You might recall how during the 2016 presidential season, Bernie Sanders lauded Denmark as a model for how the economic system in America should be changed, asserting that the U.S. could learn from the way the Danes have “gone a long way to ending the enormous anxieties that comes with economic insecurity.”
Illustrating how misguided Sanders is and was, Denmark’s government, turning away from its leftist ways, has proposed a broad range of tax cuts that encourage the populace to work.
On Tuesday, Prime Minister Lars Lokke Rasmussen’s government announced it wants to cut Denmark’s tax burden by 3.7 billion, with the cuts phased in through 2025. The government will “monitor” the corporate tax rate as well.
Finance Minister Kristian Jensen stated, “With this proposal, we’re tackling a number of concrete challenges. We’re increasing the gains associated with working, we’re making it more attractive to work more and we’re ensuring that it’s more worthwhile to save up toward retirement.”
Denmark’s jobless rate is now only 3.5%. Bloomberg reports that Jensen believes encouraging more people to work generates more revenue via sources such as value-added tax. He stated, “There’s still room for growth in public spending, and room to prioritize, as this government does, welfare for Danes. He dismissed critics, asserting they were propounding a “simplification” of economic principles. He stated bluntly, “This is not a zero-sum game” between taxes and welfare.
Denmark’s tax burden relative to gross domestic product is the highest in the world, estimated at roughly 47% in 2015, but the Finance Ministry said Tuesday that figure should drop to 44%.
Jensen commented, “It’s important for the economy and it’s to the highest degree a boon for hardworking Danes, who will be able to keep more of their earnings.”
The government has already cut registration fees for cars from 180% to 150%, and now plans to reduce that percentage even further, to 100%, in order to encourage the purchase of more cars.
Even the left-wing Huffington Post admitted in 2016 that Sanders’ “romanticized” version of Denmark wasn’t accurate:
In fact, as Otto Brøns-Petersen of Denmark’s Center for Political Studies recently explained, it got rich under a taxation and spending regime not that different from that of the big bad United States. Danish tax levels only took off starting in the mid-1960s–and the country’s process of catching up to US wealth levels soon after came to a halt. In other words, Denmark became rich first, and only then ratcheted up its tax rates.