Denmark eyes early retirement plan funded by the wealthy, banks

Denmark will levy the equivalent of $480 million in new taxes on banks and wealthy investors to fund early retirement for some workers, Prime Minister Mette Frederiksen said Tuesday.

The early retirement fund for workers with particularly difficult jobs was a central campaign plank for Frederiksen’s Social Democrats party, and Frederiksen is seeking to use some of the political capital from her handling of the coronavirus to pass the measure through Parliament, according to Bloomberg.

“I can’t imagine that this won’t get a majority in Parliament,” she said Tuesday. If successfully passed, the taxes would take effect in 2023. Government projections estimate about 38,000 workers would take early retirement under the plan.

The nation’s financial sector has objected to the proposals, saying the increase would leave consumers with the expense. “The politicians cannot implement such a big tax on the financial industry and not expect us to pass the bill on to customers,” said Birger Krogh Nielsen, chief financial officer at Jyske Bank A/S.  

Finans Danmark, the Danish bankers’ association, said the measure would tax the industry to pay for reforms unrelated to banking. Finans Danmark head Ulrik Nodgaard added that the proposal “makes it more difficult for the financial industry to support growth and employment,” according to Bloomberg.

Provisions in the plan include a notional gain tax on business property investments and a cap on tax deductions for salaries above 10 million Danish kronor, or about $1.6 million. It would also impose a 1.5 billion kronor ($240.4 million) corporate tax on the financial industry and increase the tax on stock market returns to 650 million kronor ($104.2 million) by 2025.