Debunking The Northern European “Socialism” Myth

Debunking The Northern European “Socialism” Myth

Something we hear very often from left leaning politicians in the United States is the push towards “Democratic Socialism.” Often, they refer to Northern European countries such as Sweden, Denmark, etc. Let me make one thing clear first, there is no such a thing as “Democratic Socialism." In Socialism, there is no Democracy. The state owns and controls all assets of production.

One of you sent me a post from a girl that lives in Denmark where she writes how she is happy to hand over 42% in taxes to her government. So, in return they provide safe and clean transport, free healthcare, a year of paid maternity leave, 1000+ dollars every quarter to help with child things (such as diapers, clothes, etc.), free dentistry up to 18 years old, and more. Then, she added how Democratic Socialism "isn’t that bad."

Now, here are the things she forgot to mention. 

First, the United States and Denmark cannot compare. Denmark is a tiny little country (5.8 million) with very strong borders and strict immigration policies. Their economy and population are relatively very homogeneous compared to United States. United States is a massive republic in which the federal government shares power with the states AND the state’s share power with local county and city governments. 

Let’s look at how much a family in Arkansas pays in taxes comparison to Denmark.

In the United States we have many layers of taxes that we pay, not only federal tax, but state tax, social security & Medicare tax.

Let’s take an example of a family of four in Arkansas that owns a small business and has taxable income of $75,000 a year!

Their federal income tax is at 22%, they are paying both parts of Medicare and Social Security roughly 16%, and the state of Arkansas adds another 6% tax.

They will be paying a total of 44% in taxes. 

We do have a graduated federal tax table based on income.

Federal, Social Security, Medicare and Arkansas State taxes are all flat taxes.

This means their entire income of $75,000 is taxed at 22% for these three taxes.

The total federal income tax for this family based on federal tax table is going to be

$12,300 in federal taxes, and an additional $16,500 in Social Security, Medicare and State Taxes... for an effective rate of 38.4%. And for all that, they don’t get any benefits she mentioned they get in Denmark. 

This also doesn’t include sales tax, property taxes, franchise taxes, regulatory taxes, etc.

The amount you pay in federal tax is obviously different depending on how much you make per year... as well as the state tax is different depending on which sate you live in... as well as if you own a business or you are an employee... In California, for example, it's 13% just for state tax.

Besides the facts that Denmark is a tiny little country in population, and in terms of their geographic size with strong borders and strict immigration policies, another reason Denmark can afford a large welfare system is because they have largely outsourced their national defense to the USA via military alliances.

Another thing to note, Northern European countries such as Denmark, Sweden, Norway, etc. have been cutting corporate tax rates significantly for the last 20 years to attract business and innovation. 

I believe the Prime Minster of Denmark said publicly that they are "not a Socialist” country, but a capitalist country with a mixed economy."

Read the article here. (linked)

Another important thing to note:

More than 750,000 thousand immigrants get naturalized each year in the U.S. and more than 1 million immigrants arrive in the U.S. each year. In 2018, the top country of origin for new immigrants coming into the U.S. was China, with 149,000 people, followed by India (129,000), Mexico (120,000), and the Philippines with 46,000 people arriving in the U.S. each year. This does not include illegal immigration. 

The United States has more immigrants than any other country in the world. Today, more than 40 million people living in the U.S. were born in another country. We are one-fifth of the world’s TOTAL migrants. The population of immigrants is also very diverse, with just about every country in the world represented amongst U.S. immigrants.

Now, let’s look at Denmark.

Denmark has 42,000 legal immigrants living in their country in 2021 - less than 0.8% of their population. The United States has 42 million legal immigrants which is 12.73% of the population. If Denmark took the same percentage as the United States of immigrants, relative to their population, and had to spend proportional amounts of their budget on defense system, their large welfare system would collapse. It might work for them today, and they might be okay paying those kinds of taxes, but, if their population increases and becomes more diverse, they are going to start running into issues!

The United States will never be able to replicate Northern European countries because of the aforementioned reasons, general structure, and geographic dispersion of the United States (as well as population, culture, immigration, etc.)

The United States will more likely end up like Venezuela, Soviet Union or Cuba, rather than we would ever be able to end up as Denmark or any Northern European country.

Photo credit www.atlassociety.org