In anticipation of a new government to find a competent minister for housing affairs in Rosenbad – a fruitless project – Riksbank and Finansinspektionen have taken over the housing policy.
Riksbank wants to cancel the deduction of interest rates so that households can stop lending. Finansinspektionen has introduced the upper limits for borrowing, the upper debt limits, two depreciation requirements, and for households receiving lower debt.
The overall effect is that the accommodation has increased and the construction is further reduced.
The increased debt is a reflection of the fact that households get bigger assets through the purchase of apartments. The balance sheet has two sides. For a long time I thought that the management of Riksbank and Finansinspektionen could read the balance sheet. Now I've got rid of these illusions.
Interest rates were previously wrongly constructed because they did not take into account inflation. It was common until 1991 that the interest rate was 12 percent and inflation 10. Ten percentage points corresponding to inflation became the lender's fee for the real value of the loan. These 10 percentage points served as depreciation of the real value of the loan. This depreciation was deducted from 70% of marginal tax. But now inflation has disappeared. The deduction was made against 30% of capital tax.
Suppose all interest deductions are canceled. This breaks down tax incentives in business and cuts down the lines of small businesses. Bankruptcy, unemployment. But what does it have on "social justice" that left-wingers want?
Suppose that deductions are deducted only for housing loans. Then the door opens for large tax arbitration, or the use of differences in tax rates. Anyone who has a housing loan and a company moves home loans to a company in order to maintain a deduction. Even the Swedish Financial Supervisory Authority can not prevent such arbitration – this would require extreme regulation of every loan in the entire economy.
I do not need the right to deduct the rich, but they have money. Instead, the deduction gives even chance to people without newly established users in the closet to gain access to the capital. So, the reform of equality.
When loans were repaid, interest expense disappeared, and with them were rejected. Then, deductions are converted into net taxes, on a home, on actions, etc. Thus, interest deductions are not subsidies without calculating interest expenses.
But explain to the Minister of Finance, who can.
Nils-Erik Sandberg is a former leading writer at DN and a publisher of economic and philosophical topics.