Sweden - proposed tax breaks to fix stuff

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Forums › Finance and wealth management › Sweden - proposed tax breaks to fix stuff

Fred99

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#203177 20-Sep-2016 17:03

https://www.theguardian.com/world/2016/sep/19/waste-not-want-not-sweden-tax-breaks-repairs

Interesting idea.

Counter opinion:

"Ending is better than mending. The more stitches, the less riches."

(Aldous Huxley - "Brave New World")

zespri

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#1636703 20-Sep-2016 17:09

Aldous Huxley most certainly did not mean that it's his opinion. Context is everything.

ubergeeknz

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Vocus

#1636707 20-Sep-2016 17:15

Sounds good to me. I'm a big fan of repairing over replacing, where practical.

Fred99

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#1636712 20-Sep-2016 17:34

zespri:

Aldous Huxley most certainly did not mean that it's his opinion. Context is everything.

Edited my origianl post to attribute that to Aldous Huxley - "Brave New World"

richms

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#1636741 20-Sep-2016 18:30

I can see every mall based repair shop using this as an avoidance thing tho.

Richard rich.ms

wasabi2k

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#1636792 20-Sep-2016 19:33

Cool idea - would be interested to see the costs of implementing a tax system with multiple rates like that - would suspect it is non-trivial.

Incentivising using tax breaks on GST/VAT is an interesting lever - how much of a leap is it to increasing it to discourage behaviour.

oxnsox

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#1636816 20-Sep-2016 20:16

Like the concept but the justification needs a little work:

snip- '...He hopes the tax break on appliances will spur the creation of a new home-repairs service industry, providing much-needed jobs for new immigrants who lack formal education.'

blakamin

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#1636817 20-Sep-2016 20:16

Someone would have to start actually designing things to be fixed... And what about the cost of parts and convincing manufacturers to stock them?

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Kyanar

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#1638588 22-Sep-2016 09:44

This is Sweden, home of IKEA - king of "disposable" (because its just so cheap) appliances and the like. I wouldn't imagine this will work very well.

jarledb

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#1638607 22-Sep-2016 10:10

Norway already have different GST levels. "Luxury goods" (most anything) is 25%, food is 15%. Transport etc. is 10%. Makes it fun when you buy food at a take out place. If you decide to eat there, you pay 25% (because you are at a "restaurant" = luxury), and 15% if you take it with you (because, then its food).

I am sure the swedes are smart enough to pull off a similar dual GST system ;)

Oh, maybe I should have Googled it before I started writing. Sweden already have 25%/12%/6% GST depending on what kind of goods/services it is you are buying/selling.

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MikeAqua

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#1638636 22-Sep-2016 10:41

Complexity in taxation is vulnerable to abuse.

The great thing about GST is that it's universally applicable at the same rate.

The minute you have different categories you have BS at the boundaries. In the Sweden example, by including meals in a plane ticket perhaps I could pay only 10% GST for them, where as if I buy the same meal in a restaurant it's 25%.

Mike

Sidestep

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#1638659 22-Sep-2016 10:58

blakamin:

Someone would have to start actually designing things to be fixed... And what about the cost of parts and convincing manufacturers to stock them?

Well a lot of new cheap consumer-grade stuff is throw-away. However most good quality, commercial/industrial grade stuff is still designed to be repaired.

The issue's that the cost of repair often make it uneconomic- you pay someone $120/hr to do it, a manufacturer's inflated price for the part (that .20c O-ring, placed in a plastic bag with a sticker on it becomes a $15 OEM part)

I like the idea. Don't know how real-world practical it is. Maybe those thrifty Swedes can pull it off.

My spare-time hobby's buying non-running, good quality gear cheaply on trademe.
I usually fix a couple things a week - mainly to give away, sometimes to hoard in my ever growing machinery collection.

A friend and I fix up a couple of cars a year to sell at 'cost' to local people who need them.
Seems such a waste to throw away all that invested energy and design/engineering/manufacturing effort

.. and here's a $2000 pressure washer I got for $20, because a $10 bearing and $5 of O-rings needed replacing.. a 20 minute repair. Gave it to a friend who was going to buy some rappy thing from Mitre-10

gzt

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#1639863 24-Sep-2016 14:22

This is the real motivator behind the new policy:

"The incentives are part of a shift in government focus from reducing carbon emissions produced domestically to reducing emissions tied to goods produced elsewhere."

At some point it is a sensible shift in focus if they have the rest on a downward trend. It will be interesting to see how much they can achieve. There will be some minor issues around what is repair and what is maintenance.

Technical obsolescence and therefore recyclability is a fairly big problem. Phones, computers, 5 years for many of the low end items and they are just not useful for the majority of consumers. Sweden may already have a 'return to manufacturer for recycling' policy for those end of life items. If Europe is already doing that maybe we can learn from that and see where it is working well.

Addressing the manufacturing processes also will happen in time. It would be interesting to look at plastics, I'm guessing some have a lower energy requirement than others and there may be room to achieve more in that area.