Finland’s main opposition party, the Social Democrats (SDP), have unveiled a long-term tax plan looking forward to 2030. Recent polls suggest the party may be the country’s most popular, so could be on the way back into government after next spring’s election.
SDP chair Antti Rinne said on Wednesday that his left-leaning party wants to reform Finnish taxes to be more in line with those elsewhere in Europe while keeping overall tax rates low.
“In our model, taxation on ownership will be tightened, in other words taxation on capital gains income and ownership will be slightly heavier while taxation of earned income could even decrease,” Rinne said.
The SDP tax plan includes a specific working income support to encourage people to accept even low-paying work. The reform is aimed at lightening the impact of tax-like social security fees that are deducted from wages.
The party says that according to its calculations, the change would give someone with 800 euros a month in earned income an extra 30 euros in spending power. The legislative change would shrink state tax revenues by 50 million euros a year, estimates the SDP.
“The incentive to accept work while on social security would rise significantly,” says Rinne.
MP Timo Harakka, who leads the SDP’s tax committee, points out that the plan also includes changes to value added tax (VAT) intended to boost sustainable development.
Harakka argues that by adjusting VAT, the government would be able to guide consumption and production to help limit climate change, for instance.