Despite the fact that the 1993 income tax reform in Denmark implies a
fairly sharp change of the basic principles underlying capital income
taxation, there has not been very much discussion of this change of di
rection. The main aim of the present paper is to indicate this change
and to stress a number of implications of the recent tax reform. With
the recent tax reform Denmark has taken a first step to reduce the hea
vy reliance on ordinary income taxation as far as labour income is con
cerned The same is not true Of capital income taxation and capital inc
ome tax rates in Denmark will remain very high compared to the Nordic
and other countries.