You often hear the Right talk about the high taxes in Scandinavia as being 60% of one's income or half a person's income.

But, the problem is the way these people look at taxes.

What we should look at is the effective tax rate, not marginal tax rates as the Right does. The effective tax rate is a person's total tax per year divided by the gross income.

According to Wikipedia, a Swedish person earning $60k per year has an effective tax rate of 31%. This means that only 31c of each $ is paid is tax.

Far cry from the 'half of one's income' isn't?

In Australia, the effective tax rate of a person on $60k is about 20c on the dollar. But if you add in private health insurance premiums, then it's about 25c on the dollar (after all, Private Health Insurance premiums are simply a form of private taxes).

Many libertarians argue that a person should pay no more than 20c on the dollar in tax, which is precisely what Australians pay. Scando citizens pay 30c on the dollar but receives more social benefits than we do - they get fully subsidised (not free) university education, free-at-the-point of service healthcare, and generous maternity leave.

For an extra 10c on the dollar, wouldn't it be worth getting all those extra benefits, and perhaps even increasing Newstart allowance too?

Auggie wrote on Jan 3^rd, 2020 at 4:58pm:


Also worth mentioning, although i'm unsure of which particular countries to which this applies, but in some Scando nations, there is no private schooling. Public schools require no competition.

And it's all free.

And generally, the outcomes in Scandinavian countries are better for their citizens. Lower crime, recidivism, suicide rates, substance dependency, homelessness, etc and they live longer, happier lives.

Even though, go figure, there's loads of smokers.

freediver wrote on Jan 3^rd, 2020 at 7:04pm:


Rubbish. People will take higher incomes even if it means a higher marginal tax rate.

freediver wrote on Jan 4^th, 2020 at 11:43am:


This is a bullshit example. No one is proposing nor has ever proposed the tax scheme you are suggesting. You are using an extreme and non-practical example to try an illustrate your point.

Auggie wrote on Jan 4^th, 2020 at 2:15am:


People don't work too much overtime because they lose nearly half in tax.

I certainly wouldn't be looking at a higher salary if it meant longer hours, a higher marginal rate & losing the majority in tax because it puts you in a higher tax bracket.

Yes the average tax rate is 20.41% but your marginal tax rate is 34.50%.

Taht's higher tan 31% no?

My cousin's lived in Denmark for over forty years.  He retired a few years ago.  Emailed to laughingly say he was now a 'millionaire' in his currency, which didn't amount to that much in ours, via his retirement package

I didn't know much about Denmark's situation, retirement-wise, so went online where it said the tax demanded on purchase of a new car, for example, was very much higher than ours (for example).  What I read claimed that although Danes pay very high tax, their standard of living rewards it: hospital and medical, education, welfare, pensions, etc.

So now OP is claiming non of what I read in material from outside Australia, is untrue?  And that my cousin was for some reason lying? 

PZ547 wrote on Jan 4^th, 2020 at 12:50pm:


It seems that you've misunderstood what I've said.

In Denmark their marginal tax rates over a certain amount of income is more than 50% but the overall EFFECTIVE tax rate is less than 50c on the dollar.

What I'm saying is that when people say that Danes pay 60% of their income on taxes, that is simply not true. Those who earn around 200k per year would pay around 45c per dollar on tax, which is consistent with the principle of a progressive taxation system.

freediver wrote on Jan 4^th, 2020 at 1:17pm:


You've just proved my point.