Senator Sanders likes to Tweet that the United States is the richest country in the world and thus can afford to provide extensive social programs emulating Scandinavian countries.
Senator Warren Tweets that corporations and billionaires do not pay their fair share and thus deprive us of the expanded social programs we deserve.
I’ll leave you to decide if these individuals are sincere with their rhetoric or playing divisive politics. Or, are they simply ignorant of the facts… not likely IMO.
The really sad thing is that many Americans believe their promises including that only others will foot the bill and that average Americans can escape higher taxes.
One thing is very clear, they are unfairly misleading Americans. Scandinavian citizens knowingly trade discretionary income for social benefits. They pay much higher income taxes, higher payroll taxes and consumption taxes in the form of value added taxes (VAT).
The United States is one of the lowest taxed developed countries in the world.
If Americans were aware of the accurate story of taxes and social benefits, would they make the choice to trade more of their income for government benefits? That’s the question we should ask the good senators and all other progressives.
Scandinavian countries are well-known for their broad social safety net and their public funding of services such as universal health care, higher education, parental leave, and child and elderly care. High levels of public spending naturally require high levels of taxation. In 2019, Denmark’s tax-to-GDP ratio was at 46.3 percent, Norway’s at 39.9 percent, and Sweden’s at 42.8 percent. This compares to a ratio of 24.5 percent in the United States.
So how do Scandinavian countries raise their tax revenues? A first breakdown shows that consumption taxes and social security contributions—both taxes with a very broad base—raise much of the additional revenue needed to fund their large-scale public programs.