DENMARK: The Artful Tax Dodger

Some Danes like to say that their country’s standard of living is so high that nobody can afford it. Or at least nobody can figure out how to pay for it. Last week, despite a provisional settlement, more than 250,000 workers were still out on strike in the worst general labor tie-up since World War II. Beyond the current strike is the issue of who pays how much for Denmark’s cradle-to-grave security. Danish taxes are among the world’s heaviest—nearly 53% of last year’s gross national product. Meanwhile, the biggest industry in the country is public administration.

Last year more than 40,000 Danes joined the government bureaucracy, bringing the total number to 500,000 (more than 20% of the national labor force of 2.4 million).

Is there any way to stop the endless increases in both taxes and bureaucracy? One political newcomer whose more or less serious answer is attracting increasing attention is Mogens Glistrup, 46, a Copenhagen attorney and head of the fledgling Progress Party. His solution: stop paying taxes altogether. Anything less drastic, he says, is “almost immoral.”

Glistrup is a creator of companies which do not actually produce anything, are capitalized for a mere $1,600 and are ready-wrapped with the necessary legal documents. He has created 2,591 such companies since 1970. Some of them are sold to Danes who want tax shelters; the others he keeps for himself. By making his companies borrow money from each other, and pay tax-deductible interest to each other, he manages never to show a profit and thus never to pay taxes.

For the past year, baffled Danish authorities have been searching through Glistrup’s books for some secret that would explain his legerdemain, but Glistrup insists that there is no secret. “My yearly accounts are always negative,” he boasts. “I explain this to the tax people. They agree. As a lawyer, I should welcome this absurd theater, so absurd that it beats Ionesco completely, but what I want to do is show how unreasonable these tax laws are.”

Glistrup disapproves not only of the way Danish taxes are collected but even more of the way they are spent. Denmark’s $8.2 billion budget could be cut by at least one-fifth, he says, and 80% of the civil servants transferred to productive jobs “without harming the socially weak.” He proposes closing all Danish embassies abroad, for example, since Denmark really has no independent foreign policy. The Danish army? Disband it, Glistrup advises. “We should replace the general staff and the Ministry of Defense with a Russian-language recording that says ‘We surrender.'”

Despite his irreverent views, Glistrup himself is a very serious worker. He gets up at 2:30 every morning at his home north of Copenhagen, takes a swim in his indoor pool, studies papers for a couple of hours, then catches the 5:18 train to town, where he labors on, undisturbed, until his 76 associates and secretaries arrive. His law firm is, in fact, Denmark’s largest.

There is just enough method in this fiscal revolt to provoke genuine worry in Prime Minister Anker Jorgensen’s Social Democratic government. In the past month alone, according to one poll, support for Glistrup’s ideas has quadrupled, to 18% of the voters. His Progress Party is already beginning to draw defectors from among the Social Democrats. It is quite possible that if an election were to be held right now, Glistrup and his followers could win more than 30 seats and become the second strongest among the six major parties in the 179-member Parliament. A year from now, says Glistrup, he expects to win a lot more.