ABSTRACT
Over the past 15–30 years, depending on country, welfare states have experienced a sustained decline in economic growth. Sweden was able to combine the completion of a full-scale welfare state with high growth rates all the way through the 1960s. The Rehn-Meidner (RM) economic-policy model was a major factor behind the growth success. Its promotion of exports helped the economy sustain growth even as gradually rising taxes began taking a toll on domestic demand. The total tax burden on the Swedish economy began accelerating in the latter half of the 1960s and continued to rise through 1980s, when it capped out at 50 percent. Up until the last quarter of the twentieth century, egalitarians did not have to work very hard to defend the welfare state. It seemed to stand on its own merits. Progressive income taxes, a staple of income-redistribution policies, discourage workforce participation by making it prohibitively costly to increase one's hours or, again, climb the corporate ladder.
