4 ms·

I agree that too many people are employed by the public sector. This number grew rapidly in the 1970s, but has continue to grow (although much less) steadily si

I agree that too many people are employed by the public sector. This number grew rapidly in the 1970s, but has continue to grow (although much less) steadily since. http://punditokraterne.dk/2012/06/22/offentligt-ansatte-1970-2012/ http://punditokraterne.dk/2012/06/22/offentligt-ansatte-1970... Do you mean that the danish "model" is broken, because the public finances run with a deficit and/or because of unemployment? It is still not obvious for me what you mean by broken. Since the number of people employed in the public sector hasn't increased by more than around 10% since the 1980s, and the unemployment rate is now actually relatively low (5.8%), one could argue that the model really does work. It hasn't crashed over a period of 30 years. Public spending was excessive during the 2000s, so the "model" does need some refinement, and will like continue to undergoing constant refinement as the economy fluctuates. The unemployment rate is currently dropping, and it is lower than e.g. UK (5.8% vs. 7.7%) and certainly Southern Europe. Unemployment is a reoccurring problem in a historical sense, and a much bigger problem in most of the world than Denmark. People everywhere struggle to find jobs as a consequence of increased automation. Especially, uneducated people. Denmark is running with a deficit at the moment, but there have been years with surplus too. Of course, that could be explained by the income generated from natural resources (oil+gas), just as the deficit could be explained by fluctuations in the world economy. The deficit in 2013 is expected to be 1.2% of GDP which isn't bad compared to everywhere else. National debt compared to GDP is higher in many countries: http://www.economicshelp.org/blog/774/economics/list-of-national-debt-by-country/ http://www.economicshelp.org/blog/774/economics/list-of-nati... Another point you mention is that it is hard to grow a company because of lack of ambition in Denmark. It is hard to grow a company in Denmark, but I personally consider high salaries as a bigger problem than lack of ambition. On a positive side, because there is very good support for unemployed people, Danish employment laws are less restrictive than many countries, making it much easier for companies to hire and fire their employees. Flexibility is very good thing for a company that wishes to grow. If you say automation is making it hard for people to find a job, what do you propose as an alternative to educating people (you mention a large part is overeducated)? Lowering taxes for corporations was a ridiculous idea. It is higher almost everywhere else, and nobody could give a compelling argument for lowering it. http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates Corporate tax is paid of the profit, before the profit is distributed to its shareholders. 3 percentage points lower tax of dividends, before income tax, will not change much for the shareholders of Danish corporations. You also haven't pointed to a country with a model you feel is working better.

ThomPete 13y ago
I am not sure why you insist on answers based on your claim that Denmark is currently doing better than others. That was not the point. The article portrays Denmark as having no issues what so ever and a financially sound political model for the future. What is broken is a lucrative and ineffective welfare system and the size of the public sector as it is primarily based on the income of the private sector. With the majority of taxes being paid through income tax and with the number of private sector jobs disappearing and not enough new companies becoming growth companies, with a demographic structure requiring more from less and with a job market that is structurally in trouble (hidden for now by redistribution) it is bound to be trouble. Lowering the taxes for corporations was not meant as anything but following the competition, there is nothing wrong in that. It's neither a smart move or a stupid move, it's just what you do if you don't want to add to the amount of jobs disappearing. There really isn't anything to do by the state for those who have trouble finding jobs. There isn't some boom waiting in any foreseeable future. It's structural these days baby. I don't find any of the current models working, but I am also more pessimistic about automation than most people.
mseebach 13y ago
> Lowering taxes for corporations was a ridiculous idea. It is higher almost everywhere else, and nobody could give a compelling argument for lowering it. That's clearly your opinion and you're entitled to it, but please don't state it as fact, that's just dishonest. > Corporate tax is paid of the profit, before the profit is distributed to its shareholders. 3 percentage points lower tax of dividends, before income tax, will not change much for the shareholders of Danish corporations. No, it's paid of the profit at the end of the year, no matter what you do with that profit, including investing it next year or putting it into a rainy-day fund. > You also haven't pointed to a country with a model you feel is working better. Who said he had to? Why is it a premise for debate that there is a perfect country somewhere else that's working better? But Sweden.
- joakleaf 13y ago
  It is true that you can save up the profit for next year (a rainy day as you say), but that doesn't create growth or benefit society. In a sense if you have a higher corporate tax there is a larger incentive to spend that money in the same year on new hires, equipment, or assets. So you could argue that a larger corporate tax create more growth... However, that's just speculation on my part. That lower corporate taxes doesn't benefit society wasn't actually my viewpoint, but it has been addressed quite a lot in the media. I should have pointed to some references. My bad: Here is one from 2010. http://www.b.dk/danmark/eksperter-lavere-selskabsskat-har-lille-effekt http://www.b.dk/danmark/eksperter-lavere-selskabsskat-har-li... Two professors (one from Copenhagen Business School) and one from University of Århus states that it will have little impact. Or a survey from business (67% of business don't think it will have an effect): http://www.advodan.dk/nyheder/2013/4/7-ud-af-10-virksomheder-tror-ikke-paa-lavere-skat-som-vej-til-vaekst/ http://www.advodan.dk/nyheder/2013/4/7-ud-af-10-virksomheder... It has also been discussed in America: http://business.time.com/2012/02/23/will-a-lower-corporate-tax-rate-lure-jobs-back-to-america/ http://business.time.com/2012/02/23/will-a-lower-corporate-t... I actually asked earlier if he could show me an example of a country with a better model to better explain in what sense the Danish model is "broken". Isn't the Swedish "model" almost identical to the Danish "model"?

ThomPete 13y ago

I am not sure why you insist on answers based on your claim that Denmark is currently doing better than others. That was not the point. The article portrays Denmark as having no issues what so ever and a financially sound political model for the future. What is broken is a lucrative and ineffective welfare system and the size of the public sector as it is primarily based on the income of the private sector. With the majority of taxes being paid through income tax and with the number of private sector jobs disappearing and not enough new companies becoming growth companies, with a demographic structure requiring more from less and with a job market that is structurally in trouble (hidden for now by redistribution) it is bound to be trouble. Lowering the taxes for corporations was not meant as anything but following the competition, there is nothing wrong in that. It's neither a smart move or a stupid move, it's just what you do if you don't want to add to the amount of jobs disappearing. There really isn't anything to do by the state for those who have trouble finding jobs. There isn't some boom waiting in any foreseeable future. It's structural these days baby. I don't find any of the current models working, but I am also more pessimistic about automation than most people.

mseebach 13y ago

> Lowering taxes for corporations was a ridiculous idea. It is higher almost everywhere else, and nobody could give a compelling argument for lowering it. That's clearly your opinion and you're entitled to it, but please don't state it as fact, that's just dishonest. > Corporate tax is paid of the profit, before the profit is distributed to its shareholders. 3 percentage points lower tax of dividends, before income tax, will not change much for the shareholders of Danish corporations. No, it's paid of the profit at the end of the year, no matter what you do with that profit, including investing it next year or putting it into a rainy-day fund. > You also haven't pointed to a country with a model you feel is working better. Who said he had to? Why is it a premise for debate that there is a perfect country somewhere else that's working better? But Sweden.

joakleaf 13y ago
It is true that you can save up the profit for next year (a rainy day as you say), but that doesn't create growth or benefit society. In a sense if you have a higher corporate tax there is a larger incentive to spend that money in the same year on new hires, equipment, or assets. So you could argue that a larger corporate tax create more growth... However, that's just speculation on my part. That lower corporate taxes doesn't benefit society wasn't actually my viewpoint, but it has been addressed quite a lot in the media. I should have pointed to some references. My bad: Here is one from 2010. http://www.b.dk/danmark/eksperter-lavere-selskabsskat-har-lille-effekt http://www.b.dk/danmark/eksperter-lavere-selskabsskat-har-li... Two professors (one from Copenhagen Business School) and one from University of Århus states that it will have little impact. Or a survey from business (67% of business don't think it will have an effect): http://www.advodan.dk/nyheder/2013/4/7-ud-af-10-virksomheder-tror-ikke-paa-lavere-skat-som-vej-til-vaekst/ http://www.advodan.dk/nyheder/2013/4/7-ud-af-10-virksomheder... It has also been discussed in America: http://business.time.com/2012/02/23/will-a-lower-corporate-tax-rate-lure-jobs-back-to-america/ http://business.time.com/2012/02/23/will-a-lower-corporate-t... I actually asked earlier if he could show me an example of a country with a better model to better explain in what sense the Danish model is "broken". Isn't the Swedish "model" almost identical to the Danish "model"?