Noodling around about something else I found out what the national income tax rates are in Denmark.
For such a highly taxed country they seem just fine really.
After the personal allowance (about £5k) the national income tax is 3.76%.
Yes, that\’s 3.76%, not 37.6%.
Over around £40,000 that national income tax rate goes all the way up to 15%.
I think we could live with those sorts of tax rates, couldn\’t we?
Yes, there\’s also something akin to national insurance, at 8%.
Sweden\’s system isn\’t all that different either (they add in a 25% national income tax rate).
So, err, why don\’t we become more like the Nordics?
The kicker is, of course, that in both countries there are quite high municipal amd county taxes on income: some 22-35% depending.
So the total tax rate is indeed high….but the great bulk of the money is raised locally and spent locally: the national government seems only to be taxing for what the national government must do rather than centralising everything, both revenue collection and disbursement of the funds.
While I\’m not all that keen on such high tax rates, the basic idea of the system seems like a great idea to me. Raise locally what is to be spent locally, raise nationally only that which must be spent nationally.
I know Polly\’s shouted about the iniquity of local income taxes before but why don\’t we be more like the Nordics?