Would We Be Happier If We Paid More Taxes?

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Sat, May 16 - 6:29 pm EDT | 5 years ago by
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norden1I read an interesting article by Thomas Kostigen in MarketWatch this week. It mentioned that the Nordic countries (Denmark, Finland, the Netherlands, Sweden and Norway) all had the happiest people in the world. The U.S., according to the survey cited, didn’t even crack the top 10 (but we are #11).

Kostigen speculates that part of the reason Northern Europeans are so happy is that people in these countries don’t have to worry about paying for social services and health care directly, because the government takes care of it with their tax money. After all, if you aren’t fretting about how you will pay for your doctor visit or how much your insurance premiums are going up, or what you are going to do when you retire, or how you will get through maternity leave, you feel a little more secure in your financial situation and you feel happier. (We did beat out France, Great Britain, China and Japan.)

Sure, he points out, the Danes (#1 for happiest) pay close 2/3 of their income in taxes. But they don’t have to buy anything beyond food, housing and consumer goods. They’ve already paid for social services; it’s like an automatic deduction from the paycheck. Here is what Kostigen points out about paying taxes:

Simply, you pay for what you get. Taxes in the U.S. have taken on a pejorative association because, well, we are never really quite sure of what we get in return for paying them, other than the world’s biggest military.

Interestingly, the Nordic countries have lower incidences of corruption and catering to special interests. Perhaps that is where we Americans get our fear of paying high taxes for the government to take care of things. In the Nordic countries, the system has been practically built in as part of development in modern times. And they expect the government to use the money to actually benefit the people. In the U.S., we expect politicians to squander tax money on useless things; we expect it because we have seen it every day, for decades.

On top of that, even though we don’t pay as much in taxes, our individual incomes aren’t as high. Even though those living in Denmark pay more in taxes, per capita the people in the country still earn more on an individual basis (ranking 5th) than we do in the U.S.:

With the highest gross domestic product in the world, we are the richest country. On a per capita basis, though, we don’t even make the top 10. The U.S. ranks 15th in this category, according to the International Monetary Fund.

Obviously, there are problems with taking some of these Nordic countries for a model. They have far fewer people to worry about, and these countries do not have plurality in the same degree that we have here. We have too many voices to adequately come to an agreement as to what should be paid for by society. They are smaller countries, with smaller costs. To institute the all of the same programs in the U.S. would most likely be unweildy and impractical.

But we could do a little bit better, especially in terms of health care — and more and more Americans are beginning to want universal health care. There are ways to provide us with universal health care that wouldn’t break the bank (Mitt Romney figured out how to do it in Massachusetts). We could do better in terms of taking care of our own people. We are the richest country in the world after all. And even though we spend more money per person on health care, we still rank #37 in the world. We don’t even rank #1 (as our leaders would like us to believe). We pour billions upon billions into supporting the military efforts of other countries, but we can’t take care of our own children?

I figured out once that my yearly tax increase for universal health care would be something like $3,500. I’m paying $5,040 in premiums each year right now. While a dramatic increase to my taxes might probably wouldn’t make me happier, a small increase to my income taxes would save me $1,500 a year on health insurance — and that would increase my happiness level. (And think what it could do for the economy — we could all spend the savings as part of economic stimulus.)

No, we don’t need to pay 2/3 of our incomes in taxes to be a little happier and more relaxed. However, we might be a little happier as a nation if our politicians were more interested in what we the people wanted to have happen with our tax dollars. As my husband says: “I wouldn’t mind paying 40% of my income for taxes — if I knew it was going for good things and not being wasted on corporate subsidies, foreign militaries and pork barrel projects.”

What do you think? Would you be willing to pay more taxes if we had better services? Or do you think our government is so wasteful and incompetent that it would just lead to more problems?

image source: Malene Thyssen via Wikimedia Commons

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  • http://www.getmoneyenergy.com MoneyEnergy

    Great article and discussion of a very complicated issue! I’m Canadian, and I still pay for some health care services and drugs. So Americans shouldn’t think it’s 100% “socialized” up here somehow. Yet on the other hand, there’s the oft-mentioned fact about rampant inflation (as you know) being the “silent tax” all Americans are going to (are?) paying with the devaluation of the US dollar. So it might be the old “half dozen of the one, six of the other” problem. Countries everywhere have to tax their citizens in one way or another for certain services, and the debate is whether they should be privatized (and by how much). The best way around it is to redirect more of your own money back into your own life and become financially free or as close to it as you can get. And your husband made a good point too, above.

  • http://www.biblemoneymatters.com Bible Money Matters

    I can tell you right now – no, i would not be happier with higher taxes and socialized health care/etc. I think people in those countries happen to be happy in spite of having to pay such high taxes, etc. I think our government gets way too much of our money already -and has found ways of wasting it lately through this bailout or that bailout. I don’t trust government to make wise choices with our money. These are the same people who did such a bang up job on social security and medicare! :)

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  • http://thewonderfulworldofslinky.blogspot.com/ Slinky

    I’m totally against universal health care and other similar programs. I disagree in principle and it would cost me more.

    (I also believe the government would screw it up.)

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  • chris

    So my state stopped some of the funding for schools, so the city created a tax vote for schooling, so we are going to vote in November. As a homeowner, I will be affected, but I have no children, so it’s trickled down, sombody is going to be paying for it, if not today, then tomorrow !!

  • Miranda Marquit

    I think you make a good point. We expect certain services from our government, and they have to be paid for. Here in America, we expect education, someone to take care of the roads, Social Security and a number of other things. It’s actually rather amazing if you stop and think about the things we expect from government at this point. And it all costs money. Of course, we have come to expect too much in some cases — we expect the government to pay for local projects and scramble to get money for things that don’t actually benefit larger society. And sometimes the government just wastes money on things that are totally unnecessary.

  • Miranda Marquit

    I can certainly see where you are coming from. If we were to do something like universal health care, we would definitely need a system that worked better. But, considering the state of our present system (and I have “good” health insurance), I’m not sure it could be much worse. Our health care system is worse than most of the developed world’s — and we pay way more than anyone else.

  • Miranda Marquit

    I think a lot of people probably agree with you. In my case, though, universal health care would be less expensive, since my health insurance costs keep going up — even when I don’t use it!