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Ethos Issue 3, Oct 2007
The Nordic Social Security Model:
Squaring the Circle?
Koh Tsin Yen
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| As indicated in Table 2, the high emphasis
on social welfare is paid for by some of the highest tax
rates in the world (Table 3). |
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| TABLE 3: TAX RATES AND COLLECTIONS
IN SWEDEN, DENMARK AND SINGAPORE13 |
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| Tax revenues have averaged at
about 50% of GDP over the past five years. Although taxes
on labour income are arguably high enough to be on the
wrong side of the Laffer curve,20
this is as efficient a tax mix as can be expected given
their revenue needs, with higher taxes on labour income
and consumption, and regionally comparable taxes on corporate
and capital income. Table
4 outlines the benefits enjoyed in the Nordic states,
relative to comparable social measures in Singapore. |
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| TABLE 4: COMPARISON OF BENEFITS
IN SWEDEN, DENMARK AND SINGAPORE |
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Koh Tsin Yen is Head of Social Programmes
(1) in the Ministry of Finance, Singapore. Her department
looks into funding and policy issues for the social sector
in Singapore.
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