Why Is Denmark So Rich Despite Huge Taxes?
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- Опубликовано: 20 сен 2024
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My political science professor in Denmark, told us that it is a common misconception that Denmark has the highest taxes. But we do have the most transparent tax in the world, so it looks like we pay the most. But most other countries have many, many more obligatory expenses that we don't.
Americans and insurance comes to mind - all of the taxes with none of the benefits.
Exactly Denmark is incredibly transparent and less bureaucratic this makes it look bad if you only look at a given percentage but if you go through like he did, the picture can very quickly be very different.
Lower tax means lower pay!
Ive seen a video few years ago, a couple moved to Denmark from US, and they actually had more money to themself when calculating everything in.
oh we are plenty bureaucratic. maybe not as much as some. but plenty still@@mikni4069
As someone who has lived in Denmark and also Spain and Portugal, a major difference seems to be accountability and willingness to take responsibility for your actions. Perhaps due to their fascist history, people on the Iberian peninsula tend to come up with excuses and shy away from responsibility. It seems worse to criticize antisocial behaviour than to actually do antisocial things. People feel entitled to litter, not recycle, park wherever, drive like crazy, etc etc. And they will not accept public criticism of their selfish actions. Their loyalty is to themselves, their family, possibly a few friends, and that's it. There is also a defeatist mentality especially in Portugal that stands in the way of progress. In Denmark, on the other hand, the majority wants to see the country succeed, the community improve, the system to be working. Antisocial behaviour is not accepted and corrupt cheaters are never seen as "clever", just egotistical. Danes trust each other, and I learned long ago not to trust anyone I don't know in Portugal. Without trust, civility and public shaming of selfishness, I don't see Spain or any other country getting anywhere close to Denmark's level of success and high standard of living.
Its a cultural thing. Latin influence
Bo Palle-What a great observation! I am a retired Social Worker so you were speaking my language. It's too bad about Portugal because geographically, it is in a great place to be a player in shipping and all sorts of maritime pursuits-I would think. Plus they have the Azores that could really be turned into a profit maker it seems. In San Diego, California where I live, the Tuna fishing industry was always dominated by the Portuguese and they sure made money until of course big business came in and the Tuna were over-fished. I grew up in Central California which has a HUGE Portuguese community of Ranchers and most of them came from the Azores. It's too bad they had to leave their homes to make a decent living.
As Portuguese I have to disagree with the "litter" comment, in both Viana do Castelo and Braga I observed two extremely clean cities, I was actually surprised at the level of cleanliness in my last two visits, I have noticed some remarkable improvements in the recycling department as well. As for the defeatist mentality, you are spot on, my family has accepted defeat when it comes salaries or so it seems. They are envious of even Spain but claim the politicians are corrupt and nothing will ever change, the Portuguese believe they are the victims of a huge conspiracy, it´s like the term "democratic responsibility" doesn´t exist. At times it feels like they have been brainwashed to just accept things as they are.
Another note, I live in Denmark and have a low income salary but due to the yearly fixed "personal deduction/personlig fradrag" here I actually paid more taxes in Portugal than I do in Denmark. I paid 36% in Portugal and am currently paying 34% in Denmark (personlig fradrag fratrukket).
As a Pole living for a long time in Italy, unfortunately I notice many similarities here in Italy too, especially if you visit the south of the country
You are quite correct. This is a fundamental cultural difference between northern and southern Europe.
I used to work as a tax attorney in Denmark. It is very difficult to compare taxation between counties, as OECD doesn't factor in benefits received from the state, such as child support and many other. The 55% taxation is only technically true for the marginal tax rate and isn't the actual rate you pay (think tax brackets). If you include the benefits many are eligible to receive from the state, the actual tax rate is much lower.
I thought so to.
Also not forgetting top quality education for free of charge.
To be fair, at the end of the day it doesnt really matter what country you live in. You will end up paying roughly the same amount of your salary in taxes. Exactly how those taxes are being paid changes from country to country. Im Norwegian, but live in Cambodia, a 3rd world country with "no income tax", weeee.
But you would be surprised how many times a year I have to pay SOMEone for SOMEthing, often it is in the form of corruption or "tea money", but that is just how cops and civil servants in this country gets paid.
Same if you move from Denmark og Norway to the US. Yeah, a lot less taxes on income and some other things, but you have to pay for health insurance and some other things we as scandinavians would think of as absurd - reason is the same. The government has X costs, they need Y income. In the case of the US, you dont have to pay taxes for your neighbors health issues, so the gvt dont have to worry about that cost.
But for you, it doesnt really matter if your money goes to the gvt or some insurance and/or health company. In fact, I would say I prefer the gvt getting my money. They will at least in theory pretend to use some of the money to my benefit, a private company doesnt have to pretend to be my friend.
@@alexdaland why do Europeans think people in America have to pay for health insurance? If you work full time in America your employer must pay for you health insurance. Also low income families have government insurance called Medicaid.
Of course it is too marginal rate. This is true in every country that has a progressive tax system. However, in Scandinavian countries the top marginal rate start with relatively low salaries so it end up like a flat tax.
"Personlig fradrag" ... is never mentioned in any of these videos. It makes a huge difference for people with low incomes and the tax rate isn´t de facto the nominal value like in f.ex. Spain or Portugal. Worked in Portugal for over a year and paid more in taxes than I currently do in Denmark, after the "personal deduction" my tax rate is actually 34% in Denmark. Most countries do not have a personal deduction value.
I dont like to owe money, and i dont lend money, so i dont participate in your deduction party.
@@andersandersen6295 "The personal deduction" is a fixed amount all Danes discount every single month, nothing to do with lending/owing money.
Same in Norway, personlig fradrag 🇩🇰🇳🇴
It’s actually the most important information the video didn’t divulge. It sounds a lot but not really, although my tax rate is at 39%. And Denmark also has “Top Skat”, a Tax rate for those individuals who have a higher income bracket. Due to our tax deductions, in the end, we actually pay not so much income taxes as people all over the world expect. But the thing is, Denmark has 25% VAT, we pay a lot of taxes for everything, so that’s where the money came from.😅
@@richellelou8229 A lot of countries have a high VAT rate, 23% standard in Portugal with exceptions for some food products. I benefit A LOT from the personal deduction and it´s weird that no one on RUclips EVER mentions that. Very few countries have a fixed value on that.
Denmark is a very economically and politically stable country, which attracts capital and long-term investments. We have a string of pearls of companies which continue to be Danish, as they are owned by Danish foundations. Defensive industrial products: pharma, food and energy technology lead to continuous growth in exports.
Don't forget about LEGO.
Denmark is generally not attracting foreing capital. This is only true for the largest publicliy traded companines.
Most succesful danish startups are leaving the country.
Current stability is based on the success of a few global corporations.
But unless they have machines doing all the work they tend to move their production out of Denmark, because you only get half value in terms of pay as the other half is tax. Even Royal Copenhagen is produced in Thailand these days. the 200 year old workshops in Copenhagen has been redeveloped. Some more simple parts of Lego are still cast in Billund with other more labor intensive pieces and components being made outside the country. Skandia in Randers has long build its last train, DAB and Aabenraa karosseri has long build their last busses. even Heljan model trains are build in the far east.
Denmark is as post industrialized and dependent as you can get. If we were hit with 5% the level of sanctions imposed on Russia our system would collapse, meaning that our politicians cant really make anything that would upset the foreign elites as everything here is imported.
@@Sohave But living in a small country and within a globalized economy is something you cannot change. Almost every developed country is in your same position and has the same problem. You will never bee independent politically from external actors, but as long as you keep your country stable I don't see what else can you do differently.
@@redoberon So small countries should not desire to carve their own path and should be contend with being ruled by others? Say that to Switzerland, Slovakia and Hungary. Globalization is not the defacto system for the remainder of human civilization, it will meet its demise sooner than you expect. Even the very pro Globalist WEF is talking about the concept of "Deglobalization."
Great video explaining the high taxes in Denmark, and why it works. But it does not really explain why people here do not try to escape the high tax rates.
Personally I am in the highest income tax bracket in Denmark. So I have most of my income in companies I control to keep my tax here at the low 22 percent company tax rate, and my company taxes are higher than my personal taxes despite the lower tax rates. I could easily move my companies to countries with lower taxes. If I really wanted to I could pay almost nothing in taxes here in Denmark, and a lot less in total taxes. But I do not want to do this, and that demands an explanation.
The reason I earn so much is because of free education. My education is the reason for my high income, and I got it for free. It was not only for free, but at the higher levels I was actually paid to get an education, so I would not have to work and could focus on studying. Without that I would never have been where I am today.
Today I see this continuing for new generations. New generations getting great educations, ending up being able to earn a lot and pay a lot in taxes. I am proud that my tax contributions help making this possible.
I don't know if this makes a big difference for, but I'd imagine free healthcare for workers also makes a big difference, as sick / weak workers would produce less one'd imagine. Though that may just be limited view as someone who's viewing the system from a different angle.
Also worth remembering is that, every worker you have to employ, has gotten a free education.
Unfortunately the new muddled government plans to cut back those education benefits to less than needed to complete educations, essentially taking bad policies from the 1980s to a self-destructive extreme. This in turn will cause long term damage to those long term societal benefits.
Similarly, spending on the poor is grossly hampered by runaway enforcement of restrictions placed on the poor at various times in the past. Fir example, poor people living near the border with Germany were recently bureaucratically punished for trying to collect their government payouts abroad if they shopped for food across the border while otherwise remaining in the country. That particular injustice was shut down as being against the inner market regulations, but many other such injustices permeate the systems. Even the tax breaks for companies are being mismanaged by bureaucrats retroactively applying unreasonable interpretations of laws about required documentation.
education is not free though.. we pay for it via taxes..
Every college student in Denmark has to either work or get money from their relatives or take on debt to get by. You do get "paid" to study, but you can't focus on studying because you need to work to avoid drowning in debt. Particularly now that food expenses have increased 50% over the last 1,5 years - me a danish college student.
A quite important, but mostly overlooked, fact when talking about the financial growth of Denmark also has to do with how much less bureaucracy there is in danish private companies. Most danish (and other Scandinavian) companies are run with a flat organizational structure. I remember reading an article about this which I, unfortunately, could not find again and link. The article stated (as I remember it) that from the lowest in the hierarchy employee, until an employee that was able to make major decisions, there are only 4 steps up on average in danish companies, in comparison, German companies averages around 20 steps. :)
Denmark is a very flat society, may be even a country without classes, there is a historical reason for that. It was back when the king abolished, what was called "stavnsbåndet" (a type of serfdom), he actually took the ability to raise an army under his jurisdiction as well, and gave increased to the people. In that way the nobility was kind of powerless, when democracy then came, it was a peaceful transition, with the king still being recognized in a constitutional monarchy. The flatter social structure of the society, I do think is a major contributor to a more informal way of getting things done, it is more about what is being said, than who is saying it, culturally it is probably hard to replicate in other nations.
@@1985rbaek Danmark er bare… Fladt… !! 😂😂😂
Could be something about the STOU "chain of command". It stands for "Strategisk, Taktisk, Operativ, Udførende", or something along the lines of "Strategic level, Tactical level, Operative level, and Executive level". Basically, there should only be 4 layers of command, with the manager/CEO at the strategic level at the top, and the working base employee at the Executive level. The Strategic level looks at the 10 year plan for the company, while the Executive level handles the working hours.
@@gbm1610 Det er så roerne bedre kan gro ;)
But Denmark still runs old diesel trains on the mainlines, has waiting times for mental health treatment on up to 1.5 years, is investing 7 billion dollars in new highways, and has the european negative record for youth drinking. Lots to be done.
The taxation is high, but it's smart. In Germany we have similar problems like in Spain, the money is just wasted left and right here and economy struggles with overregulation. Denmark also has a tax-funded social security system (like Sweden) and I think this is in the long run superior to the Bismarkian "pay as you go" system.
Following the color code in the video, Germany use the violet tax model. XD
I think that EU should examine and determine how to apply and distribute taxes looking at models and historical data, government just try to follow the latest populist push without evaluating rationally what could be the most optimized system, isn't it just old and ineffective to go by ideology and ignoring facts?
Yes. As a Dane, I actually prefer our relatively high taxes, because they pay for what would be many "surprise" expenses, if I lived in US.
If I lived in US, I would have to save up a lot of money, in case I lost my job or got sick and needed surgery, etc.
Instead I can spend what I have, which is good for the economy, shops, and companies, and still get healthcare if I need it.
I don't have to worry about paying rent or buying food, if I become unemployed.
There are benefits and drawbacks to every system. But I wouldn't want my country to change to any other system.
@@anderslarsen4412 you dont have to save a lot, you can just invest in a HSA (A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.) and for saving for lost jobs you could either invest your money in Roth IRA or 401k(401k is pre tax money) which allows your money to grow tax-free (both of them) and if you don't want to invest you could just have a emergency fund(of around 3 to 6 months of expenses).
@DoubtingThomas isn't it possible to try different ways and determine which is better (or less worse). I'm ok with some people being disgustingly rich if this doesn't impact on other people's well being (it's probably an oxymoron but if by some reason it's possible, who cares ?)
About company taxes, it's worth to note that there's an immediate 2:1 tax refund for buying new tools, machines and so on. This means that keeping your production line up to date a) takes money directly out of the profit tax box, and b) refunds 44% of the cost through lessened taxes on the remaining profit. As a result, most companies in Denmark are more concerned about the loss of production during upgrading than about the direct cost of the upgrade...
Its called subsidies, and are for sure a part of tax code...
Thanks for this amazing information !! If you don't find a means of multiplying money, you will wake up one day to realise that the money you thought you had, has finished. Investment is key, I pray that anyone who reads this will be successful in life
You're absolutely right, to be a successful in life required not only hard work but awareness and sometime opportunity at the moment, investment remains the best way to start.
@@ashtonakhtar5892I agree with you. Investment is the key to sustaining your financial longevity. And not just any investment but an investment with guaranteed return.
yeah investment is the key to sustaining your financial longevity but venturing into any legit investment or business without a proper guidance of an expert can lead to great loss too.
@@stephenadiela-xi6ndExactly and many of us don't know where to invest our money so we invest it on wrong place and to the wrong people
@@philippine6168 Obviously talking about been successful, I know I am blessed if not I wouldn't have met someone who is as spectacular as Debra Barton
It's nice to see the comments aspiring to Danish Jante law "who do they think they are, having money and welfare, I bet it's actually awful and blablabla". Sorry guys, it's pretty good. Have a nice day.
How high is your GINI coefficient again?
Says a Random dude on the Internet. Good luck kiddo
@@oppionatedindividual8256 one of the lowest in the world
i highly doubt you have experience the social security system. it does not work as advertised. immigration destoryed it. hilsen en nordmann
Dont forget guys in Denmark we also have 6 weeks paid vacation
I don't know the situation in Spain, but one thing that also helps startups is that it is cheap to fail. With unemployment insurance and free healthcare available to employees and founders alike, the risk of starting a company is considerably lower than in some other countries. You can hire and fire employees without risk to them, and if worse comes to worst and the company fails, you won't risk homelessness yourself either. And with fewer such worries you'll have more brain cells free to work on innovative solutions.
True but that's the same in many European countries.
@@nocensorship8092 Quite true. It is similar many places in Europe. It may even be similar in Spain, I don't know. In America and other places in the world, however, it is quite different.
Another factor is investment in education - not only for initial training but also with an extensive system for retraining the workforce to ensure that the skills in current demand by public and private employers are available on the market. Rather than attempt to protect dying industries changing to newer more prosperous ones is encouraged.
Another note: The reason that capital gains are taxed at taxed at 42% in the highest bracket, is so that company tax plus capital gains tax roughly equals payroll tax. This is to avoid speculation of whether you should pay out as capital gains or as salary (at the highest bracket for capital gains anyways).
The Dane does not pay a premium for his medical expenses (insurances), such as doctors and hospitals. Medication at cost price.
But economic data aside, Denmark is consistently the happiest nation in the world in the macro polls. The Dane has a reliable family network and is independent and very reliable in his behavior.
I myself left the Netherlands 10 years ago and I now live in Denmark. Returning to the Netherlands is out of the question.
I just moved from the Netherlands and I'm getting the same feeling, it's way worse in the Netherlands compared to 10 years ago. Everything is micromanaged into oblivion.
imagine us mere mortals that live in third world countries. living in a country like the Netherlands would be a blessing
@@--julian_ In 2030, everyone in the Netherlands will no longer speak their Dutch language, but the Arabic languages.
But I always thought you Dutch people were a lot like us Danes
@@marctorp7256 Nej, det er en stor forskel i både, dvs kultur og moral..
Another fun note, is that these very low unemployment numbers and high taxes have lead the government to run a huge surplus.
Denmark is pretty much perfect.
@@FictionHubZA Delusions of grandeur lol..
@@ytplol8446 I'm not Danish but Denmark ranks almost first in every metric and this "getting to Denmark" is even a common saying in politics.
One of only two countries in Europe to be surplus the last two years if I'm correct
@@FictionHubZA Dane here. We're not perfect, far from it.
I moved to California from Denmark and one thing I really find very visible is that the educational system in Denmark has a much better performance in ensuring overall education. Those with high degree of motivation and passion in a particular direction are not limited by the income of their parents. When I took my own university degree not only was it free, but the Danish government provided me for the financial support making me able to graduate with zero debt. Here in California we hire an enormous number of Indian engineers with H1B visas due to the failure of the American education system in producing enough of the highest educated candidates.
Except American students objectively perform better on most tests than Danes. In fact Denmark is pretty low for what they’re perceived as
In Denmark we have something we call “work-happiness”. We even congratulate people on the street with “congratulations with your work”. It’s not only an way of income/taxes but more as an way of life that makes the difference
Many think that Denmark is a socialist country, but we live in a CAPITALIST country. Though the distribution of wealth is much more even than in many other countries.
It's certainly NOT perfect, but it's coming closer than many other countries.
At times it feels a lot like socialism when I watch the brainwashing and social conditioning going on in Denmark. But at the end we still have the right to own land and the means of production which at least sets us aside from Marxist Socialism.
We have all the powerful central planners of socialism but our system is financed by a market economic capitalist system through high taxes.
We have at least a wide spread conception among the population of having a free media and free speech but our major media channels DR and TV2 are state owned and funded and the major news papers receives media support from the state, and there is examples of smaller dissenting media being cut off from this support. DR and TV2 as well as other media has recently become more one sided in their coverage of major events and has left out and ignored stories that tarnishes core establishment policies be the effects of Islam, mass migration, Covid vaccines and lockdowns or the war in Ukraine.
As a Dane, with the current inflation, my girlfriend and I are basically living paycheck to paycheck, so it definitely doesn't feel like we're as rich as we are constantly reminded about.
Aint the majority of Danes living paycheck to paycheck. I been here for 10 plus years and I see that a lot. Even as a student going to gymnasium some teachers have jobs on the side just to make ends meet
I feel the same, I can't see that enormous wealth we are supposed to have.
Something that has to be cleared up, you cant pay "55% of your income".
Theres Something called the top tax limit, and I think its around 700k
So if you make 750k a year, you only pay 55% of the 50k over the limit
Interesting
Wrong. Is 500.000kr
Normally you pay 47% plus 25% in sales tax. That is insanity already. it does not need to be at 55% to be insane!
Free Denmark!
Down with the welfare state!
I think an important thing you forgot to mention about denmark is that the genera Danish population pays their taxes with a smile, we are proud of the contributions our taxes have, they help keep the country running, gives free education (actually more than free, as you recieve financial support during education), and keeps us all healthy with free healthcare.
The ammount of trust Danish people have in the government, despite possibly disagreeing with the current government's politics, is wonderfull, and imo it's what makes the Danish lifestyle possible.
Also we sure have high taxes, but we've pushed minimum wages so high up that even the lowest payed full time workers can live comfortably. And we also have systems in place so people will get compensated with minimum wage pay for the hours they are unable to work (due to illness etc.), and even if you are fully unable to keep a normal job, you can still live comfortably and have a good life. Denmark takes great effort to catch people who are about to fall, and help them back on their feet, or at least not let them fall any farther.
I live in Denmark and I don't pay my taxes with a smile. Neither does any of the people I know.
I think our tax rates are horrible! It is like Nothingham under Prince John.
I know Danes and they all hate high taxes and often fake their taxes so you’re just lying
It’s also really easy to start a business in Denmark. You can start a personal business for free within the time it takes to fill out the legal forms online. A business like this is like an extension of you as a person, but with certain rights and obligations that make it a favorable choice to do.
When you’ve done this, you can start deducting all business expenses from your personal income tax, and are only taxed on the earnings from the business like normal income tax. If you have a deficit in the business, you can also subtract that from your income tax, and this deficit can be moved to the next tax year as well.
If you buy a computer that is used for work, but is also your gaming computer, you can deduct 50% of the purchase price as a business expense, and so on.
Denmark uses the collected taxes to invest in it's people. Good education for everyone, good health care for everyone, investment in new training if you would change careers. I'm not saying it's perfect, but I think it's what a lot of other countries can learn from.
In this time and age, we give billions away to other things, and far less to health care than we use to.
The education is horrible, we score mediocre on PISA tests. I remember my schooling in Denmark in the 90's and early 00's to be a total mess with very little learning and a lot of wasted time,
Further the longer school days in this hell brought about by the Social Democrats reform a few years back has been a catastrophe which has affected the kids mental health and well being to the point where our present Social Democratic PM is about to scrap the reform. Also We don't invest in our own people, we invest in bringing in third world migrants to a sum of 33 billion Danish Kroner, a bill payed by the Danish tax payer while there are still plenty of unemployed danish people we could try to integrate into the work force.
The health care used to be good. My mom can't get the proper screenings her condition requires due to cuts and I cant get Plantar wart treatment. The money has to go to Ukraine.
You taught me more about taxes, than several people in my life including teachers have been able to
🤓
Cool video! I wanted to add that in the Netherlands, VAT is also divided in brackets, with a low rate (I believe 6 or 9%) being applied to essential goods and services such as groceries, and a higher rate of 21% being applied to less essential/luxury goods (although the term luxury should be interpreted very liberally here). This way, people that spend more on non-essentials (e.g. the richer people) pay proportionally more VAT.
That being said, the Dutch tax system is far from ideal, as we too tend to tax labour heavily and shroud the hiring-and-firing process in red tape 'to protect labourers'. As an example, the government wants people to work less part-time, but upon investigation one may find that a 24 hr work week yields more net income (taking into account taxes and subsidies) than increasing to 32 hrs/week in the same job. Many people in my parents' business put this forward as a reason not to work more (and rightfully so). Maybe this can be an interesting topic for a video someday.
Indeed, the danes didn't get so far yet, not at all, even the opposite encouraging workers to work more
Hey. About the beurocratic costs of contracts in Denmark i fear that you missed the mark. The reason we don't have minimum wage legislation and other such workplace laws is because our labour unions make those rules. We have massive nation wide unions and a majority of the working population is a part of a union.
He missed the mark on pretty much every point in the entire video.
Always fun to see how your own country looks when others peer in from the "outside" as it were.
So many bitter and jealous people in this comment section lol.
Just remember - Denmark didn’t make this video, so I don’t understand the hate it’s getting from Southern Europeans in the comment section lol
A group in Denmark wants the government to use Legos to repave their highways. Unfortunately, they've been running into a lot of road blocks.
Dont quit your day job!
As a Dane I have paid a full tax all my life, as I was also able to buy my 2 houses in cash, without any tax-deductions from loans (The Danish loan systems for houses are also among the very best, and less expensive, in the world!).
At times I paid more in tax than I was paid, at my job!!! But of course I know that we are born in the absolute "buttercup" of the world and that we get much back, as now just a Public Pensioner! We could have been born in Yemen!
My wife and I are able to do what we want, to a reasonable degree.
Yes ! Life is a lottery .. When and where we are born decides everything.....think about
that from time to time..?
I’m from Denmark, so you just made my day
Thanks man:)
🇩🇰
As someone currently living in Spain I wouldn’t say taxes are the problem (yes, they are high and real incomes are low, but that’s not THE problem). The main issue is the amount of taxes wasted in bureaucracy, excess of public workers, and lack of efficiency in general within public institutions. The amount of money redistributed is very little, and therefore they are usually in the urge of taking more takes of rich (and average) people to compensate that
If you lower taxes, you will have more bureaucracy per tax dollar. To get a more efficient system, you want to raise taxes, so the government has enough money to be able to afford to be effective in their task of giving back to the economy. It sounds counterintuitive, but really it is not: When you pay people well they are more inclined to do the job well, when you pay them poorly they will try to get away with minimal effort.
This has been a very interesting video about the issue of taxation. Singapore has some elements of it in the form of generally low taxes for personal and corporate income, but it doesn't have the same level of wealth redistribution or consumption taxes. Having seen this, perhaps that is something that our country can consider moving towards as we seek to tackle the issue of income inequality.
Would be nice to see Visualeconomik EN comparing the difference Singapore and Denmark
Well, wealth distribution certainly makes for a more stabile society, without having to resort to harsh penalties and prison sentences for minor infractions, like I believe there are in Singapore.
But we are a relatively homogenous population in Denmark. It might be difficult to implement our system in countries with more diverse populations?
It's difficult to fully understand the system in Singapore. Education is extremely good in Singapore and yet, when Singaporean graduate from University etc. they usually end up now securing salaries that match their education. It seems that the best way forward for Singaporeans is to move abroad for maybe 5-10 years and go back to Singapore. Then, they usually have a greater possibility of landing a job with higher salary.
There is another couple of differences. In Singapore, there is compulsory military service and people are being called in yearly until age 40. That is actually a huge problem for companies employing Singaporeans.
Another problem is the lack of Singaporean blue collar workers in Singapore. The amount of foreign workers in the cheap paid labor segment is far too high in Singapore. In Denmark, Danes are doing hard manual labor as well. There is no system like in Singapore where you can hire cheap labor from Bangladesh, China etc. That system in Singapore basically depress the average salary levels for Singaporeans.
High skilled western foreigners are usually paid high salaries in Singapore mostly because they usually have double household expenses and also usually because they are employed by the mother company of foreign companies where the policy is that a certain amount of the company nationals is needed due to the company identity etc.
Singaporeans, if willing to relocate to a country like Denmark could probably secure much higher salaries than would be possible in Singapore. However, most Singaporeans are usually not happy to relocate to foreign countries for too long.
@@anderslarsen4412 I don't think our penalties are that harsh TBH. Yes you can go technically to jail for offences like littering, but thats only if you keep doing it. It starts out with fines and escalates from there (going to bigger fines, then corrective work orders AKA community service, and then to jail time), so I think personally that its a fair system.
I don't think it matters whether we have a homogenous population or not in this area because we're not talking about something that might have religious or racial implications. I think a bigger consideration is what is our local culture and perceptions like for policies like this.
@@TheChiefEng The military service is a problem, but as a manager myself I don't see it as a big one because the big 2 year block of time where Singaporeans have to serve the nation happens before they start work full time rather than after, so there is no disruption to business operations once I've hired them into the company. The only real impact is the annual reservist requirements, which aren't even that long and can be easily covered by their colleagues. I usually just treat it as them going on vacation for 1 - 2 weeks.
The attitude of many in the country of looking down on workers who work in what is perceived as less educated jobs is an issue though. I think the problem with getting locals to work in these jobs isn't just about the salaries, but its also about the perception that the people working in them are "lesser beings" than those who are not. There needs to be a real shift in the perceptions towards people working in these areas. A salary increase alone won't be enough.
I don't know of any company that has this "identity" based employment practice that you have mentioned. All of the companies that I've ever worked for and with have almost always employed individuals based on their skills and experiences. The only exceptions to this are in situations where efforts are made to hire locals, either because of regulations or business needs (e.g. a local lawyer is better placed to advise on local business requirements than a foreign one). Nationality based employment is just counter productive. Can you please give me the names of some companies that do this?
Maybe the question should be, why are the USA (and the UK, maybe) so poor, in spite of low taxes?
Som en dansk person så er det sjovt at se folk der snager om danmark/as a danish person its fun to se pepole talking about denmark
Thank you for this vidio !! Many are commenting on the Danish high taxes. Bear in mind that the Maersk family has not left Denmark. The Lego family has not left Denmark. The Holch Povlsen family - Heartland (Bestseller) the biggest private landowner i Scotland has not left Denmark and many more affluent families have not left Denmark........Many large international corporations have come and want to come to Denmark. So those people who are complaining about the high Danish taxes and who are telling the world that they want to leave Denmark...-Go, leave the country and be aspiring hairdressers elsewhere.
When Danes, who complain about the taxes, are asked if they would prefer an American style system, only the ignorant and the young typically say yes. When you get a bit older, you learn to appreciate the free healthcare, free education etc. Is it the best system in the world? Hell no, but compared to most other systems, it is actually very good. The Danes work to live, they do not live to work. Danes love their free time, but when they are work, they are highly productive. Most Danes understand the need to contribute to the system via taxes. Danes deeply believe in that other less fortunate Danes should have access to help whether this being in the form of social welfare, re-education, special medical attention etc.
The biggest difference between a country like Denmark and countries where the wealth distribution is more unequal is the culture of caring about other people than yourself.
Rich people don’t pay taxes like employees do.
@@TheChiefEng I dont prefer anything, thats the issue, in Denmark im forced to be a certain way, put on masks, cant smoke here, cant say this or that!
Kind of phuckin hard to get out when its dangerous and illegal just to ask if you can travel after this whole confit sham fascist b s..
Especially without a mask as a whyte person..
Well, good for those three whatever, hundreds of firm stays in us doesnt mean anything..
Its just Hugh cash-grab for their image like woke Denmarx sells good to Woke mericans..
Interesting video. Had always considered VAT to be anti poor but you are correct it's more about how taxes are spent
The trick is to implement a VAT tax that is higher on "luxury goods", (which are mostly bought by people that aren't poor).
So, you keep basic necessities (like groceries, medicine, and diapers) VAT free, and and increasingly high VAT on items that aren't considered necessary.
Like, expensive cars, yachts, brand perfumes and clothes, etc., can easily be taxed much higher.
@@anderslarsen4412 Tacks is a scam..
Its both at the same time. It helps to grow the economy, but at the downside of increasing the wealth gap.
@@anderslarsen4412 good idea
I would support both Denmark or Spain, over Germany, which acts as Denmark (for middle and lower middle class) and Spain (upper middle class business owners). Germany's GINI coefficient is fairly poor, for third highest taxed country (after Denmark and Belgium), and adult wealth ownership (worse than Slovenia, Malta, Portugal) is very low for GDP per capita (at par with other Nordic European countries).
Profotability of major DAX companies are marginally better than US counterparts (e.g. SAP vs Oracle), yet salaries are about 75% worse than US companies for similar level of productivity. 65% of capital flows outside regular capital market. And profitable DAX companies as well as family owned Mittelstand companies are mostly domiciled outside Germany, in tax heavens like Switzerland, Luxembourg, Ireland. Making Germany basically a consortium of industrialists, than a country operating under a rule based jurisdiction.
Denmark GDP growth has almost entirely been fueled by a single company, Novo Nordisk.
Besides what is explained in the video I think that the safety nets we have in Denmark, free hospitals, free doctors ect. Also makes people not worry and feel safe, which in turn makes them work more focused at work, which then makes the business grow better.
Too bad it also leads to 12 years waiting list, east bloc style, just for initial screening. Or a year of waiting just for a hearing test.
@@kristianpoulherkild3401 It is rather difficult to make your information agree with reality. If it is not your intention to distort the debate with false information, then I would encourage you to provide evidence for your claims. There are no waiting times of 12 years, but it probably fits a certain narrative well.
@@TheKIMANO Next time, do you research before speaking up. That reduces your risk of looking like a fool. 'Idi nakhuy' would be the proper response to your accusations of me spreading fake news and having a dishonest narrative and agenda.
@@kristianpoulherkild3401 Which treatment has a 12-year waiting period?
@@kristianpoulherkild3401 The treatment that clearly has the longest waiting time is the so-called breast reconstruction with own muscle tissue, which is carried out in the plastic surgery department at OUH. Here, as a patient, you can expect a waiting time of a total of 156 weeks, i.e. the equivalent of three years.
The key to denmarks high GDP is the high salary. For comparison if you take a warehouse work, you get 30k dkk or 4k euro brutto. In Lithuania for the same job you get 1.5k brutto. Now after taxes, the average person will have around 20k dkk or 2.7k euro netto. In Lithuania you will have 977 euro netto. So the following question goes what about utilities? Rent + commodities in Denmark depending on the size and location could be anywhere from 5k dkk or 670 euro to 10k dkk or 1.3k euro+ . Comparing to lithuania, it also ranged from 400 to 700 euros +. If we pick the cheapest options:
Denmark: 2.7k - 670= 2.03k euro
Lithuania: 977 - 400= 577 euro
No need to forget insurances and food etc. What is left after everything?
Denmark = over 1k euro for sure
Lithuania = max 200 euro.
In short higher incomes allows you to purchase more and thus have higher GDP.
I'm no economist, just a simple question : is it easier to put a country up to the top when it's a "small" one, having an homogenous population and not having a huge territory than when it's having more than 40 millions of inhabitants or it's geographycally huge? Singapore? Rich but but small country. Norway? The same! Your thoughts about that?
Singapore is anything else than homogenous. Probably the most multi cultural country in the world. Denmark also has a significant foreign born population. Norway is also a pretty decent sized country.
It's not obvious that small size would help. Singapore is an unusual case because it's basically entirely urban whereas Denmark is a more normal country with both urban and rural areas. How would small size help Denmark relative to, say, Spain? Would Spain be richer if it were divided into countries the size of Denmark?
@@seneca983 maybe that's the solution! Break up countries into tiny independent states, so they be rich! Lol
@@mayer14474 Lol! Seriously speaking, I think that probably wouldn't work in general but might in some special cases.
that is a good question. Could be that larger countries tend to have more regions with low income, which will drag the average down?
Its difficult to compare taxes but great job. I don't know if I have seen a better comparison elsewhere.
One advantage of VAT or sales tax, you didn't mention, is it taxes all production factors (land, labour and most importantly capital) indiscriminately. Meaning you can't weazle your self out ofthem and they can be simple to collect (especially the sales tax). As a result, you have a good base line taxation and you can use other taxes to regulate, which revenue streams should regulate final prices and provide contributions to, for instance offsetting systems, such as consumption tax on tabbacco, which can be funneled into healthcare to offset increased expenses caused by ilnesses caused by smoking.
To a point. After that point (if VAT) is too high, a cash economy grows.
VAT is also a great way to get the lower and middle class to actually contribute to tax revenue instead of over relying on the highest earners.
Hello, I'm an expat in Denmark for over a year now and the answer to your question is: It is not.
While incomes are high, so are taxes. Little remains to be saved, even by most well-earnering Danes. Pensions are nearly non-existant.
It is all held up by a real estate bubble. It is what allows people to sell parts of their houses to banks in order to survive during pension, while most houses are old wooden houses of poor quality and structural value.
It is a mirage.
So, would you argue that Spanish tax system is outdated, at least for current econimical situation in Spain, and that it should be reformed to improve economical performance of Spain?
Yeppp
Hallelujah
As a dane and living in Denmark, its redecules to see the people again and again wote on the parties that just whants more taxes to the people.
One issue with higher VAT in a globalized world is that it hurts local retailers. It's very hard to collect VAT on international vendors, so it's possible to shop online in many places, especially for digital goods, without paying any VAT at all. Large vendors like Amazon will work with the governments to collect the appropriate VAT, but small vendors likely won't. Some of these are resellers, so you essentially get the same product. I'm sure that Danes still prefer the convenience of buying with VAT, but with local or well-known international vendors. However, it still lowers local retail profit margins and encourages law breaking. Other than that, agree with the video. Not all taxes should be progressive, and a general business-friendly environment is often more valuable than low taxes. As always in economics, it's a question of balance. One key aspect that's difficult to quantify is the local culture, which in Denmark encourages people to trend toward the middle, while in some other countries (especially the US) it encourages people to go to the extremes. Each one of these has its own pros and cons, from an economic standpoint.
VAT is arguably the easiet form of Taxation that exist, and since it is easy to make a diffirentiated VAT (Sin Taxes and higher VAT on luxury) it is holy up to the governments to make it more equal.
"However, it still lowers local retail profit margins and encourages law breaking."
No, of course it doesn't. The reseller simply ads 25% VAT on top of whatever price he wants to take in order to make a profit. It's not exactly rocket science. It's the buyer who pays the VAT, not the reseller. If you mean law breaking by not adding VAT to your products then you're simply setting yourself up for big trouble when the state comes asking for that money.
@@LarsPallesen Obviously this is not what I was referring to. Local retailers have to compete against international retailers who will gladly ship to Denmark. A few large international retailers don't care about Danish laws, and most small ones can't enforce them in the first place. There is always some cheap competitor abroad who will sell cheaper inferior products, but a high VAT means that local retailers need to sell *the exact same products* for 25% more. Granted, this is an over-simplification of international supply chains. However, the general gist is that higher VAT = local retailers are at a greater disadvantage. The law-breaking would be by savvy consumers who don't want to pay the 25% premium. Good luck enforcing it on every single personal import! Even better luck enforcing it on digital goods (software).
@@Ynhockey It was like that until a few years ago, the EU slapped that down hard, now international sellers do have to collect and pay the VAT, for digital goods that isn't any easier to escape paying the VAT on either as the companies for sure doesn't want to be excluded for the EU marked and that's how the EU handles it, target the companies or even the entire country the company is in, but not the consumers when it comes to collect the VAT so be a savvy as you want but you'll find it very hard to avoiding the VAT.
@@bnorth1087 That is only for those residing outside of the EU. If you can find something in Germany, Poland, Sweden and so on you only have to pay their vat.
Still don’t get how they get away with that 50% VAT???? The economy should be in shambles?!?!? Should’t it???
It is. 1.2% growth is not good but Denmark is at that
It should be noted some taxes are flat, municipal tax for example. Many of the issues of a high tax system can be minimised when the tax rate is as flat as possible, it also raises a lot of revenue. The German social security tax is similar. However i do know the people i work with in Denmark do commonly complain about their tax system, but then so do those who work in Germany so perhaps its a common aspect of any tax system.
Exactly. Council Tax, as it is called in Britain, is in Denmark taken directly from pay and adds another few % that many others ignore in their calculation. We will always complain about taxes - just like we'll always talk about the weather, it's human nature I think..
I'm a Dane and just want to ad, that most Danes agree we have become way too bureaucratic. We are a mere six million people and we have three different types of govern rule, so many sub-departments of ministries that it hardly can be counted on two hands, inefficient public computersystems and law-books containing sub-laws from here and to the moon.
Yes we have it good. But were these problems solved, we could probably pay WAY less in tax 😉
I think you overlooked an important factor when analysing why Denmark and the other Nordic countries, well all of Scandinavia, Northern Europe, and Northern America are so rich: The climate, in particular the long, dark, cold winters.
It changes the culture of people when you know on an deep instinctive level that only by preparing, only by collecting and storing food during the bountiful summer and autumn, are you able to survive. There is no "manjana" (I will do it... tomorrow... I think) as in Spain or Mexico. You work if you want to survive.
What about "hot" Australia, Singapore, Hong Kong, California, Hawaii, Israel and more examples???
Then can you explain why the West civilization came from "hot" places like Athens and Rome? Why the coastal areas in southern China where the snowy winter doesn't exist are much richer than the northern part and Mongolia where the winter is unbearable?
I can't agree with you. The southern countries in Europe also have to store food in the winter time. For them it's harder, because the temperature is higher. If you look at food culture in southern regions, you see many ways of preserving food. Just go south of the Danish border, Sauerkraut it is fermented kale, and it is a way of preservation, we rarely use here in DK.
absolutely right, plus Roman heritage (law, religion etc.)
@@julm7744 I agree with this, even if you look at a developing country like Vietnam, the tropical south is also richer than the temperate north (not everyone knows that half of Vietnam is temperate).
Fascinating video, but the 2014 article citing Denmark's " Paradise of the middle class... no longer valid or accurate. In fact, Denmark has one of the fastest-growing inequalities amount the middle class and elite in Europe. I have lived in Denmark for 16 years, and there have been rumblings about lowering the taxes in Denmark amount to the elite, a Reagan-like, trickle-down theory. We all know this to be untrue, and it only benefits the wealthy and elite. We also see the elite tend to invest tax savings to make more money. I encourage more up-to-date facts to reinforce your arguments. Thank you for the video, nonetheless.
Well one of the major things about the Danish model is that if fits the culture of the people.. In Denmark we dont like a Showoff part of the Culture is that even the super wealthy people dont show it, they are not that public about it.. Most Danish people just want a good life/work balance..
You were on point on legislation, but as a spanish citizen there is also a cultural component that explain the broader problem. In Spain there is a very, very poor finance and enterprise culture. Most people will not save, let alone invest properly. Companies believe that paying lower wages is the best way to compete, while investing in R&D is seen as a waste and almost ridiculous. Most of our economy is focused on tourism and low value services, wich don't require a lot of investment but don't benefit the economy much either, and suffer tremendously from global events like covid. Getting a loan from a bank for a project is a nightmare, and they will want a ton of guarantees before handling you anything. And so on and so forth.
When examining the Danish system of taxation, you need to factor in deductions, which are quite high.
The lowest deduction in Denmark (which everyone gets) works out at 15 % of the average salary (20 % of minimum wage).
If you are in the lowest tax bracket, you pay 38 % income tax AND get a 15-20 % deduction, so in reality your tax rate is 30-32 % on minimum wage.
Can you explain? What can a normal employee deduct?
@@jdr4674 Everyone gets around 15 % deduction up front. - it's not a percentage, but an amount of DKK 48.000, so the percentage differs from person to person, depending on your gross income... the 15 % is based on average minimum wage.
After that it depends what you spend money on, but examples of further deductions are:
Union fees
Unemployment insurance fees
Cost of transport to work (above 24 km)
Payments to your pension plan
Interest on some types of debt
Etc.
The tax rate on minimum wage is much much higher than that. You have definitely made a mistake. I pay far more in taxes than that
@@jdr4674 He are not explaining it correct he are just referring to own numbers and make a back calculation in percentage. Let me give it a simplified try: The first around 5000 Euro ANY income taker (hereunder even those getting social benefits to sustain life) earn are 100% taxfree. Becaue our tax year follow the calendar year and most get paid monthly you get 5000/12 taxfree per month. So if you are a young teenager working as handy man every Saturday in the local supermarket you probably will get all your income that year taxfree. This taxfree "bottom deduction" are a great help for students that take an a smaller job on the side while under education, the low wage worker etc. Then additional income are based on tax brackets with a max of 55% of last earned income inside highest taxbracket. NO matter how high your salary are you will keep your 5000 taxfree bottom and you will pay the tax as stipulated inside the brackets ONLY the salary going higher than last bracket are taxed to the max 55% Therefore it are impossible to find a Dane that actually pay an effective tax of 55% because that are not technically possible. Many use our highest taxbracket as an indication of our effective tax but that are either because they do not understand how it works or have a hidden political agenda (like we often see some in USA with their usual unfounded confidence do). Around 40% of Danes have parts of their income reaching the highest taxbracket.
OK, that was the basic tax income structure. Now the actual deductions. Most Danes that have a job have minimum two standard variable deductions. If you have more than 20 ish kilometres to and from your workplace calculated from your postal address (no, cant be a postal address in Timbuktu) you can deduct a small fee per kilometre per workday. This deduction are not dependent on means of transport. So if you have a car and drive you get some help to pay the petrol, if you use public transport if will give a solid reduction in cost and if you use a bike you can laugh all the way to the bank. Using a bicycle thus are good for your health and you economy. You can stimulate good traditions in many ways! The second deduction many have, are ability to deduct a percentage of interest rates on debt. This little tax stunt combined with annual inflation, over time (!), in the Western world typically are around 2,5 means that it makes sense to dig deep when entering the private property market. The tax deduction matters most for those with high debt (new entries to the property market) relative to income. The tax deduction are taking from the top of your income so for some the deductions are the reason why they come under the highest taxbracket on last part of income and thus the brackets and deductions help the most where needed.
Since we have capital gain tax, like realised profit on sale of stocks (depends on how long you have owned the stock, if more than a certain amount of years it are taxfree income) so if a person have decided to have some savings invested in stocks and they, say, get unemployed, they will get an extra benefit from selling the stocks in a "rainy day" year.
Danes do not spend a lot of time on taxes. We all have a personal number we get when we are born and close to all informations are inside the system so we basically get a letter (most in their state electronic inbox) a year telling us what information we HAVE been taxed by, during the year and if we have anything to ad, like the deductions we can do so in a number of ways. Most log on a governmental tax website an fill the few deductions in. We can make changes anytime during the year we like but this are the prep for the final annually saldo. Then we get another after years end with the saldo and message whether we owe tax or will get some returned. System today are so efficient that very few have any nasty surprise coming they are not aware of. If the state owe you money you will get them no matter how small an amount but if you owe a little they just calculate it in for next year unless you insist on paying. If a larger amount you have 3-4 months to settle it. Around April any amount the state owed are paid to your bank account. The state pays interest rates for any excess tax you have paid and thus technically loaned to the state. If you have same job at same address and same or close to same income and have not changed bank or owner of your property loan, you normally do not have to do anything but approve the figures sent to you.
No one here actually pays 55% of their income but the welfare state are for all, even a multi millionaire will get a pension from the state and even a CEO that gets unemployed will be liable for benefits if getting unemployed. Our healthcare system are free including transport etc if you have that need. We do have brackets in relation to prescribed medicine based on income as well. There are limits to how much medicine can cost you annually, the pensioner have a low bracket for when they do not pay anything anymore, the high incomer a higher bracket.
I hope that gave you a little more technical insight into reality.
@@Mike-zx1kx Thank you for the detailed answer! I think I understand most of it. Many of the mechanisms you described are the same in most EU countries I would believe.
I currently work in Denmark and pay my taxes here, and was curious if there is anything to deduct, but it does not look like it.
One thing is unclear to me - do you maybe know anything about it? As of now, I seem to pay social security contributions twice. Once in my home country, where I'm technically employed, and once in Denmark, since here it is part of the tax, not a separate payment like it is usually. I'm wondering if I could get those contributions back, or if I could earn a pension here, since I'm paying the contributions anyway. But as of now, it is not accounted for. I should probably ask a tax advisor and not bother people on youtube :)
The thing people don't understand about taxes, is that taxes don't just go into a black hole. The taxes go to the government, which then spends the taxes on behalf of their citizens, which in turn means that the citizens don't need to spend as much money themselves on things like education, healthcare, transportation, etc. i.e. Taxes don't make people poorer, they just make people more equal.
tak for at lave en video om Danmark :D
Being an investor and resident in Denmark i can say that the capital gains tax is ridiculous and i am going to move:)
Excellent video. There's more to the story, but certainly puts the finger down very well on some crucial elements when it comes to the effect of different taxes. Also, because VAT punishes not consumption and favours savings it is also environmentally and climate friendly.
Ребят, все просто. Дания - это организованное и некоррумпированное общество всеобщего благосостояния, сформировавшееся на идеалах и принципах протестантской трудовой этики. Вся Европа должна была в своё время принять реформацию, отказаться от показной роскоши, вычурности и понтов и начать усердно учиться и ценить труд, как это сделали после реформации немцы, голландцы, северные европейцы, англичане и швейцарцы. Мне очень жаль православный пояс Европы от Македонии и Сербии до рф и Украины. Такое чувство, будто эти нации всю жизнь обречены быть бедными и коррумпированными.
It’s almost a rhetorical question. To pay taxes you need to generate an income first, or have wealth accumulated over a period of time. The more you pay the more you have generated (i.e.: the richer you are).
Blue/red country example is wrong. Because when red land's inhabitants invest/consume they pay 50% in tax. So there is no investment of 100, but rather an investment of 50. Just like blue.
Too simplistic of an explanation. Did not figure in income equality or inequality, effective spending income, levels of personal savings and debt, social supports, healthcare structure, cost of living,etc. This video sounds more of an argument for American corporate capitalism model, which has been failing 99.9% of the world’s population. Consumption taxes do not equate to corresponding investments in the traditional sense
How on earth did you hear this as an argument for an American corporate capitalism model? It's a praise of a high tax model that's almost the exact opposite!
@@LarsPallesen I might be wrong but he seems to have an argument in favour of a consumption tax rather than an income tax under the guise of allowing more investment. That’s the typical neoconservative position in the US
Finally, you actually answer the question given in the title. :) :) :)
Very interesting and informative episode. :) :) :)
Btw as a normal dane you pay about 38-40 ish % taxes. 55 is only for the richest and is before ANY and all deductions (which there are MANY of)
your true taxes are far higher if you factor in all of the different consumption taxes. For example more than half of your car insurance is pure tax. or the tax on gasoline or electricity or the registration tax on the car and the very high VAT and the very high property taxes that also increase the rent prices a lot..
@@nocensorship8092 yeah but that doesnt mean we have 55% tax no other country counts gas taxes and house taxes and car taxes when they say what % of their income they get to take home in their country? with all those taxes we get the shit that others pay for constantly.
As someone who has lived both in denmark and USA and had similar income either country i can tell you that over time i had alot less money and freedom of that money in america. I had to constantly have a shit ton of money put aside for things that are free in denmark and i never had to worry about before. If i couldnt pay a medical bill i would go into debt that could ruin me (which almost happened). i was very lucky to avoid having to take on debt a few times to make due and the american way of doing debt is insane. its built for keeping you paying forever. The rates are high but more importantly the way you pay it off is insane. I had friends who were spending almost all of their free money on paying off debt. One was school debt the other was for medical. They were paying it off constantly and yet they barely reduced the actual debt each time due to the way rates are calculated. the guy with school debt even had some private debt as well and the company that held the debt went bankrupt but then just give his debt on to some random 3rd party.... thats not how it works in other places. If you or the company goes bankrupt and closes then they cant just sell off their debt.. its gone.
@@nocensorship8092 but then you also have to count in all the deductions: there are several of them: Personal deduction (an amount of your salary of which you don't pay taxes). There are deductions if you have more than 12 km. to work, if you pay to a union/A-kasse, if you pay interest for bank loans. Even gifts to charity organisations and sometimes "craftsman-deduction" if you make improvements on your house that more energy-efficient and "service-deduction" if you pay for help in your own house to things like cleaning, window cleaning, gardening or babysitting. There are lots of deductions that are usually never mentioned...
We are home of several companies that have a leading position in the world. It might not be big sectors like banks, cars, chemicals or food. It is usually smaller very specialized sectors. But we are home of a very big pharmaceutical company: Novo Nordisk. This company is something very special. In term of market capitalisation it is more valuable than a company like Shell, Bank of America, Coca Cola or ASML. The world's most 27th valuable company in stock market value!
I live in Denmark and I had problems paying high taxes while I was working, they make it possible for me to live a good life on my disability benefits and receiving world class healthcare without me having to pay anything.
People pay 72-78% tax minimum with income and tax on living as food ect. The hospitals is really bad, education is going down and getting worse and worse. old people dont get the help they need as the government promise the people, some is getting a bath every 2 week because there are cutting budget on care. Is a illusion that Denmark is doing good, sadly.
Hej
Im danish and i think you cover it quite good. As you say the flexibilyty of the work force is the most important i do belive. Of course its not funn to get laid of, and do belive me i have tried that several times, you get at notice. and it depends on what the work place deside, some times you work in the period other times you go home and the company pays for the notice period.
I work in industry and crafting, we have the lovest notice periods, depending on the trade union. But you will typical have from 1 week to 3 moths, depending o the time you ben with the company. I used to be a printer and after 5 years i had 6 weeks notice. And if i get laid of the trade union pays a desent amount so i can live preaty good.
And the other way around in the industry if i deside i want to cheng work i have 1 to 4 weeks notice. But often work palces are flexible and wil let you of before if you ask. The idea behind it is that if you treat your workers well they might return or speak well abouth you to firends.
A topic you didnt mention is the manager style. we have a rely flat maneging style. I have 1 leder before the CEO and we are quite a big company. The belive is your workres are free under responsability. That means for me i get an amount of work i need to do, and they expect me to do it. Its my reposability and no one controls me or how far i am in the procces. Of corse i fall behind, they might ask or if i think its to much i can ask for help from a college. Also ledership are very open to hear new proposals to change and improve the work. So if i sugest somthing they will listen and if its a good idea it wil be implemented
yes the same for me. and when we have dinner all together the boss is also included and treated the same as the workers. even our royal family is like everyone else. I never feel embarrassed or low in Society and i love that. everyone is just part of the flok
Denmark might be the best place on Earth to live. Deep down I think most people want equality, even if you’re not a communist! But there’s no Paradise on Earth and there’s room for improvement, especially in the health sector. The mobility is a key factor to the flexible employment system and work force, but transportation is heavily taxed, also a field that needs serious improvement. And then there’s the weather…..
Well it isn’t. This is propaganda. I lived in Sweden and visited Denmark and both nations are overrated
American here who moved to Denmark. Life here is so much better, and although things aren't as fancy, and living isn't as luxurious, quality of life is night and day, even compared to the US. It truly is paradise in comparison.
Yeah, a huge difference between the US and Denmark is you guys like to take things to the next level (big buildings, luxurious stuff etc), where we build small buildings, and don't really have any "impressive" stuff. Like the saying: "Everything is bigger in America" I feel you could say: "Everything is smaller in Denmark". But we love this "hyggelig" lifestyle.
ive lived in both places and Denmark is definitely more luxurious. Maybe you just chose a poor spot
@@billburrcorner2727 definitely not. Central air conditioning is common in America, washer and drier in nearly every home including apartments, built in closets are mandatory to be called a bedroom, ceilings are higher in the US, more people have cars, people eat out more often, building materials are better.... I could go on. I'm not saying these things are inherently BETTER than Denmarks versions of them, but they are definitely objectively more luxurious.
@@marctorp7256 definitely, and I'm in that camp as well, which is why I'm living here once again after 10 years back in the states. I much prefer Denmark for sure.
@@chenecaddell Building materials are better? That one I'm not so sure about. We're all about quality, not quantity.
I appreciate this video, but as a born and raised dane we still have a lot of issues. Mainly with the gap between rich and poor increasing, and the housing prices skyrocketing. As a 25 y/o working full time I have to come to terms with the fact that I will never be able to buy an apartment, let alone a house. This is mainly due to companys buying all of the housing so they can rent it out to suckers like me, which is pushing up prices. On top of that all of the smaller towns and cities are dying out due to companies moving work places to the bigger cities, our schooling and hospitals are being deprioritised to give way for more trax breaks for the richest percentage of the population, which is resulting in a lot of schools closing and the hospital crisis which we are now facing, the three largest political parties have formed a government which is failing on all parameters and we're seing no increase in pay, even though the cost of living has increased by a large amount. I do love Denmark, but it's a country with issues like any other 🤘
If you plan on staying alone all of your life, then yes, you might not be able to purchase a house
buying a house in medium sized cities is more than doable though for a couple. Bankloans exist
The Key words here are "HOW ARE THE TAXES SPENT".
Pocket and goofy $election gadgets..
Administration
@@TheGamefreakr Worlds biggest public sector, The 30% employed in the private sector pay the salory of the 70% employed in the public sector, roughly speaking.
@@TheGamefreakr Administration is not per say a bad thing.
There's a great report by Samuel Hammond of the niskanen Center where he basically advocates for the free market welfare state of which Denmark is probably the best example. Ireland is pretty good too, as is the Netherlands.
In Denmark we also have some of that tax returned in many form which one of them is government support to start a new business or education for that business
It would still be better if we did not have to go through all that red tape to get our money back and could just use what we have effectively earned on our companies and our own prosperity according to our free will rather than according to the will of bureaucrats and politicians.
When I sit calculating my tax deduction i dream of not having to do this and just keeping more of what I earn and spending the time productively on my company instead.
Free Denmark
Down with the welfare state!
Down with the Social Democrats!
As a dane living off of early pension due to being mentally unfit to work (autism, sensory issues, i’d go down with stress induced psychosis within a month) i’d just like to thank every dane in the comment section for paying their taxes.
Hopefully i can improve to a point where i can work aswell. I have a dream of becoming a vetenarian, and im currently taking classes in math to at least make progress towards that goal, slow as it may be.
I’m quite thankful that i live in denmark, most other countries i would be shit out of luck. Thank you fellow danes. Sincerely.
Formally imposed taxes are not the same as actually paid taxes! What are the loopholes? This would have been an interesting question!
At least with income taxes (assuming you are not a business owner), there are none.
But too many people focus on taxes instead of total monthly expenses.
For example, childcare is heavily subsidised in Denmark, and you get an average of 150 pounds per month from the state, per child, no matter your income.
To give an example, I live in the UK, and I only pay 20% in taxes, in Denmark I would pay 45%, however, it costs 1000-1200 pounds a month for a single child to go to kindergarten where I live, in Denmark that cost is 300 pounds.
If you have two children, one in a day care and one in kindergarten, you can easily spend 2000 pounds a month on childcare. Whereas in Denmark, it would be 450 (you get 50% discount on your second child), and your monthly payments from the state are about 150 per child, per month. So the total cost of child care for two children is 150 pounds in Denmark, and 2000 pounds in England.
How much higher could the average persons tax rate be with no decrease in total expenses if they saved 1850 pounds a month on childcare?
@Mar Coac People with no kids also pay for public schools, people who are not old also pay for elderly care, people without cancer also pay for chemo treatments.
That's how society works, encouraging people to have children makes good sense, otherwise there are no future workers to run society.
@Mar Coac Reality shows that people in poor countries have a lot of kids due to high child mortality, and children being their parents pension.
Reality also shows that amongst wealthy countries, places that make it hard to have children have a much lower birth rate than that of places where it is easier.
For example, Denmark has twice the birth rate of South Korea and Japan.
Saying that the expense of having children doesn't have any relation to the birth rate is detached from reality.
@Mar Coac some poor countries need dont know what condoms are😂
And seriously, some wealthy countries like Germany or GB have low birth rates, and multiple studies show that government subsidies for children have positive impact on birth rate (even in rich countries), so it might be a good solution
People who pay 55% in taxes, earn noorth of €500k per year. This is a marginal tax rate, as in taxing the LAST earned euro. The FIRST earned euro is taxed at 35%.. Just saying upwards at 55% is disingenious at best.
I absolutely agree that sales taxes are much better than income taxes…. I’ve been arguing for this for many year where I live.
I would even add that there is no 100% requirement that the sales taxe be flat (it’s easier to manage but that doesn’t make it mandatory)…. I could easily see a higher sales tax on “luxury” products (whatever that means) and lower sales taxes on basics (milk and bread for example).
Here in Canada, the main objection is that 80-90% of the population lives driving distance from the US border. People are afraid that a much higher sales tax will lead to people shopping in the US and importing stuff instead of buying local….
We have that difference in value-added tax(ation) in Germany. Basics like groceries, water, books, and local public transport have a VAT of 7%, "normal" goods and services like electricity, natural gas, gas, eating out, hotels, flights, and long-distance rail travel have a VAT of 19%. The line between basics and normals is blurred and often not very logical. Water and fruit juices are 7% but soft drinks are 19%. Software is 19% but literature in print, as audio, on DVDs, or via the web is 7%. There are pages and pages of catalogs on how to categorize certain goods and services conc. VAT. It's ridiculous.
The economy does need some income taxes though since it automatically helps stabilize the economy by increasing with inflation and decreasing with recession. The trick is the find the goldilocks zone where we get as much of the benefits of income taxes and consumption taxes as possiblem
In Texas, sales taxes are about 8.25%, but it is 0% for groceries to avoid putting to much burden on the lowest earners.
The issue is now you have state officials and lobbyists deciding what is considered necessary groceries. For example, after "completing unrelated" donations from bottle water manufacturers, Texas decided that bottle water are completing necessary for every household and therefore it won't be taxed.
@@twinmama42 It sounds like government officials and lobbyists are deciding winners and losers in your economy.
With the right donations, your high sugar drink with 5% juice can be reclassified as healthy and taxed at a lower rate than competitors. Due to it being a value-added tax instead of a sales tax, the taxpayers/consumers won't ever know what game the politicians are playing.
@@aclassicguardsman946 I would argue that sales taxes do perform the same counter cyclical role. When there is a recession people buy less (and pay less taxes) and when the economy overheats people buy more and pay more taxes. In more extreme cases, taxes can be raised to calm an overheated economy and lowered in a severe recession.
I don’t really see a good use-case for income taxes….
We also have a minimum personal deduction in our taxes that needs to be accounted for (not mentioned) plus when taxes are paid then you have pretty much paid for everything. Something that aren't very transparent in other countries.
as a Dane i can agree to what you said. I also feel very safe in my country. if i get sick and can´t work anymore i still get paid. so i would not become a burden on my family. but being jobless is not very attractive for yourself you want to work and be a part of society so no one will exploit it.
some immigrants do however because they have a different mindset than we do. imagine coming from a poor country and get a house, education for your children and free healthcare just like that.
many do love to live here. we have more freedom outside of work. no workplace is open after 4 - 5 pm except those who has to be open. nightclubs supermarkets and so on. i work from 8 til 4 pm every day and my partner do the same so when we go home we have time with our kids.
it´s hard to be unhappy about that. and you are not looked down upon if you work as a garbage collector. it´s just another job. if you are jobless it can be shameful unless you are sick and it can´t be helped. but to tell people you are employed is a little shameful. we dont like to take the money from the government without working for it, only if we have to.
i think that mentality is a good thing. i rarely see greedy danes. we are content with what we have. we dont have big dreams of owning a boat and a villa for instans. many dream of a nice quite family home.
Handling the tax through buying/selling shares is a great way we handle corruption. To us its very important that the transfer of money is not "free" but that its important what it is used for when a transfer is involved. This is the only part the free market in denmark differs from the free market in US for example, making sure dirty money stays out of the system.
I am Dane and I gladly pay tax because I provide services for what is regulated by the state and who knows that there is no one who should profit from that example in the USA education, hospitals, childcare are businesses that have to make a profit and thereby become so expensive that if you get sick or break a leg, the bill runs up to 5 - 10 years of tax you pay
Moved from NYC to Denmark. With the state and city tax and other random fees in NYC and lack of school vouchers when sending kids to a kindergarten, etc., it comes out about the same. Also keep in mind that the 55% rate is a bracket for that portion of one's income over a certain amount. Taxes are still high and restaurants are kind of expensive but the US is unfortunately not a capitalist haven anymore (That would be Hungary, Estonia or Bulgaria)
Why it works in scandinavia is because we have low corruption and high trust in how the tax money is spent, even if we know a lot of it is wastefully spent, it usually more or less trickles back as taxes anyway.
Danish Citizen here - to put in short - the high taxes are the very reason why our sociaty is rich - the richness is simply not just placed at a realtive few people, but spread out to all of us - simple as that - and the benefits that comes with that has a snowball effect - better heatlh, higher living-age, better educations, lower crime, etc. which all help producing better citizens with better jobs and better income, which then pay even more taxes, which then spread even more wealth to all of us, instead of just a few elite.
I don't think that's entirely correct. The taxes aren't used that effectively. Just look at the slow shoddy trains or abysmal mail system. Try going from Esbjerg to Aalborg. Takes forever with public transportation, its faster to go to Berlin. The high taxes discourage working and investing in the stock market. It's really hard to save up anything at all. Income inequality may look good on paper but it's not good in reality. I used to live in Germany, there I needed only half the money for food and having a car was 40-50% less expensive due to no registration tax, lower fuel costs, lower insurance costs and lower taxes and lower bills at the mechanic. In Denmark everything is extremely expensive. A haircut is twice as expensive as in Germany. Not to mention the dentists! This means that in Germany someone on a low income can live much better than someone like that in Denmark, even if the minimum wage in Denmark is higher. For the money i need for food in Denmark you can feed a small family in Germany. Particularly vegetables are incredibly expensive. Many veggies in Germany cost less than 7kr. when the same one costs 2-3x more in Denmark. A lot of food even made in Germany costs easily double than what it costs 2 hours south of here across the border. My after tax wage is NOT higher than it was in Germany. I'm therefore much much poorer and can't even afford a car or haircuts or gym membership whilst in Germany all of that was very accessible
@@nocensorship8092 Well to a certain point you're right - but we're not talking about food, fuel or car prices here, but about income tax - and that system works.
The high prices has been proven over and over agin and again that it is just the companies taking advantage of the high income people are having - they could easily cut prices - prices in the Denamrk are without doubt the highest in the wolrd, but as long as no-one (our politicians) does anything it will remain that way - and just to prove my point: The failing train and postsystem that you mention - that only started when they let private companies take over, whos only interest is making money - when it was all govement-run and tax-paid there was no problems.
That's f****** EU for you!
I live in Denmark and the only problem I have with our taxations is that we have a weigght tax on cars that end op making the ridiculesly expensive. A random car being the Hyundai Bayon advanced costs 224.995 DKK or 31.742,23 USD the same car in england is 24.649,80 USD that would also be 20,295 GBP or 174.722,48 DKK that's rougthly 50.000 DKK less and I for one wouldn't mind at least that much of the price of cars
I live in Denmark - and I pay my high tax gladly - the danish school system - is much better than the test show - in Denmark you teach children to cooperate - to work as part of a team - and to take responsibility - that's part of the danish success
I wouldn't say that. I have two daughters now 21 and 25. The group work in their school has been more focused on tugging the weakest under their wings so you don't see the problem. Example: One of my daughters were put in a group for a science project. One of the boys contributed absolutely nothing and knew nothing. At the group exam he barely said two words. He got a pass. My daughter got an 10 instead of 12, because she "failed to lift her group member" to use examiners own words.
What we've archived on the surface looks like more students passing, but in reality what we've done is hidden the problem so this boy don't get the help he really need. Also, we've taught my daughters that weak groups members is a liability and should be shunned at all costs. Real group work, IMHO is something you'll learn only on the job market.
I also live in Denmark and I don't pay my taxes gladly! The school system was horrible when I attended it in the 90's and it has only gotten worse with what the current government has slowly admitted was a failed reform. We score mediocre in PISA tests. Teach children to cooperate you say? With whom? each-other? I remember the public school in Odense to be a place with a lot of noise, bullying and plenty of time wasted, where they would be eager to slab a diagnosis on those who failed to fit in and be molded to the mindless drones they produced. Kids who hated the school (more than average) were sent off to psychiatrists. First the school psychiatrist then later an external one. I flew along those pipelines at the second step I was cleared, He is normal, but with above average intelligence, those were common among the disenfranchised kids they could not slab a diagnosis on.
I like that you write "much better than the test show" acknowledging that it is not that good in the tests. I would flip it and say that it is worse than tests show.
My whole childhood I watched my mother work hard, as well as start a company of her own, while the company prospered she could only just get by despite working long hours and having a lot of work. There were few luxuries.
I also later became self employed, and I see why. Whenever I take money out for myself tax eats away half, not to mention the 25% vat.
I would prefer it if taxes was greatly reduced in Denmark. And I frankly cant recognize most of what you are saying about teamwork and taking responsibility.
@@Sohave That is so close til my experience in the 80's. The bullying. The sense of pointless. The despair. Resignation. I was one of the fat kids and was bullied until around 6. Grade by my class mates. Then some boys in the class above took over. This was in Frederiksværk. A strong social Democrat municipal. And boy did they know how to treat someone who sticks out! Socialist always talk about "community". What they really mean is within their own ranks.
I feel unappreciated. I feel like a working animal that shall be worked to death. All the socialist proudly praise themself how much they've given to this and that group. No they haven't. It's my money they give away.
Never have I heard any of the beneficiaries of my taxes utter as mush as a thanks. Only its not enough - and "cafe latte segment".
The only one who truly have showed me kindness is those "greedy" capitalists. They thank me for my effort now and then. They care how I was doing when my dad died. I could just take the take off when needed.
The public school almost broke me.
@@yottaforce I wholeheartedly agree with your view and recognize your experiences. The social democrats feel very entitled to the wealth they rob and very unappreciative of the people who generate the wealth they are taking. I feel like becoming friends with you. we dissidents got to stick together.
I won't even bother listening because the very question is wrong. By very definition, country which collects more taxes is richer.
Also, Denmark's taxes aren't off the chart, just clear. Compare to the US where you have federal taxes, then you find out there're state taxes, municipal taxes and the whole lot more that you've never even thought about.
Danish taxes are 55 percent versus 43 percent for the US
rich is not only about money. That's why they move to Mediterranean countries as soon as they retire.
Most Dane’s don’t move to the Mediterranean. So that’s a complete falsehood. Also the ones that do - can live like kings for their worlds highest pensions in a poorer Southern European country.
@@pollutingpenguin2146 You are not telling the truth.
@@pollutingpenguin2146 Your comment at the end shows your true colors.
@@peterp4037 what are you on about? But since you’re such an expert on this, please send a link to the study you’re getting this from, that allegedly shows that all Danish pensioners move to the Mediterranean.
@@peterp4037 3000 Dane’s have retired in Spain out of 60.000 Danish retired people and 25% of those are retired in Sweden then followed by Norway and Germany. So you’re completely wrong. There are 5 times the amount of retired Dane’s living in Sweden as in Spain.
I am from the Faroe Island, alas we are a part of the Danish Kingdom, we have full control of our economy and the same currency. The taxes in the Faroes and lawes in general are more or less the same as in Denmark. The faroes has the higest GDP in the world, but beeing a part of The DK we donot figure on list of contries. The unenployment in the Faroes has been record low for about 15 years, between 1 and 2%, this has had the effect that we have many workers from asia and Polen.
But the faroes is among the most expensive contries in the world even over Norway
So if it's that easy, Why don't more countries do it?
It is necessary to have per-emptive structural reform on a regular basis for this to work in the long run. Very, very, very, very few politicians in the world are ready to take major economic pain up front i.e. before a crisis emerges. However, successive Danish Governments have done just that since the mid-1980's. An excellent example is when Denmark was the first OECD country to raise the pension age dramatically. Before mid-1980's Danish economy was in a shambles and it took almost 20 years to make it strong.
One more thing, that not all countries have such low level of corruption as Denmark. People won't be willing to pay taxes in such countries where there is no trust, and they will do some steps to avoid it and it will become worse I think. You need that trust in politics and administration to do their job relatively good.
@@kimdani1795 🤨
Denmark is cleanest country I’ve been in and the people follow rules and respect each other.
To us Danes: Jeg ville ønske alle, både røde og blå politikere, ville lære lidt mere om økonomi og se dette indslag.
Take andalusia in southern Spain. The average salary for a couple is 900 euro. The lowest income in denmark is most likely early retirement and that is 1100 euro for 1 person. Denmark does not have a minimum wage unlike most of the world. Instead the unions negotiate salary for each branch. Making sure their members can actually afford to live on 1 salary. Prices in denmark are much higher in denmark but so is the income. And that's the real difference. McDonald's tried not paying the minimum salary negotiated for that line of work. Result was the other unions stepped in. The printers would not make posters. Truck drivers would not deliver etc etc. So in the end they had no choice. The people in denmark has a strong sense of community. Together we are strong. Not as individuals. And most people negotiate salary to higher than the agreed minimum between the companies and unions. And with low unemployment that is easier. The company needs to hire but with low supply they have to add money to get a good employee. So if you say a danish person pays well around 43 percent with that low income and a couple in Spain pays 37 the Danes have much more available cash after taxes. Therefore they can afford the higher prices. And the higher taxes gives a much better safety net. Take child support. In Spain you need a very low income to qualify and only until the child turns 3 years old.. in denmark you get childsupport until the child turns 18. No matter the income for up 3 children. Another thing is. If you start your own business in denmark you only pay taxes on profit. Starting your own company in Spain will have you pay more than 300 euro per month no matter your income. And since start ups are not that profitable takes time to build a customer base many simply can't afford to stay in business in Spain until such time it actually starts turning a profit
One major thing in Denmark is the tax free money. 5,500€ roughly is tax free every year. This is distributed evenly every month, and everything you earn above this is taxed. Meaning many young people with jobs besides their education can go tax free. This encourage spending amongst that demographic. Further more, all education and health care is free, wich means Danes don't have to save for the unexpected. Again, encouraging spending
14:46 Bruh I'm dying. xD How is she moving the object around while typing and having no hands on the mouse?