Posted on 02/29/2020 5:25:50 AM PST by karpov
Scandinavian countries are well-known for their broad social safety net and their public funding of services such as universal healthcare, higher education, parental leave, and child and elderly care. High levels of public spending naturally require high levels of taxation. In 2018, Denmark’s tax-to-GDP ratio was at 44.9 percent, Norway’s at 39.0 percent, and Sweden’s at 43.9 percent. This compares to a ratio of 24.3 percent in the United States.
So how do Scandinavian countries raise their tax revenues? A first breakdown shows that consumption taxes and social security contributions—both taxes with a very broad base—raise much of the additional revenue needed to fund their large-scale public programs.
Taxation of Labor Income
In 2018, Denmark (24.5 percent), Norway (20.0 percent), and Sweden (22.4 percent) all raised a high amount of tax revenue as a percent of GDP from individual taxes, almost exclusively through personal income taxes and social security contributions. This compares to 16.0 percent of GDP in individual taxes in the United States.
Tax Wedge
One way to analyze the level of taxation on wage income is to look at the so-called “tax wedge,” which shows the difference between an employer’s cost of an employee and the employee’s net disposable income.
In 2018, the tax wedge for a single worker with no children earning a nation’s average wage was 35.8 percent in Denmark, 35.9 percent in Norway, and 43.0 percent in Sweden. Although Denmark and Norway are below the OECD average of 36.1 percent, their tax wedges—and Sweden’s—are higher than the U.S. tax wedge of 29.6 percent.
Social Security Contributions
Social security contributions are levied on wages to fund specific programs and confer an entitlement to receive a (contingent) future social benefit. Social security contributions are largely flat taxes and tend to be capped.
(Excerpt) Read more at taxfoundation.org ...
But their health care is free.......
Any such analysis should also include the average effect of state and local taxes, RE taxes, and sales (or VAT) taxes.
The real measure of how socialistic a society is can (IMHO) more easily be estimated from the amount of economic activity that is accounted for by government expenditures at all levels.
I don’t know the situation in Scandinavia, but here, if you take Federal, State, and Local expenditures into account, you’re probably north of 40%; and if you add in private expenditures that are mandated by law, it might be closer to 50%.
I also note that before Obama, the US federal share of the economy was 18% to 20% for many years; Obama boosted it approximately 5%, and it shows no signs of lessening. Bernie would add on another 20 or 25%.
Between my state federal and healthcare total it is within the realm do these socialist level of taxation.
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If you add the self employment tax or employee FICA to the fed rate for most you are over 30% (15+15) + state tax. That does not include many local earned income taxes of another 1 to 3%.
Then add gas taxes, auto taxes, sales taxes, real estate taxes, occupational taxes, per capita taxes....
Mine is within or above it. Where’s my free stuff?
In Denmark an upper middle class earner pays over 50% equiv. fed tax.
Car purchase tax is 100%.
There’s VAT on many things.
Healthcare is ‘free’ but many workers have supplemental work-provided plans (still a perk there) and also personal plans — to get the care and med’s they want and need in a reasonable timeframe.
Our media lies to us about them (”They’re the happiest country!”) and their media lies about us (”They’re gun-crazy, bible-thumping yahoos!”).
No their health care is not free. Patient still have to pay, although it’s a small amount. And don’t forget the high tax rate covers the healthcare so they’re paying anyway.
The other thing that seems obvious yet unmentionable is that these tiny countries are racially homogenous (i.e. white) and that even the dumb people speak two foreign languages fluently. In other words, by and large these are much more civilized places than the United States. They can “DO” socialism, because they are in a much more real sense than we are, a “society.”
In the US we are naturally going to be more worried that other races and classes are benefiting from a system we are paying for. In Denmark, that’s not going to happen (although the influx of Arab refugees is creating a backlash in many of these places they are still a relatively small % of the population).
There’s also the issue of competent administration. I lived in Germany where there is an established bureaucracy. It’s annoyingly cohesive, but it is also highly competent. You have to get the correct stamps on your documents in the correct order, but as a result, they really can find your records quickly and accurately.
In the US the client facing aspects of a public health care system would be administered by people who are not as highly skilled, and the users themselves (all of us) would not be as willing to jump through the necessary hoops as the Europeans are. We are different than Scandinavia, different than Europe.
He added: “One of the reasons Swedish equality is so advanced is that the motive behind it is not just socialism, but an active dislike of people who are supposed to be better. You have to cut people down. Everyone must be equal. Make someone who's exceptional feel unexceptional.”
https://www.nytimes.com/1976/03/16/archives/ingmar-bergmans-taxes-swedes-brood-over-case-ingmar-bergmans-taxes.html
Our dumb people can't even speak their native language fluently. :)
The battle is local. Conservatives need to worry less about the largely theatrical exploits of Barr and Durham and, yes, Trump, and start focusing on systematically removing collectivists from city councils and local school boards and electing county sheriffs with strong Constitutional views.
Love or hate Joe Arpaio, there has been a marked downturn in the quality of street life in Maricopa County, Arizona since his departure. Insufficient policing has had a much bigger effect on the lives of the average voter than, say, the election of Kyrsten Sinema to the Senate.
I got plenty of that in California government schools in the 1970's - it took me years to overcome the mindset that it was unfair to outperform others. :)
This is a good analysis.
They missed the high gasoline taxes, tobacco, and liquor taxes.
It’s coming. Until supplies run out.
Getting producers to make more will be problematic.
They all run a budget surplus too.
I was being sarcastic.....:>)
They missed the high gasoline taxes, tobacco, and liquor taxes.
Yes, and in Vancouver Canada (free medical)the price per liter of gas (1/4 gallon) is $1.57.
As well as provincial sales tax, they pay an additional 5%. federal
GST (general sales tax) on most goods. 12% total.
“Mine is within or above it. Where’s my free stuff?”
No free stuff...that’s eaten up by government/politician corruption.
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