Looking at Denmark
Denmark collects significantly more tax (as a proportion of GDP) than the UK, which allows it to fund better public services. OECD analysis shows that in 2019 it came top among all 37 OECD countries in terms of if its tax-to-GDP ratio, at 46.3% compared with the OECD average of 33.8% (and 33.0% in the UK). Denmark’s tax structure also differs from the average OECD country in that it receives substantially higher revenues from taxes on personal income, profits and capital gains (54% compared to an average of 24%), although this is partially offset by the lack of social security contributions.
Higher levels of income and other taxes in Denmark are supported by the Danish population because they pay for extremely good public services (and may also help to explain why Denmark consistently comes out near the top of the UN’s annual World Happiness Report). Denmark has an excellent education system with free tuition including at university, generous paid parental leave and subsidised childcare, free healthcare, and a comfortable state pension. Support for high taxes are mirrored by a culture that stigmatises tax avoidance (as well as a strong regulatory and enforcement regime). In 2020, for example, Denmark became one of the first countries to ban companies that are registered in tax havens from accessing financial aid during the coronavirus pandemic.