Denmark's largest union proposes a 5 billion kroner wealth tax targeting the top 1% to fund tax cuts and food subsidies for lower incomes. The Fagbevægelsens Hovedorganisation (FH), representing 1.3 million members, presented its plan to Finance Minister Nicolai Wammen on Wednesday, framing it as a necessary correction to rising inequality.
A Targeted Tax for Broad Relief
The FH proposal calls for a new, targeted wealth tax on individuals with net assets exceeding 20 million Danish kroner. This threshold includes the value of stocks, pension savings, and primary residence minus debt. According to FH calculations, this would affect approximately the wealthiest 1% of the population and generate an annual revenue of 5 billion kroner. For illustration, a family with 16 million kroner in home equity and an additional 45 million in stocks and pension funds would pay an estimated 70,000 kroner in the new wealth tax.
FH Chairman Morten Skov Christiansen directly linked the proposal to current economic pressures. “Some are getting richer from stocks and property, while others struggle to make packed lunches and bills add up in everyday life,” he stated. “We therefore propose to increase the job deduction and give a food check to those with the lowest incomes. This means more money in the hands of ordinary wage earners, and most to those with the lowest incomes.”
Adjusting Top Tax and Funding Distribution
The plan includes a second major component: an adjustment to the top bracket of the income tax to prevent tax planning loopholes. FH estimates this adjustment would raise an additional 6.7 billion kroner. The combined revenue from both measures—totalling 11.7 billion kroner—would be redistributed. The job deduction (jobfradrag) would be increased for all income earners, while a targeted food check would be issued based on income level, ensuring support extends beyond those on transfer payments.
Christiansen argued that soaring food prices have acted as a magnifying glass on pre-existing societal disparities. “The difference between those who have the most and the least has grown. We need to create more breathing room in the everyday lives of the wage earners who work hard every single day,” he said. The proposal explicitly aims to put more disposable income into the hands of lower and middle-income families, potentially boosting consumer spending in local economies across Denmark's retail and service sectors.
Business and Capital Implications
While framed as social policy, the tax proposal carries direct implications for capital formation, investment, and private wealth management in Denmark. A wealth tax reintroduced after years of absence would directly impact asset holders, including investors in Danish equities, real estate in affluent areas like those north of Copenhagen, and private pension savings. Christiansen noted the geographical dimension, stating, “It is only reasonable that all those with large home equity and stock savings – especially north of Copenhagen – pay a little more to society.”
The proposal lands on the finance minister's desk amid ongoing discussions about Denmark's competitive tax structure for businesses and individuals. The direct reference to assets in stocks and property underscores a focus on taxing accumulated capital, which differs from the current system's heavier emphasis on taxing income. This shift in approach could influence long-term investment strategies for high-net-worth individuals and impact liquidity in certain asset classes.
Political Feasibility and Economic Debate
The FH, as a major labour market organization, wields significant influence in policy debates. However, the proposal faces a complex political landscape. The current government has not indicated support for a general wealth tax, and such a measure would require broad parliamentary backing. The plan is likely to reignite a classic economic debate: the trade-off between redistribution, economic incentive, and capital mobility.
Proponents will argue it corrects imbalance and fuels domestic consumption. Critics will contend it could discourage investment or lead to capital flight, potentially affecting the broader economy. The specific targeting of individuals with over 20 million kroner in net wealth is a deliberate political framing, designed to limit the proposal's direct impact to a very small, affluent segment while promising tangible benefits for a much larger group of voters and consumers.
A Proposal for the Budget Negotiations
By presenting the detailed plan to Finance Minister Wammen, FH has formally placed the wealth tax and redistribution package on the agenda for upcoming budget negotiations. The 5 billion and 6.7 billion kroner figures provide concrete numbers for political horse-trading. The success of the proposal hinges on its ability to be seen not just as a tax hike, but as a funded mechanism for widespread tax relief and targeted support during a period of high living costs.
The coming months will test whether the ‘Robin Hood’ narrative, as framed by FH, gains enough traction to shift the political calculus in a country known for both its high degree of equality and its sensitivity to capital taxation. Will the argument for ‘air in everyday life’ for millions outweigh concerns about taxing the assets of a few? The answer will shape Denmark's fiscal policy and economic discourse for years to come.