Why Is Denmark So Rich Despite Huge Taxes? 

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

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.

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 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 RU-vid EVER mentions that. Very few countries have a fixed value on that.

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.

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.

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 ?)

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.

Its called subsidies, and are for sure a part of tax code...

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.

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

Denmark is pretty much perfect.

@@ElectrostatiCrow 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

@@ElectrostatiCrow Dane here. We're not perfect, far from it.

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

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!

Indeed, the danes didn't get so far yet, not at all, even the opposite encouraging workers to work more

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..

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.

🤓

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.

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?

He missed the mark on pretty much every point in the entire video.

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.

Dont quit your day job!

🇩🇰

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

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.

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..

Yeppp

Hallelujah

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?

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.

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.

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!

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.

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...

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.

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).

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

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 :)

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..

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….

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

His point wasn't that layoff expenses never come in good times, just that they always come in bad times, making the bad times worse.

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.

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 🤨

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.

You seem to forget that it matters a lot for those who have no job if they have to pay, they have no employer to do so, so yeah it makes a big difference how healthcare is paid.

In theory ( and only in theory) the perfect economy is communis. Where people receive education and jobs based on their best personal skills and receive all the items and resources they need for a good life. So in theory this one. In reality its not.

There's no such thing. A good economy is tailored to its particular circumstances, not blindly derived from some universal model.

It depends on so many things. Therefore you cannot transplant the Danish model to the rest of the world.

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.

That's what it is. I give off 40-45% of my income, to subscribe to an unfairly good safety net. My kids are guaranteed to go to school, the state will provide monthly funding for them when they move out to study extended education. Never moving away.

it is indeed an expensive all you can eat buffet. but for most it takes A LOT of the hassel away from the daily life. if you love with en you means you rarely will see any trouble and for most that os happines and more time you can spend on life, family, and what ever other things you fancy. atleast that is what i have slowly realised as a dane myself. TLDR : it is expensive yes, but man life is easy like this.

But what when you don't want anything on the buffet but still has to pay. Going to a buffet is voluntary. No one is born in a buffet and having to pay for a bunch of migrants who show up to get their share with no money to contribute. A better analogy is being a slave at a plantation. you are fed, clothed and cared for by your owners, but you have to turn in all the fruits of your labor with very little you can call your own.