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Part 6: Paying for Denmark’s Free Health Care

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TL; DR Summary

This final installment looks at the claim that Denmark has free health care – health care is free at point of service, but obviously, health care expenses still get paid some how.

FREE HEALTHCARE

Clinics are free. However, (as of 2012) there was an 8% flat rate “Health contribution” tax on income. This tax was being phased out and rolled in to general income taxes. However, this gives us a baseline for what “free” health care costs in Denmark. Additional tax revenue, especially from local government income taxes, is added to this to pay the costs of “Free” health care.

The 8% health care income tax applied to all earnings above the US$7600 level. Starting in 2012, this is going down by 1% per year and merged into the general income tax (Source Danish government web site reviewed in 2015. For additional reference, see also  http://www.civitas.org.uk/pdf/Denmark.pdf)

TAXES IN DENMARK

Taxes in Denmark are the highest in the world. The typical Dane worker pays between 50% and 70% of their income, as taxes, including “Gross”, “Health”, “Income”, and “Local” taxes, plus a 25% Value-Added-Tax (VAT) which is similar to the U.S. concept of a sales tax. The “50-70%” figure is NOT a marginal rate – that is the total percentage of one’s income that is paid in taxes.

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