Ofte hører man danske politikere skamrose, hvor godt det går i Danmark, og hævde, at de høje skatter og megen regulering bare er som sød sukker for omverdenen og bestemt ikke skræmmer nogen væk. Fra tid til anden er der sågar nogle forskere, der hævder det samme–ganske vist uden endnu nogensinde at have fremlagt nogle undersøgelser til støtte for deres påstande.
“As a self-employed software engineer, Thomas Sorensen broadcasts his qualifications to potential employers across Europe and the Middle East. But to the ones in his native Denmark, he is simply unavailable.
Settled in Frankfurt, where he handles computer security for a major Swiss corporation, Sorensen, 34, has no plans to return to the days of paying sky-high Danish taxes. Still, an unknowing headhunter does occasionally pass his name to Danish companies.
“When I get an e-mail from them, I either respond negatively but politely,” Sorensen said. “Or I don’t respond at all.”
Born and trained at Denmark’s expense, but working – and paying lower taxes – elsewhere in Europe, Sorensen is the stuff of nightmares for Danish companies and politicians searching for solutions to an increasingly desperate labor shortage.
People like Sorensen, and there are many, epitomize the challenges facing the small Nordic country, long viewed across Europe as an example of how to keep an economy thriving and a society equal.
Young Danes, often schooled abroad and inevitably fluent in English, are primed to quit Denmark for greener pastures. One reason is the income tax rate, which can reach 63 percent.
“Our young people are by nature international,” said Poul Arne Jensen, chief executive of Dantherm, a maker of climate-control technology. “They are used to traveling and have studied abroad.”
“They are no longer ‘Danes’ in that sense – they are global people who have possibilities around the world,” he said.
… [Success] has given rise to an anxious search for talent among Danish companies, and focused attention on émigrés like Sorensen. The Organization for Economic Cooperation and Development, which is based in Paris, projects that Denmark’s growth rate will fall to an annual rate of slightly more than 1 percent for the five years beginning in 2009, reflecting a dwindling supply of a vital input for any economy: labor.
The problem, employers and economists believe, has a lot to do with the 63 percent marginal tax rate paid by top earners in Denmark – a level that hits anyone making more than 360,000 Danish kroner, or about $70,000. That same tax rate underpins such effective income redistribution that Denmark is the most nearly equal society in the world, in that wealth is more evenly spread than anywhere else.
The movement toward lower taxes passed Denmark by, even as it took root in much of Europe.
Small East European countries, notably Estonia and Slovakia, started the trend by imposing low, flax taxes on income and corporate profits about five years ago. Those moves helped prod Austria, and eventually, Germany, to slash high marginal rates as well.
Danish taxes also contrast sharply with those in nearby London, often jokingly referred to among Danes as a Danish town, because so many of them live there. Lower taxes on high earners have been a centerpiece of the policy mix that has fed the rise of London as a global financial center since the 1980s.
But today young Danes can easily choose not to pay for the system’s upkeep, once they have siphoned off what they need. For starters, as citizens of the European Union they are entitled to work in any of the 27 EU countries.
Sorensen, who graduated from business school in Copenhagen, found himself earning the equivalent of more than $100,000 before he was 30 – and paying 63 percent of it in taxes. His work as a computer consultant for Deloitte also took him to Brussels, where he met the Spanish woman he would eventually marry.
But the high taxes, mixed with his wife’s discomfort in Denmark, meant that a job offer in Qatar three years ago was all it took to pry him away from Copenhagen. Now, he is ensconced in Frankfurt, setting up a new business on the side and planning to pay no more than 25 percent of his income to the German state.
“When you are at 63 percent tax, you don’t look forward to the evaluation with the boss to get a raise,” Sorensen said. “You look for more vacation or a training course in the tropics – something that you get the full benefit of.”
There are many more Sorensens out there in a work force that is culled from a country of just 5.5 million people.
The Confederation of Danish Industries estimated in August that the Danish labor force had shrunk by about 19,000 people through the end of 2005, because Danes and others had moved elsewhere. Other studies suggest that about 1,000 people leave the country each year, a figure that masks an outflow of qualified Danes and an inflow of less skilled foreign workers who help, at least partially, to offset the losses.
… “Denmark is a country of consensus,” [Prime Minister Anders Fogh] Rasmussen said recently. “Occasionally that fact tends to lower the speed of reforms, but in exchange we are efficient in our implementation.”
But young Danes may simply move faster.
Sorensen is settling into life in Frankfurt. He recently passed through Copenhagen to discuss a business proposition with a potential partner, but anything they do will be based outside Germany, he said.
His wife recently gave birth to their second daughter, and barely a word of Danish passes Sorensen’s lips when he speaks with his children.
They are growing up with English, an amalgam of the British and American idioms, as their first language, and the world as their horizon.
“If I could,” he said, “I’d have a European passport, not a Danish one.”