Daniel Korski

Next stop, tax stop

The Conservatives have been rightly looking to Sweden for ideas on education policy, now they should be looking a little further south, to Denmark, for inspiration on tax policy. In Denmark, a centre-right government has been in power for eight years and, despite technically being in a recession, the country’s thoroughly modern market economy and pro-active labor market policies – which combines easy hiring and firing with high benefits for the unemployed – is helping to weather the storm.

But a key ingredient for Prime Minister Anders Fogh Rasmussen’s success in a country seen as more social democratic than centre-right has been the “tax stop” (or “skattestoppet” in Danish), which froze all taxes and duties at their January 2001 level. Tax rates can be cut, but none can be raised.

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