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According to the OECD, Denmark (26.4 percent), Norway (19.7 percent), and Sweden (22.1 percent) all raise a high amount of tax revenue as a percent of GDP from individual income taxes and payroll taxes. This is compared to the 15 percent of GDP raised by the United States through its individual income taxes and payroll taxes for instance.

In order to raise a lot of income tax revenue, income tax rates in Scandinavian countries are rather high except for that of Norway. Denmark's top marginal effective income tax rate is 60.4 percent. Sweden's is 56.4 percent. Norway's top marginal tax rate is 39 percent.

Scandinavian income taxes raise a lot of revenue because they are actually considered flat. In other words, they tax most people at high rates, not just the high-income taxpayers. The top marginal tax rate of 60 percent in Denmark applies to all income over 1.2 times the average income in Denmark.

Sweden and Norway have similarly flat income tax systems. Sweden's top marginal tax rate of 56.9 percent applies to all income over 1.5 times the average income in Sweden. Norway's top marginal tax rate of 39 percent applies to all income over 1.6 times the average Norwegian income.

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Kendrick Rau

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3y ago

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