Bernie Sanders thinks we should be more like Denmark. Hillary Clinton doesn’t buy it. "We are not Denmark” she says, “…we are the United States of America.” What’s so special about Denmark?
The many attractions of Denmark include a generous safety net that provides unemployed workers 90% of their old salary up to 2 years. Parents receive up to 52 weeks of leave per child and daycare is heavily subsidized. Overall, working-age families receive more than three times as much aid, as a share of G.D.P., as their U.S. counterparts. Danes enjoy the world’s shortest work week and have the right to 5 weeks of paid vacation a year. College students not only have free tuition but get a stipend of over $900 a month. Denmark’s chronic poverty rate is just .6%, while it’s 2.7% in the US. Per-capita income in Denmark is higher, and income inequality much lower, than in the US. Plus, the Danes are the third happiest in the world (after Switzerland and Iceland). What’s not to like?
For starters, all this Danish largesse is paid for by very high taxes. Denmark has one of the highest individual tax burdens in the world. And its tax system is much less progressive than what we have in the US: whereas the US top marginal income tax applies to income over 8.5 the average income, in Denmark the top rate (59%) applies to all income over 1.2 the average income. The lowest individual tax rate is 37%. Denmark’s Value Added Tax is another 25%. Then there are special fees and taxes, like the 180% tax on cars. In Denmark, all those government benefits aren’t really “free” – they’re funded by taxes, paid mostly by the middle class.
Coming next: exploration of the Denmark model, the Denmark reality, and how this all relates to the US.