Denmark’s new coalition government unveils agenda centered on taxes, welfare

Denmark‘s new coalition government unveiled its policy agenda Tuesday, focusing on taxes, expanded welfare measures and tighter social media regulations for children.

Broadcaster DR revealed key elements of the agenda after the Social Democrats, the Socialist People’s Party (SF), the Moderates and the Danish Social Liberal Party reached an agreement to form a coalition government led by Prime Minister Mette Frederiksen.

The government plans to abolish the top-top and middle tax, leaving a basic tax rate for annual incomes up to 777,900 Danish kroner ($121,157) and a 15% top tax on income above that level.

The abolition of the top-top tax will be financed through a new system known as the “principal shareholder model,” aimed at bringing the marginal tax rate paid by major company shareholders closer to that paid by top-income earners.

Part of the tax cuts will also be financed through other tax increases.

The government plans to make public transportation free for children and young people up to the age of 22. It also aims to halve the VAT on all food products and eliminate it on fruit and vegetables.

It will not reportedly reduce fuel taxes on gasoline and diesel despite proposals from several parties. It will instead increase the commuting tax deduction.

The coalition also intends to implement an agreement reached last year setting a minimum age of 15 for social media use. The government, however, plans to scrap a provision allowing parents to exempt children as young as 13 from the age limit.