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Survey: Nearly half favour progressive local taxation

Progressive taxation is based on the taxpayer's ability to pay.

Sanna Marin saapuu Pasilaan Ylen Studiotalolle.
Prime Minister Sanna Marin (SDP) said that more progressive taxes should be reviewed during Yle's municipal election debate in June. Image: Benjamin Suomela / Yle

Just under half of respondents are in favor of progressive taxation in a survey focusing on municipal taxes conducted by Uutissuomalainen.

A third of the survey's respondents were against charging people of higher income more in taxes, while 16 percent did not express a preference on the matter.

The debate on progressive municipal taxation came up during the local elections when Prime Minister Sanna Marin (SDP) said that more progressive taxes should be reviewed during Yle's municipal election debate.

National income taxes are progressive in Finland. The municipal tax is levied at a flat rate, although low-income deductions mean that municipal taxes are partially progressive as well.

"This topic of discussion comes up relatively often, and usually entails rather ideological and emotional arguments," Lasse Oulasvirta, Professor of Public Accountancy at the University of Tampere, told Uutissuomalainen.

Voters among left-wing parties and those earning lower incomes are typically in favour of progressive taxation while liberal and right-wing party-supporters and people on higher incomes are more sceptical of the model.

Oulavirta says that the consensus among economists is that municipalities should not be in charge of taxation that majorly impacts the distribution of wealth.

The University of Tampere professor also warned that tax progression that is adjusted by municipalities themselves would lead to tax competition and tax evasion, issues that national governments are trying to solve in international forums.

"It would result in unwanted (internal) migration," Oulavirta said, adding that upper income classes would move to municipalities that would allow for a lower tax rate while those of lower incomes could opt to municipalities with a more favourable income distribution.

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