet) to advocate for a new tax specifically aimed at billionaires. However, this is not a position shared by the entire center-left bloc: the Social Democrat Magdalena Andersson has ruled out recovering a general wealth tax.
Sweden eliminated inheritances in 2005 and wealth in 2007
The first major change came with inheritances. The Swedish Parliament approved in December 2004 the complete elimination of inheritance and donation taxes, which ceased to apply from the beginning of 2005. The reform facilitated, among other things, generational transitions in small and medium family businesses.
The decision was not exclusively a reform of the right. It occurred under a Social Democratic government and culminated a process that had already led to the prior elimination of the inheritance tax between spouses. One of the reasons put forward at that time was that the rise in housing values could force an heir to face a high tax bill simply for receiving the family home.
The wealth tax survived two more years. It was the center-right government of Fredrik Reinfeldt that decided to eliminate it effective January 1, 2007. The Swedish Tax Agency confirms that since that date Sweden stopped applying this tax.
The argument at the time: to prevent money from leaving Sweden
The government justified that decision primarily due to its effects on investment. It argued that the tax harmed the availability of capital for businesses and could push owners of large fortunes to move their assets outside of Sweden to reduce their tax bill.
The Executive also pointed out that the existence of multiple exceptions and different valuation rules allowed people with more resources to better organize their assets to reduce the tax, while certain homeowners ended up affected by the rise in the fiscal values of their properties. At that time, the Tax Agency had estimated that there could be assets of around 500 billion crowns placed outside the country to avoid taxes, a figure used by the Government to defend the reform.
The disappearance of the tax meant stopping the collection of about 6.9 billion crowns annually, according to the parliamentary calculations of the time. The measure was partially financed by restricting deductions for private retirement savings.
The turn: the great fortunes have grown strongly
Almost twenty years later, those who demand to tax wealth again argue that the context is different. The discussion no longer revolves solely around how much a tax collects, but about how much those who accumulate enormous fortunes pay proportionally compared to those who earn most of their income from working.
The figures on the exact number of billionaires depend on the methodology used. UBS counted 31 dollar billionaires residing or linked to Sweden in 2025, with a combined wealth close to 131.5 billion dollars, compared to 28 the previous year. Oxfam uses a different methodology and calculates that the 46 richest Swedes collectively own more wealth than around 80% of the country's population, about eight million people.
These figures should be interpreted with some caution because Sweden no longer maintains a complete tax register of wealth since the tax disappeared in 2007. This makes it difficult to know exactly how many people would exceed certain thresholds and how much a potential new tax figure could collect. The Green Party itself acknowledges this limitation.
Greens and Left want a “tax on billionaires”
The Green Party has made the issue one of its fiscal proposals for this election. Its proposal is to introduce a tax aimed at individuals with assets exceeding 1 billion crowns, around 94 million euros at the current exchange rate, avoiding the tax reaching much more common assets such as homes, small businesses, or family savings.
The training holds that a measure of this type could raise up to 50,000 million crowns annually, resources that it proposes to allocate to health, education, infrastructure, and climate transition. That calculation comes from estimates based on parliamentary research work, but its amount is disputed and SVT has warned that there is a high uncertainty about the actual revenue that would be obtained.
The Left Party also advocates substantially increasing the taxation of large fortunes and considers it a priority that billionaires and people with very high assets contribute more to the maintenance of the welfare state.
The idea approaches the international debate on establishing a minimum effective taxation for the ultra-rich: not necessarily recovering exactly the wealth tax that existed before 2007, but designing a figure that guarantees that owners of enormous amounts of assets pay a minimum percentage in taxes on their economic capacity.
Social Democrats say no to recovering the wealth tax
The proposal precisely divides the bloc that could replace the government of Ulf Kristersson. The youth social democrats, SSU, have asked Magdalena Andersson to support a progressive tax on large fortunes, but the social democrat leader has rejected incorporating that measure into her program.
“It is not something we propose,” Andersson has pointed out. The Social Democrats do want to increase revenue on certain assets and high incomes, but through other means: they have proposed a tax on banking, higher taxation on large ISK investment accounts, and tax changes affecting those who receive high incomes.
The difference is not minor. A wealth tax annually taxes the value of the assets that a person owns, regardless of whether they have sold them. A higher tax on dividends, capital gains, or investment accounts, on the other hand, taxes the income or returns related to that capital.
The rich do pay taxes on their capital in Sweden
The disappearance of the wealth tax does not mean that large Swedish fortunes are completely free from taxation. Sweden maintains a general tax of 30% on capital income, although there are different rules depending on the type of investment and how business ownership is structured.
One of the most widespread vehicles is the Investment Savings Account (ISK), an investment account whose tax system does not individually tax each capital gain obtained, but rather calculates a theoretical return on the deposited assets. For 2026, the effective rate is 1.065% on the taxable capital, after a threshold of 300,000 crowns.
Therefore, the discussion does not face a system in which billionaires do not pay taxes with another in which they would pay them. The debate is whether the current burden correctly reflects the enormous growth of certain assets and whether unrealized fortunes —for example, stocks that multiply in value but that their owner does not sell— should be taxed in some way.
The fear that billionaires will leave returns to the debate
The opposing arguments are very similar to those that led to the elimination of the tax two decades ago. Entrepreneurs and center-right parties warn that a new tax may push business owners and large investors to move to countries with more favorable taxation, ultimately reducing the investment and revenue that was intended to be increased.
The debate has intensified after Martin Lorentzon, co-founder of Spotify, warned that he could leave Sweden if a wealth tax is reinstated.
The experience of neighboring Norway is also very present. There, a wealth tax continues to exist, and in recent years several owners of large fortunes have moved their residence, mainly to Switzerland. For critics of the Swedish proposal, it is a demonstration of the risk of taxing highly mobile assets; for its defenders, it rather demonstrates the need to better design taxes and increase international cooperation to limit tax competition between countries.
An election that also decides who should pay for the welfare state
The fiscal discussion comes to an election in which the center-left opposition starts with a slight advantage over Ulf Kristersson's bloc, although the differences are narrow. The left parties agree on demanding more resources for the welfare state, but maintain significant disagreements on how to achieve them.
Greens and Left consider that a substantial part of the bill should fall on those who have accumulated greater wealth. The social democrats share the goal of increasing fiscal progressivity, but do not want to return to the old wealth tax. The right-wing bloc, for its part, defends an orientation based on tax cuts, economic growth, and investment incentives.
Sweden thus returns to a discussion it believed was closed in 2007. The country eliminated its wealth tax precisely because it considered that it caused capital flight, encouraged tax planning, and harmed investment. Two decades later, the concentration of wealth has led part of the political system to wonder if keeping it eliminated is still the best solution.
The unknown is not simply whether Sweden will return to “taxing the rich.” The real debate consists of finding a formula that manages to tax the fortunes of hundreds or billions more without causing that wealth, its owners, or their investments to move outside the country. And, unlike twenty years ago, there is not even a common response within the Swedish left yet.