Happy tax-payers and broad public support
It is common to hear Danes - and foreignersalike - say that education and health care in Denmark is 'free'. However, this is a truth with some modification.
The Danish welfare system might be 'free of user charge' for e.g. public schools and doctors appointments meaning that free access is provided at the point of entry, but the welfare system in its totality is financed by way of progressiv taxation. This means that citizens and private companies with higher incomes pay higher taxes, and citizens and private companies with lower incomes pay lower taxes, and that these taxes are used to finance the extensive healthcare- and education services.
In this way, the welfare system equalises the economical differences between citizens by ensuring all citizens - regardless of their financial means - free and equal access to fundamental welfare benefits and services. However, reducing inequalities is not the main purpose of the Danish welfare model - it is a mere bi-product - which also in part explains why Denmark is not a class-less society.
The welfare system does indeed benefit each individual citizen but the main purpose of the Danish welfare model is to ensure healthcare and education for all citizens in order to provide high quality human capital/first class employees of great benefit to the taxpaying companies and hence to the Danish economy.
Currently, the average Danish citizen pays a total of 46 per cent of their income in taxes. But although Danes have the fifth highest tax burden in the world, 88 per cent of the Danes are happy to pay their taxes (Gallup Institute Survey).
“Danes are in general very positive about the welfare system, because everybody benefits from it. If you have children in a public daycare center, you know very well that you only pay a third of the real cost. And in case you get sick or have to give birth, you also know that it is free of user charge to go to the hospital. The system works because everybody feels they get reliable public services of acceptable standards in return from what they pay in tax”, Peter Abrahamson says, professor in sociology at Copenhagen University.
“Even among the wealthy part of the population, there is a general consensus that the Danish welfare system makes Denmark a good place to live”, Peter Abrahamson explains. A high degree of government accountability, and hence of trust in government institutions and public services, is therefore one main explanations of the high level of popular support to the welfare system in Denmark. In other words, the link between paying taxes and what each citizen and company gets in return is very visible and tangible in Denmark compared to other countries where this link might be less obvious.
But to fully understand why Denmark has succeeded in becoming a welfare state, we must look back in historya few hundred years.
