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The happiest taxes on earth

By Thomas Kostigen@MarketWatch May 15, 2009, 12:01 a.m. EST
SANTA MONICA, Calif. (MarketWatch) — Northern Europeans are the happiest people on the planet, according to a new survey.
The Organization for Economic Cooperation and Development says people in Denmark, Finland and the Netherlands are the most content with their lives. The three ranked first, second and third, respectively, in the OECD’s rankings of “life satisfaction,” or happiness.

There are myriad reasons, of course, for happiness: health, welfare, prosperity, leisure time, strong family, social connections and so on. But there is another common denominator among this group of happy people: taxes.

Northern Europeans pay some of the highest taxes in the world. Danes pay about two-thirds of their income in taxes. Why be so happy about that? It all comes down to what you get in return.

The Encyclopedia of the Nations notes that Denmark was one of the first countries in the world to establish efficient social services with the introduction of relief for the sick, unemployed and aged. (Link to article)

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  1. Adrian Wrigley says

    Of course Denmark is also well known for being a long-standing user of Land Value Taxation (LVT, introduced 1903). LVT has proved stable, equitable and efficient. The entire nation has just 210 tax assessors for 1.9m properties, and valuation rules have been essentially stable for 27 years. See

    Land Value Taxation ( ) allows for small government and efficient business, like in Hong Kong, or a larger, high-value government like in Denmark.

    So whenever there’s a debate about low vs. high taxes, remember it’s much more to do with the type of tax than the level. Any nation with efficient taxation of business needs to be aware that the effect is to create high economic rents on land. High land rents result in housing/credit bubbles. Iceland and Ireland have had more than their fair share of this problem – and it is entirely preventable with Land Value Taxation. Compare Germany to the UK. Or Texas to California. Iceland to Hong Kong. See policy papers on Fred Folvary’s site or the material at Professor Mason Gaffney’s informative site

    The evidence is strong. Bad Taxes -> Sad people. Good Taxes -> Happy people!