Comments by "Ynhockey" (@Ynhockey) on "Why Is Denmark So Rich Despite Huge Taxes?" video.

  1. One issue with higher VAT in a globalized world is that it hurts local retailers. It's very hard to collect VAT on international vendors, so it's possible to shop online in many places, especially for digital goods, without paying any VAT at all. Large vendors like Amazon will work with the governments to collect the appropriate VAT, but small vendors likely won't. Some of these are resellers, so you essentially get the same product. I'm sure that Danes still prefer the convenience of buying with VAT, but with local or well-known international vendors. However, it still lowers local retail profit margins and encourages law breaking. Other than that, agree with the video. Not all taxes should be progressive, and a general business-friendly environment is often more valuable than low taxes. As always in economics, it's a question of balance. One key aspect that's difficult to quantify is the local culture, which in Denmark encourages people to trend toward the middle, while in some other countries (especially the US) it encourages people to go to the extremes. Each one of these has its own pros and cons, from an economic standpoint.
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  2. ​ @LarsPallesen  Obviously this is not what I was referring to. Local retailers have to compete against international retailers who will gladly ship to Denmark. A few large international retailers don't care about Danish laws, and most small ones can't enforce them in the first place. There is always some cheap competitor abroad who will sell cheaper inferior products, but a high VAT means that local retailers need to sell the exact same products for 25% more. Granted, this is an over-simplification of international supply chains. However, the general gist is that higher VAT = local retailers are at a greater disadvantage. The law-breaking would be by savvy consumers who don't want to pay the 25% premium. Good luck enforcing it on every single personal import! Even better luck enforcing it on digital goods (software).
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