The Danish Tax Reform Act of 1993: Effects on the Macroeconomy and on Intergenerational Welfare

Kathrine Lange, Lars Haagen Pedersen and Peter Birch Sørensen

Chapter 5 in Macroeconomic Perspectives on the Danish Economy, 1999, pp 134-164 from Palgrave Macmillan

Abstract: Abstract In June 1993 the Danish Parliament enacted a tax reform to be phased in over a 5-year period starting in 1994. Following recent trends in the OECD area, the Danish tax reform combined a broadening of the tax base with general cuts in marginal tax rates on income from labour and capital. In terms of the magnitude of the drop in marginal tax wedges, the Danish reform was not as ambitious as the recent tax reforms in the neighbouring Nordic countries (see Sørensen, 1998). On the other hand, a substantial part of the income tax cuts was financed via a rise in various ‘green’ taxes, including excise taxes on energy and water use. The Danish reform bill may therefore be seen as one of the most serious attempts so far to implement an ‘ecological’ tax reform.

Keywords: Real Product Wage; Danish Economy; Intergenerational Welfare; Real Consumer Wage (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1057/9780230501034_5

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