Mercury Rising 鳯女

Politics, life, and other things that matter

Dean Baker Speaks.

Posted by Phoenix Woman on December 27, 2007

You listen:

Denmark Suffers From Too Many Jobs

That’s the word from the NYT. According to the article people are fleeing Denmark because of its 63 percent top marginal tax rate. The net rate of departure is supposedly 1000 people per year, approximately 0.002 percent of the population. The article tells us that this net rate actually masks a more rapid rate of departure of high-skilled people, who are being replaced by less-educated workers.

The article presents little evidence that the economy is suffering from this exodus. Denmark currently has a 3.6 percent unemployment rate. Its economy is projected to grow by 3.5 percent in 2007.


In terms of sustainability, Denmark has a budget surplus of more than 2 percent of GDP (equivalent to $280 billion a year in the U.S.) and a debt to GDP ratio of around 26 percent. Its current account surplus is also in excess of 2 percent of GDP.

In short, if Denmark is suffering because a relatively small number of highly educated workers find the tax rate too high, there is not much evidence in the data.

Foolish mortal! Everyone knows that low tax rates, especially on the rich, are the keys to prosperity! Just look at the economic powerhouses of Alabama and Mississippi! Uh, on second thought, don’t look at them.

One Response to “Dean Baker Speaks.”

  1. jo6pac said

    I read this the other the day and it’s 0 population that has caused this and the Danes like not having the extra $ of kids.

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