Does paying tax make you happy? One could believe it, to see the classification of the countries which consider themselves happiest here below.
Posted at 9:00 a.m.
Year after year, Finland and the Scandinavian countries rank first among the countries in the world that consider themselves the happiest. The taxpayers of these countries are also those who bear one of the highest tax burdens. This annual ranking, called the World Happiness Report, is established by the Sustainable Development Solutions Network, an independent initiative of a group of experts from all walks of life, including the economist Jeffrey Sachs, under the aegis of the United Nations.
The exercise may seem futile, but it is not that much. The ranking uses global data from the Gallup polling firm on the opinion that the inhabitants of a country have of their quality of life and then cross-references this with official statistics, such as life expectancy, the level of education and gross domestic product per capita.
The results of this annual exercise, which is in its 10and year, are of great interest to a growing number of leaders who believe that the well-being of the population should be a more important objective for governments than the increase in GDP.
In Quebec, a group of economists, academics and employer and union representatives, the G15+, is currently working on a “happiness index” based on 51 measures of individual and collective life, with the aim of measuring and improve the well-being of the population.
Few changes in mind
The 2022 world happiness charts are not much different from the previous year, despite the pandemic that has ravaged the planet. Finland retains first place for the fifth year in a row. All Northern European countries top the list of 150 countries. The three countries that rose in the ranking are Serbia, Bulgaria and Romania. Those that have fallen the most are Lebanon, Venezuela and Afghanistan.
Canada is at the same rank as the previous ranking, 15andbut has been plummeting for several years since it was already fifth on the world happiness charts.
What is obvious in the ranking of the World Happiness Report is obviously that the countries that occupy the first ranks are those where the tax burden is the highest. High taxes make it possible to provide quality public services, which contributes to the well-being of the population. It is also a feature of the Nordic countries, where the health and education systems are considered the best in the world.
Another observation: the countries of top 10 are small countries with relatively few populations. These two characteristics are linked, insofar as it is easier to maintain a fair and progressive tax system, a guarantee of social peace, in smaller societies.
From year to year, the authors of the World Happiness Report note that the level of social cohesion and reduced inequalities play a major role in defining the happiness of a population.
The Wealth Factor
It should be noted that wealth also plays an important role in the equation. The happiest countries are not the richest, but their GDP per capita is among the highest of OECD countries, the exception being Luxembourg, where the importance of the financial sector and the small population unbalance the statistics .
Money doesn’t buy happiness, we know that. Canada and Finland have similar GDP per capita, but 15 steps separate them on the happiness scale.
Many studies have shown that above a certain level, increased income does not lead to any additional well-being. This has been called Easterlin’s paradox, named after the American economist who studied the relationship between money and happiness.
Money may not buy happiness, but it certainly does. At the other end of the happiness and wealth level scales, the relationship between money and happiness is direct. The countries that have fallen the most in the 2022 ranking, Lebanon, Venezuela and Afghanistan, are countries that are experiencing a serious economic crisis. And those who are least happy are still, year after year, among the poorest countries in the world.