PublicationBook chapter

Digitalization and the Challenges to Finance Public Welfare: The Case of Sweden

Abstract

The chapter analyzes how digitalization and globalization challenge states’ ability to tax income and thereby finance public welfare. As work, consumption, and value creation increasingly take place without geographical presence, the link between tax bases and national jurisdictions weakens. This applies both to multinational firms and to individuals with greater opportunities for remote work.

With a focus on Sweden, the chapter discusses how a tax system characterized by high taxes on labor, lower taxation of capital, and a decentralized welfare model may be particularly vulnerable. It highlights the need for adjustments to the tax system in order to maintain legitimacy, efficiency, and the financing of the welfare state in a digital economy.

Hansson, Å. (2026). Digitalization and the Challenges to Finance Public Welfare: The Case of Sweden. In: Hansson, Å., Wernberg, J. (eds) Taxation in the Digital Era. Palgrave Macmillan, Cham.

Details

Author: Åsa Hansson
Publication year: 2025
Published in: Taxation in the Digital Era. Palgrave Macmillan, Cham.

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This open access edited volume discusses the impact of digitalization on taxation, using the Swedish welfare state model as a lens through which to examine the disruptive effect of new technologies on traditional tax models. Taking a multidisciplinary approach, it integrates perspectives from economics, law, audit, and public policy to shed light on contemporary challenges in taxation.

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