In Denmark, a planned tax break for some of the country’s richest is set to worsen the gender wage gap, which is already lagging Nordic peers.
(Bloomberg) — In Denmark, a planned tax break for some of the country’s richest is set to worsen the gender wage gap, which is already lagging Nordic peers.
Danish men will this year get a combined $2.33 billion in extra income from a new tax proposal on high earners while women will get about $630 million. That’s according to calculations by the finance ministry, conducted at the request of a lawmaker from the Red-Green Alliance opposition party.
Denmark, which often prides itself as a pioneer in equality, only ranked 32nd in last year’s Global Gender Gap Report by the World Economic Forum, with all the other Nordic nations in the top five. It is also the only European Union country where people believing the government should take measures to reduce income inequality are in minority, according to last month’s Eurobarometer survey.
The ministry used gender and wage data from the country’s national statistics office to estimate how much of the planned tax cut would benefit men and women respectively. With more high-income men than women in the Nordic country, the tax break is, in isolation, set to widen the gender pay gap.
Denmark’s coalition government, which includes parties from center-left and the center-right, plans to lower taxes by 7.5 percentage points on annual gross incomes exceeding roughly $100,000. The proposal will increase the differences in incomes by 0.93 percentage points measured by the Gini coefficient, the finance ministry said.
To mitigate some of those effects, the government is also proposing a new tax targeting the very richest with annual incomes exceeding $360,000.
(Updates to add details on the calculation in fourth paragraph)
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