Danes, the happiest people in the world?

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Danes, the happiest people in the world?

Post by Henrik on Tue Oct 19 2010, 10:27

I have recently been studying the tax system in Denmark as presently my work is focused there. As soon as I started getting involved in this, I was asking people to explain to me how the tax system worked, what were the various taxes etc., and everybody would tell me that it is just too complicated and we must have an external person handle it.

Now I don’t mind outsourcing tasks, particularly when it comes to taxes in a welfare state like Denmark, but I hate not understanding something that I am working with. I want to be able to be sure that the people I have outsourced a task to are doing things properly.

So, I began digging more and more in the jungle that is the Danish tax system. I say jungle, but it should be more impenetrable, suffocating, tropical, the worst, thickest fucking rainforest you could ever imagine…and then some. I have felt physical sick at times while reading about how much people are taxed, and to see that the people having written the articles actually are proud of the tax system they have put in place.

Just to give you an initial example, or a teaser if you like, here is an extract about not properly declaring income to your private small business:

In your private independent business, you have declared an annual income of DKK 300’000 ($55’000). However, you have omitted an additional income of DKK 100’000, which would have brought the total income to DKK 400’000.

If the omission was deliberate, it will cost you:

DKK 46’857 Tax on the DKK 100’000
DKK 8’000 Labour tax
DKK 25’000 VAT
DKK 90’000 Fine

So, in trying to save DKK 79’857 in taxes, you end up paying DKK 169’857.

If the omission was accidental, it will cost you:

DKK 46’857 Tax on the DKK 100’000
DKK 8’000 Labour tax
DKK 25’000 VAT
DKK 46’000 Fine


So, by making a mistake you end up paying DKK 125’857 instead of DKK 79’857

Now reading this text, what was the first thing that struck you? How the fuck can any private business ever develop when your income is taxed 80%? How can anybody find in themselves the motivation to go through the stress and hard work to set up and run a private business, so that 80% of what you manage to earn from your labour goes to the state? It’s not like these are huge income earners either.

As much as it may seem impossible, it gets worst.

So, you want to buy a car, nothing flashy, just an ordinary compact commuter car. This is how the car price breaks down for you:

Car Price $ 15’800
VAT 25% $ 3’950
Tax exceeding 14’200 180% $ 9’990
Tax below 14’200 105% $ 14’910

Net Price $ 44’650

So a car with a sticker price of $15’800 will cost you $ 44’650 in Denmark after taxes.

I could also go in to detail on how your normal salary is being taxed. Given that the employee ends up with a tax burden that quickly gets close to 60%, and the employer also then has to pay various social charges of around 45%, when an employee ends up with $44’000 in his bank account, the state gets $ 115’500.

Let’s then say he used those $ 44’000 to buy a car, the final situation looks like this:

Employee has a car and $ 0
The state gets $144’350

Oh yeah, and the employer is obviously the one who paid out the money in the first place, after having paid the earlier mentioned 80% tax on his company earnings.

Let’s then say that over the years as you slaved away working for the state, you were able to save some money in a pension account for your retirement. By the time you reach your retirement, and the accumulated savings is paid out, this payment will be subject to 40% tax. That is after any gain generated in the account over the years has already been subject to an annual capital gains tax of 15% (which is considered extremely good since capital gains in normal accounts is taxed 28%). Obviously whatever you might buy with what remains of these savings is then subject to the 25% VAT.

What I really don’t get is that I read an article recently about a survey that found the Danes to be the happiest people in the world. I think I might actually become violent if I had to live in a system like that…


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Re: Danes, the happiest people in the world?

Post by TopContender on Tue Oct 19 2010, 13:00

Threethings:
1. They are used to the system, and are brainwashed into thinking it is the best.

2. Both the businesses and people get the cash back in welfare plans or stimulus packages.

3. Everyone cheats the system, and never declares the full amount.
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Re: Danes, the happiest people in the world?

Post by gueuzeman on Tue Oct 19 2010, 13:05

If you would like, I would be happy to accompany you on a fact finding mission to Denmark, financed, of course, by your bank. It will be subjecteted to a 200% gueuze tax payable in 33cl units of Carlsberg.

.
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Re: Danes, the happiest people in the world?

Post by Henrik on Tue Oct 19 2010, 13:15

Hey Gueze, the Tuborg Classic they serve on tap locally is much better than Carlsberg. It's actually one of my favourite beers, so I suppose the Danes do have something to be happy about!

TC, small private business don't get much back in stimulus or incentive packages, and for the individuals it is really only low income earners that get something back. For the rest, the only noteworthy thing they get is health insurance, but even there many are paying for private supplementary coverage.

As to cheating, well it is fairly hard and severely punished. Obviously there is no such thing as banking secrecy, and in fact if you happen to be investing in securities it is the central clearing organization that reports your annual activity straight to the tax authorities.

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Re: Danes, the happiest people in the world?

Post by TopContender on Wed Oct 20 2010, 01:48

Then they are brainwashed retards. Looks at the fools who get their homes destroyed by tornados or hurricanes and rebuild every year. You can look at Naples Italy and see the fools build homes one the same volcano that buried Pompeii.
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Re: Danes, the happiest people in the world?

Post by H8R on Wed Oct 20 2010, 02:32

My Family is from Napoli.
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Re: Danes, the happiest people in the world?

Post by gueuzeman on Wed Oct 20 2010, 03:14

I guess they were smart enough to leave.
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Re: Danes, the happiest people in the world?

Post by H8R on Wed Oct 20 2010, 04:28

gueuzeman wrote:I guess they were smart enough to leave.

We don't get called smart a lot either. Very Happy
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Re: Danes, the happiest people in the world?

Post by Srrh on Wed Oct 20 2010, 12:04

Funny.

On the Index of Economic Freedom 2008, Denmark's rating is 11th highest of 162 countries (4th in Europe).

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Re: Danes, the happiest people in the world?

Post by Henrik on Wed Oct 20 2010, 13:15

Srrh wrote:Funny.

On the Index of Economic Freedom 2008, Denmark's rating is 11th highest of 162 countries (4th in Europe).


Well, not really that funny. Fiscal freedom is only one of 10 criteria used to determine the economic freedom, and out of the top 33 countries Denmark scored the second lowest figure for fiscal freedom only beaten by Sweden.

For sake of comparison, the top country in the index is Hong Kong scoring a fiscal freedom figure of 92.8. Denmark's score was 35...


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Re: Danes, the happiest people in the world?

Post by Gelert on Wed Oct 20 2010, 19:59

Henrik wrote:a fiscal freedom
It sounds like an ice-cream...


Last edited by Gelert on Wed Oct 20 2010, 20:01; edited 1 time in total (Reason for editing : Damn thing tried to tell me that I was quoting Srrh, not Henrik. My PC might have just turned into a Mac...!)

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