Denmark's far-left Enhedslisten party has drawn a hard line in the sand ahead of this year's parliamentary election. The party will only support a red government coalition if it agrees to reinstate the wealth tax abolished in 1997. Source: Statistics Denmark.
Pelle Dragsted, Enhedslisten's political spokesperson, told Berlingske that any cooperation agreement "must contain a commitment to combat inequality. It is an ultimate demand for us that inequality is addressed."
The demand puts Denmark's Social Democrats in an uncomfortable position. Mette Frederiksen's party needs Enhedslisten's seats to form a majority, but the wealth tax proposal could alienate moderate voters who helped the Social Democrats win power.
The 35 Million Kroner Threshold
Enhedslisten wants to tax wealth above 35 million kroner at one percent annually. The party defines wealth broadly, including liquid assets, securities, unlisted shares, property, and pension savings minus debt.
According to Skatteministeriet calculations, this would affect approximately 14,000 Danes and generate 10 billion kroner annually for the state treasury.
That revenue would fund Enhedslisten's plan to halve VAT on food and eliminate it entirely on fruits and vegetables. It's a populist pitch that could resonate with voters struggling with inflation, but the math reveals the party's priorities: tax the wealthy few to subsidize groceries for everyone.
Nordic Wealth Tax Revival
Denmark eliminated its wealth tax in 1997 during Poul Nyrup Rasmussen's Social Democratic government, part of a broader trend. According to Wikipedia data, twelve countries including Denmark, Finland, Iceland, Norway, and Sweden had wealth taxes in 1995. Most have since abandoned them.
The timing of Enhedslisten's ultimatum is deliberate. With parliamentary elections required by October 31, the party is forcing Social Democrats to choose between ideological purity and electoral pragmatism. Dragsted already told DR and Politiken in December that Enhedslisten would only back Frederiksen as prime minister if she commits to forming a purely red government.
This creates a mathematical problem for Danish Social Democrats. They need coalition partners to govern, but Enhedslisten's demands could push centrist voters toward the Liberal Party or other moderate alternatives. The wealth tax debate will test whether Denmark's political center can hold against populist pressure from both flanks.
Expect Frederiksen to delay any commitment on wealth taxation until after the election, hoping to negotiate down Enhedslisten's demands once votes are counted and coalition arithmetic becomes clear.
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