Denmark is developing as one of the happiest nations in the world on the ‘World Map of Happiness” study since it’s early beginnings in2006 despite having the highest tax rates in the world.
The European country of Denmark has a reputation for being one of the top ten nations in the world with the highest level of happiness despite paying the highest tax rates in the world. Not too many are happy having to pay out of pocket for taxes.
Though many people aren’t stoked to pay taxes, some see this less as a financial expenditure and more of funding policies or programs through taxes. Denmark is a fine example of this mindset despite paying the highest tax rates in the world with the tax-to-GDP ratio of 48.9% with Denmark’s federal tax rate in 2018 at 55.8%.
In comparison, other countries have lower tax-to-GDP ratios like India at 10.6%, the United States at 28.2%, and Japan at 27.4%. Denmark is ranked top in tax rates worldwide but is also known as a leading figure in happiness.
Annually the Danish work until June 17th to pay their high tax burden compared to the United States with tax Freedom Day on April 9.Despite having to work an additional two months out of the year dedicated solely to paying taxes, the amount of taxes paid doesn’t dictate happiness.
Denmark demonstrates that happiness isn’t determined by taxpay rates or money. Denmark is considered a wealthy country with the GDP per capita in 2020 valued at over 402,000 KR or Danish Kroner (over $60,000 USD)compared to Norway with a higher GDP per capita of over 610,000 NOK or Norway Krone (over $67,000 USD).
Despite Norway having a higher GDP and more wealth than Denmark, in 2020 Norway ranked sixth while Denmark was ranked the second happiest country in the world according to the World Happiness Report. These are some examples of how happiness isn’t directly related to financial status but is determined by several other factors.
The World Happiness Report studies several factors that determine the happiness of a nation starting in 2006 with the University of Leicester that started the first nation happiness study combining factors of psychology and economics. This study resulted in the first “World Map of Happiness” in 2006 ranking Denmark in the first place and the United States in26th place.
The “World Map of Happiness” study was followed up by a study conducted by the University of Cambridge in 2007 concluding the factors contributing to how Danish people are the happiest people in Europe. The study cited consistent trends correlating the highest levels of happiness with factors like having the highest levels of trust in their justice system, government, police, and other people around them. Another observation was that happier people have plenty of acquaintances and friends including at least one very close partner or friend.
There are good indicators of happiness that are all prevalent in Denmark like education, trust in government, health, and wealth(often enough to be comfortable). One contributing factor for the happiness of Danish people is their popular lifestyle concept of “hygge” which refers to finding warmth, comfort, and pleasure in simple things while creating a cozy atmosphere through friendships or feelings. The hygge lifestyle is becoming more popular worldwide as a way of spreading happiness contributing to the reputation of Denmark.