In Great Dane, Great Pain, Henrik Rasmussen counters recent Denmark-as-Utopia thinking with “a dose of reality from someone who has actually lived in Denmark”:
Taken together, these numbers indicate that the 10% poorest in the United States have roughly the same standard of living as their Danish counterparts while the remaining 90% of Americans are better off than the Danes.Anecdotal evidence and hard numbers concerning material goods support this conclusion. If we look at housing, the Heritage Foundation estimates that Danes have an average of 558 square feet per person available compared to a US average of 721.2 — almost 30% more living space. The difference is even more striking if we look at cars: According to Eurostat, America has 759 cars per 1000 people compared to 354 in Denmark — a difference of more than 100%. In particular, large passenger vehicles such as SUVs are extremely rare in Denmark.
In addition, Danes tend to have fewer household amenities than Americans. A case in point: my wife and I recently hosted a Danish friend at our home in Virginia. During the clean up after dinner, our guest was astonished by our garbage disposal, having never seen one or even heard of one before in her life.
Ironically, the taxation system, which is designed to redistribute income for the benefit of the poor, is one of the main reasons poor and lower middle class Danes are not doing better than their American counterparts. For instance, Denmark has a value-added tax (VAT) of 25% on all goods and services, which increases prices for everyone regardless of their income. Furthermore, certain goods such as cars and gasoline are taxed at even higher rates. The sales tax on cars is 180%, and the price of gasoline is currently $6.50 per gallon due to taxes. Since the poor tend to spend a larger percentage of their income on consumption than the rich, the high VAT and special sales taxes hit the poor relatively hard.
A “mass exodus is already taking place”:
For instance, estimates of Danes living in London vary between 35,000 and 70,000, which is roughly 1% of the total Danish population of 5.4 million. According to the leading Copenhagen business daily Børsen, the average income of these Danish Londoners is more than $100,000 per year.