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Taxes make for happy citizens

By Kay Bell · Bankrate.com
Tuesday, August 3, 2010
Posted: 1 pm ET

High taxes mean happy residents. Really!

OK, it's probably not the taxes that are making people in The Netherlands, Denmark and Finland the happiest folks in the world.

But the services those nations' residents get for their taxes is probably why those countries are one, two and three in the Organization for Economic Cooperation and Development's, or OECD's, latest happiness rankings.

The designation, officially titled "subjective well-being," is part of the OECD's 2010 fact book on economic, environmental and social statistics from the world's large, industrialized democracies.

On average, the OECD says its current survey found that around 63 percent of people in the countries reported a high satisfaction with their life. And they're optimistic; 71 percent expect a positive evaluation of their life five years from now.

So where are we Americans in this study? We came in 13th, with a current 70 percent happiness quotient. But 80 percent expect things to be better in five years.

Still, that's 15 to 20 percentage points below the happiest places in the world (sorry, Disney) of the Netherlands, Denmark and Finland.

Among our English-speaking compatriots, Canadians are happier than us; our neighbor to the north ranked sixth. But we have a sunnier view of our lives than England, which came in at 15.

It gets interesting when you compare the happiness data with the taxes per average worker. The OECD took into account a nation's personal income taxes, as well as employees' and employers' social security contributions. For the few countries that have them, payroll taxes also were included.

The United States ranks 23rd in tax collection, below the OECD average, but we could only muster a 13th place in happiness?

The happiest country, the Netherlands ranked as the nation with the seventh highest in taxes collected per average worker. Denmark's taxes came in at number 13;  Finland's at ninth.

The highest taxes were in Belgium and its residents still ranked as the world's ninth happiest.

To be fair, Hungary had the second highest tax collections per worker and it was 38th in the happiness tally.

But the fact that residents of nations we view as grossly overtaxed seem to be happier than we are is something worth thinking about.

Rather than dismiss out-of-hand their social welfare programs, such as comprehensive health care services, perhaps we need to look at how they are administered. Even here in the U.S. where there's much ranting about taxes, when you confront people with specifics about which services they are willing to give up for a reduction in taxes, the the anti-tax tune quickly changes.

Basically, we tend to have a bad case of wanting something for nothing. Despite what politicians say, that's simply not possible. You get what you pay for and in many countries, people are quite happy with the return on their tax payments.

Instead of simply calling for no or fewer taxes, we should be demanding that they be spent more appropriately. That will take some give and take from everyone, but it could make us a happier, and more civil, country as a whole.

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3 Comments
Bjorn
August 05, 2010 at 11:40 am

Wow. Talk about an extreme oversimplifcation. The number of factors in the idea of "happiness" are too great to sum up in an entire book, let alone a paragraph indicating the key is to tax and simply spend money more wisely.

Denmark, the Netherlands and Finland have markedly different work cultures than the US, and are significantly smaller (the Netherlands, 61st in the world in population, is 1/20 the size of the US). The list of financially-unrelated differences between these countries and the US could go on and on.

Perhaps other cultures are better at finding happiness in things other than financial measures.

gatorback
August 04, 2010 at 11:55 pm

The judicious use of resources (tax funds) will determine our fate. The external threats are nothing compared to the problems we have internally.

Fair Tax now
August 04, 2010 at 8:30 am

You missed a BIG key point in this story. What percentage of people in those countries pay income tax? Well The Netherlands is 100%, Finland excludes under 13k Euros, Denmark appears to be near 100% as well.

What does that mean. Everyone is pulling some of the weight, rather than 50% paying over 97% of the tax. Where is the motivation to go out and make more, when increasing parts are confiscated to pander to folks to don't work, and politicians certainly want to keep it that way.