Facts and data inside: how scandinavia pays for their healthcare

The next time bernie or another lemming says the middle class would not need to contribute anything for it to work:

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However, the rates are not necessarily the most important feature of the Scandinavian income tax systems. In fact, the United States’ top marginal income tax rate is higher than Norway’s and only 18 percent lower than Sweden’s, yet raises 40 percent less income and payroll tax revenue than Norway and 50 percent less than Sweden.

Scandinavian income taxes raise a lot of revenue because they are actually rather flat. In other words, they tax most people at these high rates, not just high-income taxpayers. The top marginal tax rate of 60 percent in Denmark applies to all income over 1.2 times the average income in Denmark. From the American perspective, this means that all income over $60,000 (1.2 times the average income of about $50,000 in the United States) would be taxed at 60 percent.

Sweden and Norway have similarly flat income tax systems. Sweden’s top marginal tax rate of 56.9 percent applies to all income over 1.5 times the average income in Sweden. Norway’s top marginal tax rate of 39 percent applies to all income over 1.6 times the average Norwegian income

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You are reading that chart correctly: if you make 1.5 times the national average income, which is as middle class as you can be, you are paying a 57% marginal tax rate. 57%

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In addition to the high payroll and income taxes, all Scandinavian countries collect a significant amount of revenue from Value-added taxes (VATs). Value-added taxes are equivalent to sales taxes, but levied on businesses throughout the production process. As a tax on consumption, VATs are economically efficient: they can raise significant revenue with relatively less harm to the economy. However, many (especially in the United States) see VATs as a regressive tax because they fall more on those that spend a larger share of their income, mainly the poor.

Denmark collects about 9.6 percent of GDP through the VAT, Norway collects about 7.8 percent, and Sweden collections about 9 percent of GDP. All three countries have VAT rates of 25 percent. The United States does not have a national sales tax or VAT. Instead, states levy sales taxes. The average rate across the country is about 7 percent. The much lower rate only collects about 2 percent of U.S. GDP in revenue.

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A VAT tax is a sales tax on steriods.


BTW, when it comes to specifically targeting the rich, bernie's utopias don't do it much more than we do.

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Finally, it is worth noting that the only Scandinavian country with an estate or inheritance tax is Denmark.

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A lot of the spending-side programs in Scandinavian countries cost a lot. Taxes would definitely need to be increased in the United States if it were to adopt them. If the U.S. were to raise taxes in a way that mirrors Scandinavian countries, taxes—especially on the middle-class—would increase through a new VAT and high payroll and income taxes. Business and capital taxes wouldn’t necessarily increase, in fact, the marginal corporate income tax rate would decline significantly.

It isn’t a mistake that taxes in Scandinavian countries are structured this way. In order to raise a significant amount of revenue, the tax base has to be broad. This means higher taxes on consumption through the VAT and higher taxes on middle-income taxpayers through high payroll taxes. Business taxes are a less reliable source of revenue (unless your country is situated on top of oil). Thus, Scandinavian countries do not place above-average tax burdens on capital income and focus taxation on labor and consumption.

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The fact of the matter is that bernie sanders is smoking dope when he says he can provide healthcare to everyone at no point of delivery cost solely on the backs of "the rich".

No european country pays for healthcare that way.