A lot has been said about how socialist some European countries are. Look at Denmark and you would know why.
The Welfare State
Her Majesty Margrethe II’s Denmark has 5.5 million people, with GDP per capita of $37,000, PPPed. GDP has been growing at around 3% in real term in recent years, and unemployment has been trending down to under 4%.
Besides the wind turbines all over the country supplying 18% of energy use (above map), what sets the economy apart – as well as most other western European countries – is the heavy tax rate.
The government collects and spends almost half of the GDP. The average personal income tax rate is 40%, with the top bracket being 65% (which is facing pressure recently).
BTW, there’s also a slightly less than 1% church tax for Folkekirken members.
Free Healthcare, Free Education, and Income Equality
If that doesn’t scare you away, I should tell you where the tax hike goes.
Healthcare is free
The government foots 81% of total healthcare expenditure. You can go see a doctor for free only with your health insurance card. The healthcare expenditure per capita is PPP int’l $3349 (9.5% GDP), half of the U.S.’s $6714 (15.3% GDP), while all health indicators – health life expectancy, child health, service coverage, etc. - are equivalent to that of the U.S.
According to the Ministry of the Interior and Health, 79% of the population, more aged and of a higher rate of use of alcohol and tobacco than that of the U.S., rated the nation’s healthcare service as “very good” or “good.”
Hospitals are run by the local authorities, and drug prices are reigned in by the government’s negotiation with drug companies and encouraging competition from other EU countries. From 1988-2000, the annual increase of total health expenditure was a mere 1.6%.
Education is also free
Free schooling starts from preschool. The State Education Grant and Loan Scheme grants 18+ student DKK 4400 (above $800) per month for student living away from parents.
The Tertiary-type A (i.e., high school) graduation rates are among the highest of the developed.
More Equal Income
The Danish Gini is the lowest in all OECD countries. In comparison, China is of the Mexican level.
Is It Socialism?
It depends on your definition of socialism.
If it means high-tax-rated, state-welfare type to you, you should add $10,000 family healthcare insurance, another $5,000 education expense per child, pension, unemployment insurance, and whatnot to your tax returns, and recalculate your tax rate.
Then we can talk, unless if you are now priced out from having a healthcare plan and can’t afford sending your kids to school.
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