Following World War II, as with many other countries, Denmark began to enact several social welfare programs, including aid for the sick and the unemployed. From 1897 to the present, Denmark continued to boast exceptionally high income tax rates, never dropping below the top five countries in Europe in terms of percentage revenue earned from income taxes. By 1897, Denmark's income tax encompassed 15.00% of the state's total revenue, far surpassing any other European country at the time. Massive population growth resulted in expansion of agriculture and consequently an expansion of taxes gained from tariffs on exports and wheat sales. In later conflicts such as the Scanian War and the Great Northern War, however, Denmark ceded much of its territory, resulting in monetary losses that prompted higher tax rates and the introduction of an initially small income tax. The costs of warfare, such as those of the Thirty Years' War, were further fulfilled by Denmark's heavily agricultural economy. In fact, the Dues comprised two-thirds of Denmark's tax revenue throughout the sixteenth and seventeenth centuries. In the sixteenth century, Denmark primarily obtained state income through taxes excised on feudal Demesne lands and the Sound Dues, which required foreign ships to pay a toll when passing through the Øresund bordering Denmark. The types and levels of taxation in Denmark have changed dramatically since the state's inception. The state personal income tax is a progressive tax while the municipal income tax is a proportional tax above a certain income level. Today various personal and corporate income taxes yield around two thirds of the total Danish tax revenues, indirect taxes being responsible for the last third. Ever since the income tax was introduced in Denmark via a fundamental tax reform in 1903, it has been a fundamental pillar in the Danish tax system. Taxation in Denmark consists of a comprehensive system of direct and indirect taxes.
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