Denmark as a Model for American Socialists? by Lars Hedegaard

There are unique reasons why Denmark’s political arrangements work. From Lars Hedegaard at gatestoneinstitute.org:

  • Danes actually pay for their brand of socialism through heavy taxation. In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high. If you receive public support and are of working age and healthy, the state will require that you look for a job or it will force a job on you.
  • In Denmark, it is uncomplicated for enterprises to fire workers, which gives them great flexibility to adapt to shifting market conditions. In fact, Denmark is more free-market oriented than the US.
  • “Very high taxes and the vast public sector clearly detract in the capitalism index and reduce economic freedom. But Denmark compensates by… relatively little regulation of private enterprise, open foreign trade, healthy public finances and more. This high degree of economic freedom is among the reasons for Denmark’s relatively high affluence.” — Mads Lundby Hansen, chief economist of Denmark’s CEPOS think tank.

Here are some facts to consider before American “democratic socialists” look to Denmark for guidance, as Senator Bernie Sanders did during the 2016 presidential campaign.

First of all, Danes actually pay for their brand of socialism through heavy taxation. In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high. If you receive public support and are of working age and healthy enough to work, the state will require that you look for a job or it will force a job on you.

The willingness of all the Danes to pay high taxes is predicated on the country’s high degree of homogeneity and level of citizens’ trust in each other, what sociologists call “social capital.” By and large, Danes do not mind paying into the welfare state because they know that the money will go to other Danes like themselves, who share their values and because they can easily imagine themselves to be in need of help — as most of them, from time to time, will be.

To continue reading: Denmark as a Model for American Socialists?

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