Updated: Feb 20, 2020
In the constant push towards "Democratic Socialism," Presidential Candidates like Bernie Sanders and Elizabeth Warren have reminded us constantly that their version of Socialism resembles that of Denmark and Sweden- and definitely not Venezuela.
I'd like to take a look at some of the major economic policies in Denmark and Sweden, and we'll consider whether or not those pushing for "Scandinavian Socialism" actually support Scandinavian economics.
#1 - Sweden does not have a minimum wage. Neither does Norway. Or Switzerland.
It's fairly obvious that people on the political left in America support a minimum wage. The latest call is in the "Fight for $15." $15 an hour is now called a "living wage." Although it's important to note that a living wage is different for everyone. A family of four living in rural Montana probably requires a different minimum income than a family of four in New York City. This basic fact underlines the problem with dictating a universal number that can be called a living wage for anyone in America.
Aside from agreement or disagreement with a minimum wage, we must ask the question: Does Bernie support Scandinavian style economics?
#2 - The Corporate Tax Rate in Denmark is 22%
The Tax Cuts and Jobs Act signed by President Donald Trump lowered the corporate tax rate from 35% to 21.5%. This has been largely heralded by the left as "Tax cuts for the rich." Bernie is proposing that we raise the corporate tax rate back to 35% to fix this injustice. He's even pushed numbers as high as 52% for corporate taxes.
But what about Denmark? Bernie has used Denmark as his model for "Socialist success," but Denmark's corporate tax rate is 22%. That's pretty close to the 21.5% that the rate is at right now.
Does Bernie support Scandinavian style economics?
#3 - In Sweden, many in the Middle Class pay the same tax as the top 1%
If you make the equivalent of more than $70k per year, you pay a 60% personal income tax rate. That's not all.. That's actually the highest income tax bracket. So if you are in the middle class, you pay the same rate as someone who's in the top 1%. Does Bernie support Scandinavian style economics?
#4 - Neither Denmark or Sweden have a Wealth Tax
Bernie, Elizabeth, and many of the other Democratic candidates are in support of a Wealth Tax. Warren has floated a 6% tax, and Bernie has stuck to an 8% tax. The tax in the two countries that Bernie and Warren both claim to love? 0%
In fact, nine countries in Europe that had a wealth tax later ditched the policy because of it's detrimental effects.
#5 - Sweden does not tax Stock Market trades
Bernie wants to tax every single trade in the stock market. I've outlined in several other articles how this would have a detrimental effect on the market itself.
Of course, many who support the hardcore left couldn't care less about the market. Those people, blinded by their hatred of Capitalism, need to consider the fact that 50% of Americans have money in the stock market.
You can take a look at our past article on the stock market tax here:
Regardless of your feelings on Bernie's plans, it's important to note that while he is selling his followers the vision of "Scandinavian Socialism," he is not pushing for economic policies anywhere close to the policies of those countries.
The "Nordic Model" represents low taxes and low regulation on businesses, and high taxes on personal income. Bernie and Warren are pushing for the opposite. The Scandinavian countries favor production, and the hardcore leftists in America favor consumption while punishing production.