ANTTI RINNE, the chairperson of the Social Democrats, says the tax programme of the opposition party would create one billion euros in revenue without raising income taxes on any wage earners.
“Our tax policy approach is to have as broad a tax base as possible and as strict a tax rate as possible, meaning there should be no gaps [in the form of tax cuts of breaks],” he explained during an election debate organised on Wednesday by the Taxpayers Association of Finland (TAF).
“The programme […] allows us to raise a bit over a billion euros in revenue without increasing taxes on anyone,” said Rinne.
The Social Democratic Party, he added, also believes it would be possible to generate an additional 400–600 million euros in revenue by moderately raising the withholding tax levied on the dividend income of institutions.
“At Germany’s level, we’d get to one billion euros,” he said.
The Taxpayers Association of Finland asked Rinne, Prime Minister Juha Sipilä (Centre), Minister of Finance Petteri Orpo (NCP) and Pekka Haavisto, the chairperson of the Green League, to tell how they would generate revenue for the central administration if the attempts to promote employment failed.
All four agreed that promoting employment growth is the most effective means to generate additional revenue. “Every percentage point [added to the employment rate] equals to roughly a billion euros for the public economy,” highlighted Sipilä.
Orpo, in turn, reminded that it will be necessary to create hundreds of millions of euros in revenue every year due to cost pressures arising from population ageing. With the world economy, eurozone economy and national economy all showing signs of slowing down, there is absolutely no room to ramp up spending, he added.
Haavisto proposed a combination of spending cuts and tax increases, saying the first item on his agenda would be to slash state subsidies for businesses.
“Finland is giving away around 3.5 billion euros a year in subsidies that are harmful to the environment. Of course you can cut things like these. You at the same time have to take care of services and the elderly,” he said.
Rinne also expressed his frustration with the calls for hard-line economic policy.
“I was away [on sick leave] for a few months and the experiences I got show that we have to make sure that no one has to be afraid of getting old,” he stated. “That’s why I’m a bit concerned about this tax talk. You can’t provide the services of a welfare state without any tax revenues. They have to be spent efficiently, smartly for people.”
Orpo responded by saying he agrees that key welfare services, elderly services and social and health care services must be maintained.
“But you’ll need tax money to do that, and in order to get tax money you have to have competitiveness and jobs. You have to be able to create competitiveness and jobs, and you can’t do that by raising taxes,” he argued.
His assessment was echoed by Sipilä: “Raising taxes is toxic for the employment rate.”
Aleksi Teivainen – HT
Source: Uusi Suomi