How are Scandinavians the happiest countries when they pay hefty taxes?

Iím cool with paying taxes that are among the highest in the world because that money allows me to live in a country with a set of perks thatís among the best available anywhere in the world.

1. Seriously, more than once when describing the social welfare network that we take for granted up here Iíve been met with variants of Are you guys for real?

2. Education is tuition free at all levels, including university. Thereís no such thing as needing to save up for your childrenís college-tuition in Norway. (This applies to foreign students too!)

3. Living costs during your studies is covered by a subsidized loan. You only need to repay about 70% of the loan, and the loan comes with many built in safety-features that are meant to prevent it from pushing you into poverty, for example itís interest-free during your studies and during any later period where your income falls under certain levels. (and interest is low even when you do pay it, at the moment you can choose between 2.25% floating interest rate, or 3.05% interest fixed for the next decade)

4. Childcare is subsidized, so even though quality is better here (more employees, better educated employees), average childcare-costs are about $250/month in Norway and $950/month in USA.

5. We have universal health care for everyone. This is financed with taxes, neither you nor your employer (if any) pays anything extra for this. Deductibles are capped at $200/year or 2% of your income (whichever is LEAST) Zero deductible for children. Zero deductible for all pregnancy-related and birth-related costs. (including abortions) You donít need any health care insurance as a resident of Norway, so questions like what constitutes a pre-existing condition never comes up, it just doesnít matter, if youíre a legal resident you have full coverage, itís as simple as that.

6. Parents (both biological ones and adoptive parents) get 54 weeks of parental leave paid at 80% their normal salary.

7. Many social programs that exist in both Scandinavia and USA are more generous here. As an example you can get unemployment-benefits for up to 2 years here while I believe up to 6 months is the norm in USA.

8. If you get sick, you can stay home from work at full pay. For short ilnesses up to 3 working-days in duration itís sufficient to inform your employer that youíre ill, for longer illnesses up to a year a doctors notice is required. (and if youíre ill for longer than a year, you may qualify for disability)

9. If your kids get sick, or the person who usually takes care of your kids during working-hours gets sick, you can stay at home and take care of them at full pay. (limted to 10 days a year for each parent, 15 if youíve got more than 2 kids, doubled if youíre a single parent)

10. Most government-offices and services are fairly efficient. Corruption is rare, and weíre pretty consistently ranked as one of the least corrupt countries in the world. In other words, I feel sure that most of my tax-money go to the purposes theyíre supposed to go to. [1]

11. Roads are maintained. Ferries run. Bridges get built. Electricity is reliable. Clean water comes out of taps. Sewer gets treated before release. To a first approximation, shit works. (of course itís also easy to come up with examples were improvement would be possible and desirable, but the overall summary remains: shit works.)

12. Welfare is generous relative to pretty much every other country. As a citizen of Norway you can feel safe: even if you fail, thereís a net to catch you, and itís a fairly strong and comfortable one, youíll not go too deeply into the abyss. (again: plenty of potential for improvement, but Iíd still rather be poor in Scandinavia than just about anywhere else)

So when it comes specifically to taxes, I think the main reason that many donít mind them, is that although theyíre high, we also get a lot back from them.

When it comes to happiness in general though, then thereís one more very important component.

Weíre a low-inequality society. And it turns out that makes people a whole lot happier. Thatís not a surprise really. Look at these 2 tiny countries.

Country A (mean income $113K/year)
Jane earns $12K/year
Mohan earns $15K/year
Gauri earns $17K/year
Joe earns $25K/year
Bill earns $500K/year.

Country B (mean income $87K/year)
Jan earns $25K/year
Moana earns $30K/year
Geir earns $55K/year
Joanne earns $75K/year
Billie earns $250K/year

Country A is wealthier overall, but nevertheless country B has a higher standard of living for 80% of the inhabitants. And although the last one earns ďonlyĒ $250K rather than $500K in country A, their income is still very high and itís not as if theyíre likely to be unhappy because of a lack of sufficient income for a decent life. Odds are country B is happier than country A. Equality benefits happiness.

The Scandinavian countries have the lowest income-inequality in the world with a Gini index in the 25Ė29 range. And like the two hypothetical countries above demonstrate, this tends to be an advantage for almost everyone.

Put differently, if your tax-system (and other mechanisms) has the effect of taking $100 from the wealthiest person in the country, and giving $100 to the poorest person in the country, then the poor person will tend to benefit more than the wealthy person is hurt.

In fact the effect is strong enough that even if a mechanism takes $100 from a wealthy person and hands over $50 to a poor person (letís say the other half of the money is wasted in bureaucracy or something) that can still result in a overall improvement to happiness.


Perfect Money/Payeer/Epay/Neteller: