Denmark Eyes Income Tax Cuts to Counter Labor Shortage

Aug. 21, 2007

Cuts would come from increased "green" tax on energy consumption.

Denmark's Liberal-Conservative government on Aug. 21 unveiled plans to cut income taxes as of 2008, improve the national welfare system and improve quality in the public sector. The initiative called for 10 billion kroner (US$ 1.81 billion) in annual tax cuts to boost Danes' incentive to work amid a labor shortage.

Unemployment has been steadily falling in Denmark for several years, and reached 3.5% in June, its lowest level in decades.

The tax cuts would be financed by an increase in 'green' taxes on energy consumption to match inflation. These taxes have remained unchanged since 2001.

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