How to Tax Like Denmark

If Democrats want to build a generous welfare state like Denmark’s — and they should! — they’ll have to find a way to convince most Americans to pay higher taxes. Because the political willpower for higher middle-class taxes currently does not exist, Democrats instead rely on tax hikes exclusively on the rich, which helps, but doesn’t provide enough potential revenue to fund a full-scale social democracy. One partial solution to this problem is to increase revenue through public health-related taxes on things like tobacco or sugary soda. I recently pointed out the oddity of Bernie Sanders’s opposition to such a tax, given that Sanders is a proponent of both a Danish-style social democracy in general and a health care plan that raises taxes on low-income earners in particular. Matt Bruenig takes issue, focusing on the question of how much higher taxes are in Denmark. I wrote that the Danes “do not tax the rich all that much more heavily than the United States does.” Bruenig counters, “This is simply untrue. The Nordic countries do tax the rich much more heavily than the US does.”