Wednesday, August 5, 2015

Sleight of Nordic-hand

Once upon a time in Scandinavia you saw the tax (often as a direct deduction from your paycheck), so to raise those taxes, substantially, to fund the welfare states, those governments had to hide what they were doing;
Finland is worth considering as an example. The country's tax level was 30 per cent of GDP in 1965. Indirect taxes in the form of VAT and mandatory social security contributions [often 'on the employer'] amounted to 8 per cent of GDP. In 2013 the total tax take had increased to 44 per cent of GDP, while indirect taxes had risen 22 per cent ....
To go from 30% to 44% is a nearly 50% increase in the tax burden on Finland's population! A raise from 8% to 22% is a near tripling of the level of deception. Over roughly the same time period; Denmark the total tax take rose from 30 to 49 per cent of GDP, while indirect taxation increased from 4 to 10 per Norway the corresponding figures are 30 per cent and 41 per cent for total taxation and 4 and 18 per cent for indirect taxation...lastly in Sweden the total level of taxation rose from 31 to 43 per cent of GDP while indirect taxation went from 4 to 19 per cent....
These figures come from, of course, Nima Sanandaji's book, Scandinavian Unexceptionalism. Which, based on the evidence so far, is rather an ironic title.

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