Nordic Countries Do Not Mean Big Government Or High Corporate Taxes

All Nordic countries’ corporate tax rates are lower than the average European Union and United States’ rates. In 2020, with Denmark and Norway at 22%, Finland at 20%, and Sweden at 21.4%. The U.S. tax rate on corporations is slightly higher at 25.8% (federal and state combined).

Capital gains and dividend taxes are also in line with the rest of the European Union and the United States.

Norway’s top personal tax rate of 38.2% is lower than the United States’ 43.7%. However, Scandinavian countries tend to impose the top personal income tax rates on up and middle-class earners, not just high-income taxpayers.

Nordic “high taxes” come mostly from high VAT & social security taxes, not business or capital taxation, which is lower than in many developed economies. As the study “Insights into the Tax Systems of Scandinavian Countries” by Elke Asen points: “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 higher social security contributions. Business and capital taxes would not necessarily need to be increased if policymakers were following the Scandinavian model”.

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