It is not the most popular thing to say but there it is I have said it. Taxes are not bad and the current tax system in Iceland is a cause of debate when I talk to many Icelanders. I don’t want to whine about it, I just want to get on with creating great companies who don’t care about the tax regime as they make enough money and more to pay for them. What we should be asking is how are the taxes being utilized. All Icelanders whom I speak to say that droves of Icelanders will leave the country because of the tax regime, I don’t believe that. This post is by no means in support of the current government in Iceland or for that matter any government. I think everyone has to do a cost benefit analysis to live in a society, and I believe the benefits of living in Iceland far out weigh the costs in my personal analysis. Yes, taxes and cost of living is high, but so is the standard of living. I think one of the least talked about competitive advantages in Iceland is the amount of time one has here. I can have a fully productive 9 hour day and get all my chores done and be home by 17:30. I have lived in Houston, worked quite a bit in Silicon Valley and NYC believe me there is no way I can get this much done and have time for myself.
I did an analysis of the Government expenses as a percentage of GDP in Iceland, if you have not used the data that is published by Statistics Iceland, I highly recommend you do. If you see the trend it is quite clear where all the new tax rises are going it is being used to pay Households (34% increase from 2008) and for Social Security benefit (31% increase since 2008). I am not a big believe in the social benefit society or entitlement society but that is where the big increases are since the financial collapse in 2008. Another item that should be troubling is the increase in the purchases by the government. Who audits the Government? Are the purchases justifiable? What are we spending on Social Security benefits? these are the questions that Iceland should be asking its government not why are the taxes so high.
if you are interested in viewing the data and the graphs you can find it here
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