Pomperipossa in Monismania
In the form of a fairy tale, the famous Swedish author of books for children Astrid Lindgren described how she, a Sole Proprietor was forced to pay a tax of 102% of her income.
What follows is a free translation of the famous publication, which was published in the Swedish evening tabloid Expressen on March 3, 1976. (For the purpose of comparison, one 1976 krona is roughly equivalent to one 2015 U.S. Dollar)
I am going to tell you a fairy tale. It is of a woman; let us call her Pomperipossa, which is a good name to call someone in fairy tales. She lived in a land that we call Monismania, for we have to name it something.
Pomperipossa loved her county, its forests, mountains, lakes, and green groves, and not only that, she also loved the people living there. And even the wise men that ruled the country, oh, she thought they were so wise, and because of that she voted faithfully for them every time there was an election to decide who should rule Monismania. Those that had decided everything for more than 40 years had made such a good community, she thought. No one in the land needed to be poor, everyone got a piece of the welfare cake, and Pomperipossa was full of joy that she had been able to contribute a good portion of the cake as they baked it and spread the wealth around. Oh the sweet aroma from a well baked cake!
There was something in Monismania called marginal tax rates. It meant that the more money you earned, more of that money would go to the head tax master, so he could make a bigger welfare cake. But he would not take more than 80 to 83% from anybody; no he wanted to be reasonable. “Dear Pomperipossa,” he said, “you can keep around 17 to 20% for yourself and use whichever way you want.” And Pomperipossa was filled with joy and kept skipping down the road of life. There were though many unsatisfied people in the land who beat their shields and wailed about “the oppressive taxes” as they used to call it. Pomperipossa never did that, nobody in all of Monismania had ever heard even a sigh from her about her contributions to the welfare cake. On the contrary, she thought it was altogether good and fair so she had set her mind to keep giving her vote to the wise men so they could keep on doing the best for her dear Monismania.
This Pomperipossa, she wrote books for children. She did it for the pure joy and pleasure of doing so, just to have a little fun here in her earthly life. She thought to herself: “Who knows, other children may be almost as childish as I am, maybe they too will read about these my marvelous imaginations?” It turned out that this they really wanted. Not only the children of Monismania but also in lands far, far away, both in the east and the west. People could hardly believe it, but there sat innocent little children in all corners of the world, and they read and read over-abundantly, without end! This led to Pomperipossa’s great misfortune, indeed, the more they read, the more money kept flowing to poor Pomperipossa. “Poor”, why poor? Wait till you hear this!
On a beautiful day the wise men that ruled Monismania gathered together at a castle we may call Haga, because that is what it was called. Well, it wasn’t really a castle, more like a mansion that the King had used in previous centuries as a summer place so he could take walks in the beautiful gardens and listen to music played in the long northern summer evenings, all while the birds sang and the flowers flowered. Times had changed and the King could no longer afford the place, so he gave it to the wise men to take care of. The wise men liked to feel like the King used to, so they loved to gather there. But it was still winter, so they stayed inside. It must have been on a coffee break (the hallowed tradition of that country that nobody could think ill of, for there are both cinnamon buns and cookies and tarts served with real strong coffee), so they didn’t have the time to check even once after they made the list of new rules. They decided on strange new rules that made life puzzling to say the least, not only for Pomperipossa, but also for many other Monismaniacs. But of that Pomperipossa had no idea at first. Not until a good friend suddenly asked her:
“Are you aware of the fact that your marginal tax rate this year is 102%?”
“You are talking nonsense”, Pomperipossa said. “That many percent does not exist!”
For she was not particularly familiar with Higher Mathematics.
Oh yes, she was told, in Monismania there were percents without end, and if one put together the income taxes and the social employer fees that Pomperipossa had to pay, since she was a small business owner, it came to 102%, so Pomperipossa could say what she wanted! Poor, poor Pomperipossa, she just sat there and wrote early and often and did not even know that she was a small business owner. She really should have been proud: “Ah, I am a Small Business Owner, who could have thought?” But after she had counted the numbers for a while she found out slowly but surely that to be a Small Business Owner in Monismania was sure death warmed over.
Thus she thought and thus she counted:
These terrible little children that are sitting in all the nooks and crannies of the world, reading together money for me, how much money will their disastrous eagerness to read bring me this year? Best case maybe only a million. Worst case two million. (Since the money came dribbling in from the four corners of the world, she never knew before it happened how much money she would get. Big fat checks could mercilessly attack her when she least suspected it.) Let us think the worst, Pomperipossa thought. Two million!
Then the taxes will be like this:
Of the first 150 000 the rascals are reading together for you, you get to keep, so they say, 42 000 kronor. The rest of the 150 000 = 108 000 is going to the
Welfare cake…… 108 000
100% of what is more than that… 1 850 000
And then the additional 2 %, that you in your simple-mindedness did not think could be…… 37 000
Total for the Welfare cake…… 1 995 000
Left for Pomperipossa…… 5 000
Having come thus far she said to herself: “My dear old woman, you have never been good at the third R! There are decimal points and all those things, surely you have counted wrong, surely there must be 50 000 left for you.” She started over, but the result did not change one bit – if you made two million, you got to keep 5000 – to live on!
Pomperipossa was worried, it can’t be denied, so she said to herself:”Not that you are a particularly big eater, but yet! 5 000 kronor – when the salted herring, that yesteryear was poor man’s food is priced sky high, and all other prices have followed.” Now she got really scared, and she jumped out screaming to herald friends and acquaintances her distress. But they did not want to believe her. “5 000 kronor, don’t you try that on me!” When she finally managed to convince them they said helplessly: “But you must have a lot of deductions?” What deductions? Pomperipossa wondered. Deductions are money you have paid out. You can’t eat them like salted herrings.
Without finding any consolation, Pomperipossa went home and sat down in a dark corner to think and to brood. How will I get this day my daily bread? she thought. Maybe there are some poorhouses left, so I can beg a meal here and there? Maybe if I seek the wise men and knock on their doors, then maybe, just maybe they will show mercy and give me a bowl of soup every now and then, they can take a little of the 1 995 000 kronor, it could even be quite a full bodied soup, maybe they will even put a little piece of sausage in it?
But not even the thought of sausage helped. Pomperipossa’s countenance grew darker and darker. She now understood that it was something dirty and shameful to write books, since it was punished so severely. How is it in other lands? she pondered. Well, she knew something about that, for she had just met a kind little Russian, and he was an author. His books were selling off the shelves, and he paid 13% in taxes. (Pomperipossa told him about her 102%, and then he fell of his chair. But as soon as he got off the floor he took a beeline home to tell everybody about this in his land.) Pomperipossa had also heard that in Ireland they cherished their authors very much, so much so that they didn’t take any tax at all from the income from their books. But that must be a lie, Pomperipossa thought.
There was a lot of thinking done as she was sitting in her cranny. There were many other self-employed people in Monismania, not just herself. There were, for instance, doctors and dentists – and even lawyers in Monismania, and they had perhaps quickly figured out that the more you worked, the less you made, and had therefore decided to totally ignore the acute cholecystitis and impacted third molars and divorces and real estate transactions of all the Monismaniacs, at least one, two, three, four, or five days a week. This must be the reason that the monismaniacs were now in a real pickle when they got gallstones or aching wisdom teeth or needed a lawyer to buy an old house with a lot of debt, which was the best way, so Pomperipossa had heard, if one wanted to lower the 102 percent down to almost nothing. Even the chief tax master had done that, and he was glad he did.
Having come thus far in her thoughts, Pomperipossa sighed. Why, oh why did she not have any debt at all, sitting in an apartment all her life? Oh, my dear parents, why did you teach me that debt is evil, something to be abhorred? See what this has led to, here I am sitting totally debt free, and all I have are these cursed incomes that are ruining me!
More and more Pomperipossa pondered in her corner. She remembered how well Joseph in Egypt had understood that during the seven fat years one must prepare for the seven lean years that were to follow. Pomperipossa, too, had really been this wise. She had bought retirement insurance, quite a lot of it she had done. It is reasonable, she had thought to herself, that I should take care of myself in my old age. When my pen falls out of my shaking hand, and I can write no more, then I do not want to be a burden to society. This way I will continue to have my daily bread. Of course I will have to pay taxes on the income from my retirement insurance, but that will be then, not now! For retirement insurance premiums were to be deductible. The wise men that ruled Monismania had quite reasonably ruled many years ago that all premiums up to a certain amount of the retirement insurance premiums should be deductible. Taxes were to be paid when the premiums were paid out. Many people had done so. There were, for instance, artists in the entertainment industry that knew their popularity would be short-lived. Here today, gone tomorrow, they thought, it is prudent to take out retirement insurance while the going is good, so I still have something when they no longer want to hear my shouts of joy and wailings of misfortune. If I don’t do it, I will have to take out the beggar’s cup.
For the longest time the wise men of Monismania said this was wise and prudent. But little by little they changed their minds and thought otherwise. He that was the top decider among the wise men suddenly sat straight up and said that the hairs on his head stood on end when he saw all the deductions the people made from their retirement insurance premiums; Shame, shame, retirement insurance is ugly and shameful! Why is that? Pomperipossa thought, and why are his hairs standing on end without end? How can something the wise men themselves have decided, and that until now has been right and proper, suddenly be comparable to tax evasion? For so it was presented in the wise men’s own newspaper. There were long lists published of how much money people made, and the horrendous deductions they took. But there was a shortage of space, so there was never room to list how much the people paid in taxes, 102% and things like that was never mentioned. No, but the deductions were thoroughly explained! Aha, the enraged readers thought, those filthy rich parasites, what outsized deductions they make for their champagne and caviar and riotous living!
At last the so called public opinion was so well prepared, that when the wise men put forth their bill in the house where they decided those things, there was nobody left who would dare to take up the fight and defend the deductaibility of retirement insurance premiums, for public opinion can-not be challenged, there was an election coming – and soon, no less. So a law was enacted with retroactive effect, which Pomperipossa understood was a first in all the history of Monismania.
In other words, insurance contracts that Pomperipossa quite lawfully had signed more than ten years ago, they were now torn apart in three daring leaps. And she was forced to go to her insurance company and say: “I am sorry, I cannot complete our agreement, for I can no longer pay!” But the insurance company people were just then in complete shock and despair and, to put it mildly, angry at the wise men for making this decision without first checking with the people that actually knew something about what consequences this would have, they just stared at Pomperipossa with bloodshot eyes and asked her to get lost; before the whole house fell down.
There was more thinking Pomperipossa had time for in her dark nook. In the good old days, when the marginal tax rate was at most 83%, there was something called “periodic support”. This meant that, if you – like Pomperipossa in the good old days – had a little bit more money than she needed for bare subsistence, and had some less fortunate relatives or other people you really cared for, you could give them periodic support. These support payments were deductible, and just because of that, it was possible to give them. The welfare cake would still get its reasonable portion, since the one getting the support must pay taxes on it. But one beautiful day the hairs on all the wise men began standing on end again. Perhaps they had heard of a Monismanic son with adequate income giving his poor mom 25 000 in yearly support, so that she could live above poverty. Shame, shame, this is not right, the wise men thought. Support is not the duty of her son, it takes a village. This way we can assure that everyone is equally poor – or not poor if we could just get hold of some more revenue enhancements. We must put a stop to it! And this they did.
What has gone into them? Pomperipossa pondered in her dark corner. Are these really the wise men I so highly esteemed and admired? What are they trying to accomplish – a society as narrow-minded and impossible as possible? Oh, my pure blossoming Social Democracy of my youth, what have they done to thee, she thought (she started to become a little pathetic), how much longer shall your pure name be trod underfoot to protect a bureaucratic, unrighteous guardian state drunk with power? She had been led to believe that in a democratic society everybody’s rights were to be protected. People should not be punished and persecuted just because they by honest means – with or without their will –happened to make money. But this was, as far as Pomperipossa could understand, what was happening now. With pure destitution grinning square in her face, it was hard for her to see it any other way. What is this, she thought, a remarkable sour, jealous stench reeking all over Monismania? And why is no one speaking up loudly: “This cannot stand, for then all industriousness in our beloved country will end and there will be no small business people left in our land to tax.”
And Pomperipossa took out and read over and over again a small poem, newly penned by one of the most highly regarded poets in all of Monismania:
Creating something of value causes envy. The community cries: no payola!
In the banal bickering of bureaucrats you must take part.
And help Comrade Castro carry out war in Angola,
Or face therapy nursing home style – you old fart,
At this time Pomperipossa felt a great need for therapy herself and that right now. For it was so hard and painful to be forced to doubt the society she up to now had seen as the best in the whole world.
The shadows grew longer around her, and once again she thought of the five thousand she would have to live on, if she really happened to make two million. Alas, poor me, she thought to herself, why could I not be just a welfare recipient without any trace of another income, how rich I would be compared to now! But then it hit her like a flash of lightning from a clear sky – woman, you must be able to go on welfare! Oh, blessed thought! With renewed hope she sat down to write to the chief tax master asking how much she would get. There, she said to herself, I knew there must a solution if I just thought long and hard enough! Is this, after all, not the best society in the world? Or…? Or is it not? This question is best left open, she thought.
So the welfare-supported Pomperipossa lived happily ever after. And she never, ever wrote any books again.
PS. Just before the deadline for publication Pomperipossa received a more exact calculation from the wise men’s department of revenue, that clearly explained that she would not get any 5 000 kronor to squander in riotous living. No, they said, if you make two million, our part is, hallelujah: Kronor 2 002 000 kronor. Then Pomperipossa decided to go out on the highways and byways to beg for enough money to buy an ever so small crowbar. Shake in your boots, wise men, she thought, increase the nightly security around your treasure chests! 5 000 I must have one way or another! If you can steal without scruples, so can I!
Text: Astrid Lindgren, March 1976 Translation, (with some paraphrasing and embellishments to better the understanding)© Lennart Bilén, 2009.