If the Germans don’t want lower taxes because the state prefers to invest or to reduce debt, or so the polls suggest, the Danes do not want taxes to be reduced because they are proud of their providential state.
Normally in a country where citizens pay some of the highest taxes in the world, an administration that promises to reduce them would give an election blow. But Denmark is not an ordinary state and such a proposal was hit by strong opposition from the society which would reduce the center-right government support for the Prime Minister Lars Loekke Rasmussen, writes Bloomberg.
The government’s plan involves reducing the top rate of income tax by 5% and increase the amount that you can earn in a year without paying taxes in order to increase by 7% the average salaries of those who earn the least. Those with annual gross salaries of over 1 million crowns ($151,000) would still pay a higher rate, 58.3%. The main idea behind the amendment is currently being discussed in the parliament is to make employment more attractive, thus about 40,000 people will not receive benefits anymore.
It is a good enough plan for a country facing labor shortages and rising pressure on costly social safety net from an aging population. In addition to tax relief, long-term unemployed will benefit from a premium 30,000 crowns (4,500 dollars) for accepting a job if they received benefits for more than a year.
According to Rune Stubager, professor of political science at Aarhus University, the problem that Danes have with the government’s plan is that it requires them to choose between keeping their beloved social state and lower taxes.
As locals love to remember, Denmark regularly occupy higher positions in the international charts both in wellbeing and happiness chapter. Perhaps it is no coincidence that the same word used for taxes is boyfriend: skat.