Prime Minister Sanna Marin’s proposal to increase municipal tax rate progressivity would hit individuals earning more than 4,000 euros per month, reports Helsingin Sanomat on Saturday.
Marin made the suggestion at an Yle election debate earlier this week when she noted that high earners could play a bigger role in funding municipal services.
Minna Punakallio, a chief economist at the Association of Finnish Municipalities, told HS that Marin’s suggestion would demand a broader taxation rethink to prevent incentive traps.
"Because Marin’s goal is not to raise the level of overall taxation, this change would target people making 50-60,000 euros a year and more," she said.
Introducing local tax progressivity would also broaden inequality between municipalities, as towns with higher earners would collect more taxes, according to Punakallio.
Marin told Yle that, in her view, increasing progressivity did not amount to raising taxes. HS, however, notes that municipal taxes have risen over the past 20 years.