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Go Figure, Bernie: America Beats Scandinavia in Take-Home Pay

July 29, 2015

By Preston Cooper

Democratic presidential candidate Senator Bernie Sanders (I-VT) frequently pines for the United States to be more like the Scandinavian countries of Norway, Sweden, Finland, and Denmark. He cites the northern European nations’ lower levels of income inequality, when compared to the United States, as justification. But there is one problem: although income in these European countries may be more equal, workers get smaller paychecks.

On paper, workers in Scandinavia appear richer than their counterparts in America. But to compare accurately life in the two regions, we need to make a couple of adjustments. The first is taxes: according to OECD data analyzed by the Tax Foundation, the “tax wedge”—the difference between what it costs to employ a worker and what he sees in his paycheck—is much higher in Scandinavian countries than in the United States. After taking out taxes, we also need to adjust take-home pay by the country’s price level, since goods and services cost more in some countries than others.

Making these changes shows the real take-home wage of a worker who earns average wage. The following chart compares these amounts across the 34 countries of the OECD...

Read the full article at the Manhattan Institute: Go Figure, Bernie: America Beats Scandinavia in Take-Home Pay

Issue Categories : Entitlements & Welfare, Taxes