A new study revealed that countries with higher taxes are happier, healthier, benefit from more research and development, and a higher GDP rate per person, meaning they are making more money overall.
The study, by Neil Brooks and Thaddeus Hwong at the Canadian Center for Policy Alternatives, compares high-tax Nordic countries and low-tax Anglo-American countries on 50 social and economic measures and finds the high-tax Nordic countries score better in 42 categories than Canada. The US fared even worse.
The more heavily taxed Nordic countries have:
- lower rates of poverty, more equal income distribution, and more economic security for their workers;
- a higher GDP per capita;
- higher rates of household saving and net national saving;
- greater innovation, including a higher percentage of GDP spent on research and development;
- a higher ranking on their growth competitiveness by the World Economic Forum;
- higher rates of secondary school and university completion; and
- less drug use, more leisure time, and higher life satisfaction.
The U.S. falls near the bottom of the 21 industrialized countries in a strikingly large number of social indicators.
In contrast, Finland ranks near the top of the industrialized world in most of the social indicators and has been named the most competitive country in the world by the World Economic Forum four years in a row.
“The tax cut lobby has it backwards,” says Hwong. “Not only do government social programs create a healthier society, they also create the conditions for a vibrant—and competitive—economy.”
“By cutting taxes, the Conservative government in Canada is headed in the wrong direction,” says Brooks. “It wants to make Canada more like the United States, yet our findings show that Americans bear severe social costs for living in one of the lowest taxed countries in the world.”