But the IFS says Denmark successfully collects its high top rate because it has no dodges: the rich can be taxed if reliefs are blocked.
Well, given that Danish national income tax is 3.76%, with a top rate of 15%, yes, I think that they probably can successfully impose those rates on the rich.
That isn\’t all of it of course. There\’s also the local or municipal tax. Levied at the level of the commune which can be an organisation as small as 10,000 people. Where tax raising and tax spending are subject to what I call Bjorn\’s Beer limitation.
If you know that it\’s Bjorn who spends the tax money and you know where he has a beer on a Friday night then the tax money is likely to be well spent. For if it isn\’t Bjorn\’s going to find his supping being interrupted. Such intensely local taxation, I submit, is therefore likely to allow for higher rates of government expenditure.
It\’s also worth noting that the sum of all taxes may not exceed 51.5% of total income. And that\’s including the health tax (8%) and is thus more like our system of income tax plus both sets of national insurance.
In fact, it\’s not entirely certain that the Danish rate is higher than the UK\’s…….