Sweden is on everyone's mind these days because Donald Trump raised the issue of their horrid experience with the hoards of violent migrants. It's a teachable lesson that the U.S. open borders crowd should heed. But let's switch gears for a moment and talk about this interesting quirk in Sweden's tax system.
A deposit in a Swedish bank is subject to a negative interest rate -- the depositor has to pay the bank to hold the money. The goal in Sweden's case is to curb deflation. But depositors who want their money to work for them and not the bank have figured out a way to game the system.
Seems that the country's tax code provides that the government will pay interest on tax overpayments. So those who might otherwise put the money in the bank merely give it to the government in the form of a tax payment. That way they earn interest on it. Here's Business Insider in Sweden's government has a bizarre economic problem — it is collecting too much tax:
With interest rates in the country at -0.5%, holding cash in bank accounts and other savings vessels provides little to no return and in many cases actually costs people money.
But thanks to the way Sweden's taxation system is set up, Swedes can earn interest by paying more tax than they need to and leaving it in their taxpayer payment accounts. These accounts pay interest of 0.56%, far in excess of bank interest rates in the country.
Pretty clever work-around. Now if only it were that easy to solve the problem of immigrants unwilling to assimilate.