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Anorak | Polly Toynbee on the terrors of the tax system – Denmark is cheaper than the UK

Polly Toynbee on the terrors of the tax system – Denmark is cheaper than the UK

by | 18th, June 2013

POLLY Toynbee has decided to have a good old rant about the iniquities of the UK tax system. It’s all terrible that we cannot actually manage to take all that cash off the rich. Where do they think they are, in a free society or something?

And then she says this:

But the IFS says Denmark successfully collects its high top rate because it has no dodges: the rich can be taxed if reliefs are blocked.

A fascinating example. Because the top Danish income tax rate isn’t high at all. It’s 15%. And the basic rate is 3.76%. I don’t think we’d have any trouble at all in being able to collect those sorts of rates in the UK.

Now it’s true that there is also more to the Danish tax system than just those income tax rates. There’s a flat 8% of income in the health tax. Note that this is a flat rate tax, not a progressive one. And there’s also the local tax paid to the commune. This ranges from 22 to 29 percent. That’s also a flat rate tax, not a progressive one.

When you add all of these together and you compare it to all of our taxes together (income tax, employers’ and employees’ national insurance) then you find that the Danish top rate of 51.5% is actually lower than the UK’s just a smidgeon under 54%.

Denmark finds it easier to collect their top taxes because their top tax rate is lower than ours. Now, there’s a surprise, isn’t it?



Posted: 18th, June 2013 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink