​Hey Bernie Sanders, Let’s Talk About Denmark

Joel Anderson |

Vermont Senator Bernie Sanders finished the Iowa Caucus in what is basically a tie with former Secretary of State Hillary Clinton on Monday night, stoking Bernie fans and political commentators alike into continued rabid speculation over the future of the primary campaign and the Democratic Party. The Sanders campaign has officially taken on a new proportion, though, showing the nation that he's not going to be an also-ran in President Clinton II's coronation.

And it's as this continues to gain steam that I think there's good reason to start showing some serious scrutiny for the basic nuts and bolts of the campaign and to bring a bit more of a skeptical eye to the man's beliefs. Most particularly, I think it's time to reexamine Bernie's obsession with Denmark.

At the heart of the current #FeeltheBern movement is a belief among members of the American left that we need to be more like those Scandinavian countries that frequently find themselves at the top of studies into which people are the happiest. American liberals are fond of pointing to the universal health care, relative income equality, and strong social safety net as examples of how Denmark appears to have avoided many of the issues of chronic poverty that have plagued the United States for its entire existence.

And they’re not wrong. There’s plenty America could, and maybe should, learn from Denmark. However, the way that Senator Sanders and others keep insisting that, “if only the United States could just be more like Denmark,” is ultimately really unfortunate. It’s unfortunate because it’s a massive oversimplification that ignores the very real and very important aspects of American culture that a country like Denmark could never replicate, and vice versa.

In fact, for all of the fawning over Denmark, there’s plenty about the country that Sanders supporters would likely have real issues with.

Denmark's Socialist Utopia is Built on...a Flat Tax?

It is true that the strong safety net that protects every Dane from falling into extreme poverty is paid for by a lot of taxes. Denmark ultimately has tax revenues that are about half of the country’s GDP, about double the rate here in the United States, and has a top tax bracket of just over 60%. For American liberals, who continue to buck against a top tax bracket that’s just under 40%, this sounds about right.

However, every time the Sanders campaign proposes tax increases, it’s very careful to avoid any suggestion that paying for social change would require raising taxes on the middle class in any meaningful way. Take his Medicare for All plan, which proposes new tax brackets that would take the top rate up to 52% and create three new brackets above the current top rate.

Unfortunately, a closer look at Denmark’s system would reveal that Denmark’s commitment to a progressive tax system isn’t nearly as strong. In fact, Denmark’s income taxes appear to be dangerously close to an idea that has long been beloved by American conservatives: the flat tax.

Denmark’s top tax rate kicks in at what most American liberals would consider to be an absurdly low rate of 1.2 times the average income, the equivalent of an income of about $60,000. So, anyone earning more than $60,000 a year in Denmark is paying nearly two-thirds of that to the government and paying the same rate as someone earning millions. By comparison, the top income tax bracket in the United States doesn’t kick in until 8.5 times the average income even without Bernie tacking on three new brackets.

Add to that the 25% value-added tax (VAT) (essentially a sales tax), and the middle and working class of Denmark ends up shouldering a relatively large portion of the tax burden. Granted, those taxes are paying for an excellent social services system from which they can count on a number of very important benefits, but it doesn’t change the fact that the progressive tax policies advocated by Sanders and other American liberals are not the reality in Denmark.

Denmark may do a lot more to ensure that the rich pay more of their income in taxes, but they are also doing very little to ensure the middle class escapes that same rate of taxation. All of this speaks to an underlying reality about Scandinavian welfare states: paying for services like this requires sacrifices from the middle class as well as the rich.

Income Equality, Wealth Inequality

It is certainly true that Denmark is among the world leaders in income equality, featuring the lower Gini Coefficient in the OECD and an economy where the top 10% of earners earn a mere 5.2 times the average income level, compared with a level of nearly 20 in the United States.

However, there is plenty of reason to believe that, despite its sky-high taxes, Denmark may remain one of the better places to be rich…and getting better. The top 10% of earners in Denmark control 80% of the nation’s wealth, a huge jump from the 65% level of 2000, while the same group in the United States “only” controls 78% of net worth.

So, regardless of what people are earning today, the concentration of wealth amongst the top decile seems to be continuing unhindered. When you throw in Denmark’s 15% estate tax (compared to 40% in the United States), the country ceases to appear as quite the socialist utopia the American left might consider it to be.

A Very, VERY Homogenous Culture

However, despite all of this, perhaps the most essential difference lies in something that can’t be quantified the way differences in tax rates can. That something would be culture. Namely, the United States is arguably the single most diverse nation in history, drawing cultural traditions from every corner of the globe. In fact, the very concept of “whiteness” as it has developed in America is a sign of this. The fact that the astonishing diversity of ethnic and cultural backgrounds represented by Europe has effectively flattened itself out into a generic “white” by the cultural definitions applied on this side of the Atlantic is a sign of just how far-flung the peoples who have come to the United States really are.

Add to that a geographically massive nation made up of a wide variety of geological and ecological realities in urban and rural areas alike and the picture should be clear. Americans are diverse. Diverse in ethnicity, diverse in ideology, diverse in culture.

This is most certainly not the case in Denmark. Of Denmark’s 5.6 million people, some 5 million, about 90%, are of Danish origin. Not “white.” Specifically Danish. That’s in addition to a population that’s 90% protestant and can claim a pretty clear shared lineage and history for its country and people.

That sort of shared cultural history is a huge part of how the Danish people have formed the sort of consensus necessary to maintain a welfare state like the one they have. The clear sense of community developed by a small nation with an almost entirely homogenous population with a shared belief system and history is a huge part of their success. More than anything else, Danes trust their government and trust each other, something that’s utterly essential to a system where the majority of the population is willing to hand over the majority of its income in taxes year after year.

“The real key to Scandinavia’s unique successes isn’t socialism, it’s culture,” writes Boston Globe opinion writer Jeff Jacoby. “Social trust and cohesion, a broad egalitarian ethic, a strong emphasis on work and responsibility, commitment to the rule of law — these are healthy attributes of a Nordic culture that was ingrained over centuries. In the region’s small and homogeneous countries (overwhelmingly white, Protestant, and native-born), those norms took deep root.”

Of course, whether or not that trust is extended to anyone who isn’t Danish isn’t as clear. The Danes have a pretty serious issue with racial tolerance, even if they don’t necessarily have enough non-Danish people within their borders for it to rear its ugly head with a lot of frequency. However, simply gauging the way Denmark has reacted to the recent Syrian refugee crisis should give an indication that the tremendous generosity the Danes are willing to show each other is not something they’re ready to extend to people with different cultural and ethnic backgrounds.

America’s Diversity is Not a Liability, It’s a Strength

Denmark is a tiny nation populated almost entirely by protestants with long history in the region, an extremely narrow ethnic background, and a closely shared cultural history. The United States is a massive nation with a population drawn broadly from across Europe and the world with a wide variety of belief systems represented. Both nations could likely learn a lot from the other.

Simply asserting that Danish policies can and should be mapped onto the United States shows a massive disrespect to both nations and their unique strengths and weaknesses as societies. Simply looking at Denmark’s welfare state with rose-colored glasses forgets much of what is truly remarkable about the United States.

Our incredible diversity makes it much, MUCH harder to find political consensus, but it’s one of the most essential characteristics of this country. Navigating difficult political waters to find compromised solutions that can actually appeal to the majority of this far-flung population is the key to any real social movement in the United States, and one that the left needs to embrace rather than retreating into fanciful, escapist fiction about Scandinavian utopias.

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