Sunday, December 6, 2009
Danish Taxes
According to Wikipedia, "Denmark, with a mixed market capitalist economy and a large welfare state, ranks according to one measure, as having the world's highest level of income equality. Denmark has the best business climate in the world, according to the US business magazine Forbes. From 2006 to 2008, surveys ranked Denmark as "the happiest place in the world," based on standards of health, welfare, and education." The country is also pretty high in the GDP per capita and employment rankings. It pays generous unemployment benefits, and has free universal health care.
How is this utopia paid for? What a shocker - taxes. As of 2010, the top marginal rate of 42%, and the VAT is 25% (source). What's going on here? Something's gotta give, and sure enough, something does. Young Danes are leaving in droves - leaving, that is, after getting free education, which also includes English proficiency. From the article:
"The Organization for Economic Cooperation and Development, which is based in Paris, projects that Denmark’s growth rate will fall to an annual rate of slightly more than 1 percent for the five years beginning in 2009, reflecting a dwindling supply of a vital input for any economy: labor... studies suggest that about 1,000 people leave the country each year, a figure that masks an outflow of qualified Danes and an inflow of less skilled foreign workers who help, at least partially, to offset the losses."
Who would have thought that when you tax something, you get less of it? So when you tax productive people heavily, and pay others generously not to work... Gee, this is getting complicated. This is the point at which most politicians would stick their fingers up to their elbows in their ears, yell "La-la-la-la, I cannot hear you!", and hope you buy all the BS about the joys of equality and security - which are guaranteed if you only (re-)elect them, and doubly guaranteed if you only let them tax and spend more.
As a parting note, consider that 67% is not the total tax burden you pay in Denmark. The tax rate on non-electric vehicles is 200%, as noted by Dr. Perry at Carpe Diem. There is tax on income from securities, corporate tax, and property tax.
As some poet with economic literacy (or economist with poetic talent) wrote:
Tax his land, tax his wage,
Tax his bed in which he lays.
Tax his tractor, tax his mule,
Teach him taxes is the rule.
Tax his cow, tax his goat,
Tax his pants, tax his coat.
Tax his ties, tax his shirts,
Tax his work, tax his dirt.
Tax his chew, tax his smoke,
Teach him taxes are no joke.
Tax his car, tax his grass,
Tax the roads he must pass.
Tax his food, tax his drink,
Tax him if he tries to think.
Tax his sodas, tax his beers,
If he cries, tax his tears.
Tax his bills, tax his gas,
Tax his notes, tax his cash.
Tax him good and let him know
That after taxes, he has no dough.
If he hollers, tax him more,
Tax him until he's good and sore.
Tax his coffin, tax his grave,
Tax the sod in which he lays.
Put these words upon his tomb,
"Taxes drove me to my doom!"
And when he's gone, we won't relax,
We'll still be after the inheritance tax.
However, if something cannot go on forever, it will stop (Stein's Law), and socialists always run out of other people's money.
How is this utopia paid for? What a shocker - taxes. As of 2010, the top marginal rate of 42%, and the VAT is 25% (source). What's going on here? Something's gotta give, and sure enough, something does. Young Danes are leaving in droves - leaving, that is, after getting free education, which also includes English proficiency. From the article:
"The Organization for Economic Cooperation and Development, which is based in Paris, projects that Denmark’s growth rate will fall to an annual rate of slightly more than 1 percent for the five years beginning in 2009, reflecting a dwindling supply of a vital input for any economy: labor... studies suggest that about 1,000 people leave the country each year, a figure that masks an outflow of qualified Danes and an inflow of less skilled foreign workers who help, at least partially, to offset the losses."
Who would have thought that when you tax something, you get less of it? So when you tax productive people heavily, and pay others generously not to work... Gee, this is getting complicated. This is the point at which most politicians would stick their fingers up to their elbows in their ears, yell "La-la-la-la, I cannot hear you!", and hope you buy all the BS about the joys of equality and security - which are guaranteed if you only (re-)elect them, and doubly guaranteed if you only let them tax and spend more.
As a parting note, consider that 67% is not the total tax burden you pay in Denmark. The tax rate on non-electric vehicles is 200%, as noted by Dr. Perry at Carpe Diem. There is tax on income from securities, corporate tax, and property tax.
As some poet with economic literacy (or economist with poetic talent) wrote:
Tax his land, tax his wage,
Tax his bed in which he lays.
Tax his tractor, tax his mule,
Teach him taxes is the rule.
Tax his cow, tax his goat,
Tax his pants, tax his coat.
Tax his ties, tax his shirts,
Tax his work, tax his dirt.
Tax his chew, tax his smoke,
Teach him taxes are no joke.
Tax his car, tax his grass,
Tax the roads he must pass.
Tax his food, tax his drink,
Tax him if he tries to think.
Tax his sodas, tax his beers,
If he cries, tax his tears.
Tax his bills, tax his gas,
Tax his notes, tax his cash.
Tax him good and let him know
That after taxes, he has no dough.
If he hollers, tax him more,
Tax him until he's good and sore.
Tax his coffin, tax his grave,
Tax the sod in which he lays.
Put these words upon his tomb,
"Taxes drove me to my doom!"
And when he's gone, we won't relax,
We'll still be after the inheritance tax.
However, if something cannot go on forever, it will stop (Stein's Law), and socialists always run out of other people's money.
Wednesday, December 2, 2009
Quotes of the Day
"No lesson seems to be so deeply inculcated by the experience of life as that you should never trust experts. If you believe doctors, nothing is wholesome: if you believe the theologians, nothing is innocent: if you believe the soldiers, nothing is safe. They all require their strong wine diluted by a very large admixture of insipid common sense."
"After all, the great characteristic of this country is that it is a free country, and by a free country I mean a country where people are allowed, so long as they do not hurt their neighbours, to do as they like. I do not mean a country where six men may make five men do exactly as they like. That is not my notion of freedom."
"On general grounds I object to Parliament trying to regulate private morality in matters which only affects the person who commits the offence."
"There is no danger which we have to contend with which is so serious as an exaggeration of the power, the useful power, of the interference of the State. It is not that the State may not or ought not to interfere when it can do so with advantage, but that the occasions on which it can so interfere are so lamentably few and the difficulties that lie in its way are so great. But I think that some of us are in danger of an opposite error. What we have to struggle against is the unnecessary interference of the State, and still more when that interference involves any injustice to any people, especially to any minority. All those who defend freedom are bound as their first duty to be the champions of minorities, and the danger of allowing the majority, which holds the power of the State, to interfere at its will is that the interests of the minority will be disregarded and crushed out under the omnipotent force of a popular vote."
- Robert Cecil, 3rd Marquess of Salisbury.
"After all, the great characteristic of this country is that it is a free country, and by a free country I mean a country where people are allowed, so long as they do not hurt their neighbours, to do as they like. I do not mean a country where six men may make five men do exactly as they like. That is not my notion of freedom."
"On general grounds I object to Parliament trying to regulate private morality in matters which only affects the person who commits the offence."
"There is no danger which we have to contend with which is so serious as an exaggeration of the power, the useful power, of the interference of the State. It is not that the State may not or ought not to interfere when it can do so with advantage, but that the occasions on which it can so interfere are so lamentably few and the difficulties that lie in its way are so great. But I think that some of us are in danger of an opposite error. What we have to struggle against is the unnecessary interference of the State, and still more when that interference involves any injustice to any people, especially to any minority. All those who defend freedom are bound as their first duty to be the champions of minorities, and the danger of allowing the majority, which holds the power of the State, to interfere at its will is that the interests of the minority will be disregarded and crushed out under the omnipotent force of a popular vote."
- Robert Cecil, 3rd Marquess of Salisbury.
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