Denmark to reform its costly social security system

Denmark boasts generous social system, low unemployment rate as well as prospering economy. Nevertheless, the country’s government finds it necessary to make cuts to its fabled welfare programs to finance a major round of income tax cuts.

Denmark posts the highest tax burden of all OECD member states, accounting to ca 50% GDP. “We want to promote a society in which it is easier to support yourself and your family before you hand over a large share of your income to fund the costs of society,” Prime Minister Lars Lokke Rasmussen said. At present, the income tax has two components, the central and the local one, amounting to as much as 15% and 20 to 27%, respectively. Employees are also obliged to pay health and social insurance, with no employer contributions being part of the system.

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31. 10. 2017