Pörssi: Is Finland afraid of Wealth?
@ 12:56 pm 
According to a professor at the Helsinki School of Economics, foreigners now own over 50% of Finnish companies listed on Helsingin Pörssi, and the number is increasing. I think it’s absolutely wonderful that foreign investors see value in Finnish enterprises. It shows that Finland is hands-down competitive and efficient at the corporate level. Foreign ownership is good because it provides necessary capital to innovate and expand. But there’s also a drawback; it means that foreign individuals are collecting over 50% of the profit from Finn-labor in the form of Stock Dividends. And that profit is taxed in their respective home countries. Let’s look at an example to illustrate the concept.
Consider Nokia’s Income Statement. Find the line Gross Dividends-Common Stock near the bottom, and notice that Nokia recently paid-out 1.55-Billion in Dividends to its Shareholders. Let’s say the individual recipients pay 33% taxes on that amount in their respective home countries. Here’s the calculation:
1.55-Billion-Euros * 33% = .5-Billion- Euros in total tax revenue from Dividend Income
Now, if over half of Nokia stock is owned by individuals who reside outside of Finland, then Finland loses over half of that tax revenue. That means Finland loses a quarter-of-a-Billion-Euros of tax revenue each year—all from just one company!
Does anyone happen to know the total market capitalization of Finnish industry? It would be interesting to draw some inferences about how many Billions-of-Euros in tax revenue Finland loses each year. And none of that even considers the many more Billions-of-Euros in equity and potentially productive capital that Finland loses to foreign sources.
We’d like to think that Finns have enough foreign investments of their own to cover the deficit. But considering Finland’s wealth ranking, it’s not very likely. Instead, Finns’ net equity balance from publicly traded, income producing investments is far less than that of people’s in countries wherein capital that funds Finnish industry is sourced. Hence, Finns experience a significant net-outflow of profit, whereas people of other countries experience a net-inflow.
To compensate for the loss in profit, tax revenues and productive capital, Finland has dramatic over-taxation which causes an extremely high cost of living when considering a wide range of products and services. But even the over-taxation isn’t enough to keep the Finnish Ponzi scheme economy afloat. It also requires saving money via, e.g.— providing low-budget healthcare to the poor and maintaining protectionism schemes via cartels and assorted ripoffs like Autovero and Alko . All exist with the primary purpose of pilfering the last remaining coins out of each Finn’s pockets. And all are significant barriers to savings and investment. Can it continue this way forever?
Considering the enormous amount of untapped tax revenue and equity that is available, as demonstrated above—and considering that Finns have absolutely no qualms about- and even happily support- letting the world’s evilest Oligarchs fund Finnish industry and thereby profit from Finnish labor—wouldn’t it make sense to restructure Finland’s tax system in such a way that would permit capital to accumulate here in Finland instead?
Of course, this would mean allowing Finns across the entire range of income and wealth levels to reside in Finland. Undoubtedly, some big Finns would emerge. But we could take solace in knowing that their contribution would make life much easier financially for the smaller Finns among us. After all, we’re not competing for capital amongst each other, but rather we seek to acquire it from the global market. Hence, it’s win-win for the Finn.
This leads me to ask the social-psychologists out there: Does Finland still have a left-over complex from the Swedish period? That is, must the owners of Finnish destiny always come from the ‘outside?’ Or can Finns eventually become the owners of their own destiny?
Strangely it seems that a more even distribution of wealth, even if it leads to fewer billionaires, has not prevented us from creating a society with high social mobility, good universal education and quite well functioning basic universal health care. Health care problems btw are not related to the number of billionaires, as the US example so convincingly proves. So, what is exactly your problem: should we have more gated communities, closed elite schools (and corresponding hopeless slums with no fair educational facilities), sky high university fees and less social mobility? What is wrong with this country that combines a dynamic economy with an astonishingly level playing field for all? What Western country is significantly better? Apart from Switzerland, of course…
Comment by mjr — Tue, Apr 10th, 2007 @ 1:22 pm
You say..
“Now, if over half of Nokia stock is owned by individuals who reside outside of Finland, then Finland loses over half of that tax revenue. That means Finland loses a quarter-of-a-Billion-Euros of tax revenue each yearâ€â€all from just one company!”
First point it is that Nokia is by definition a “Multi National Company”…so one would expect that stock is spread world wide.
It can hadly be only Finnish owned.
Second point..If half is still Finnish owned that is not a bad perecntage/tax income.
I cannot think of many Multi-nationals that are more than 50% ownwed by stockholders in a country with only 5 million population.
Comment by Karhu — Tue, Apr 10th, 2007 @ 2:04 pm
Phil, can you please fix my links. The new editor is nice, but I couldn’t figure that part out. Thanks.
Comment by Kristian — Tue, Apr 10th, 2007 @ 2:22 pm
Karhu—you need to go down two-paragraphs to understand it better. I just added a tiny bit for clarity.
mjr: “What Western country is significantly better? Apart from Switzerland, of course…”
mjr—Switzerland’s prosperity would be a GREAT target for Finland. No low-budget healthcare for poor people, no significant shortages in education,etc. It’s an example of how a country can benefit from an inflow of profit, rather than an outflow. Thanks for pointing it out.
Comment by Kristian — Tue, Apr 10th, 2007 @ 2:22 pm
Finland has a steady stream of exports. That is what you tax. Not much, just enough to constantly feed the coffers without burdoning the products with a drastically higher price.
Finland benefits from being such a small country in that it has the whole world to export to, and has products to export. The US, has a huge domestic population, concentrated in cities that do nothing but consume. The same goes for other industrialized nations. Take advantage of that.
The trick is to then give back some of the other taxes, such as items coming into th ecountry. Say, no tax on your first car. Need a second car, then tax that one, you rich bastard. Too bad that will never happen, because of the car haters, and the anti-consumption league, and the tax-everything group. How about taxing idle-time, or even breathing?
Comment by Fred Fry — Tue, Apr 10th, 2007 @ 2:55 pm
In the US, the tax on dividends has been lowered to only 15% in most cases. (As the money was already taxed once, and this was the leftover/remaining profit.)
American companies normally distribute dividends every quarter instead of once a year as in Finland.
Comment by Fred Fry — Tue, Apr 10th, 2007 @ 2:59 pm
“The US, has a huge domestic population, concentrated in cities that do nothing but consume. The same goes for other industrialized nations. Take advantage of that.”
Let’s see..US household savings rate has been negative for two years now (last time 1932, 1933) and housing bubble is bursting big time. Subprime meltdown was only the first phase, there will be a lot of trouble ahead.
You dumb idiots have been doing TAX DEFERRALS ever since Reagan years, not tax cuts. Tax cuts actually mean that you cut also spending or balance the budget at least somehow. Basically, only running costs have been covered by government, states and cities.
Infrastructure repairs and pension funds are way underfunded and huge liabilities are waiting in near future (meaning TRILLIONS of dollars). From world biggest creditor nation back in 1980 to world biggest debtor nation today. Even drunken sailors would be ashamed of Americans and their spending party.
We will see how Fred&Winter brag about “superior” US economy even six months from now…I think, we will hear only silence from them…
Comment by tim73 — Tue, Apr 10th, 2007 @ 7:19 pm
The biggest investors by far are nowadays institutional, pension funds in particular. I don’t know how much these funds have money in Finland, but the public work-related ones have well over 100 billion (which by the way is only little less than what the Wider report made the whole wealth of the Finns, cheap dwellings in Finland!).
The value of the public shares of Finnish companies is probably over 150% of the GDP - a world record in all likelihood - perhaps something like 250 billions euros. It means that those funds couldn’t buy all the shares even if they invested only in Finnish companies. That’s something they naturally don’t do, less than 30% is in domestic shares, bonds and the like. No wonder that foreign pension funds have a big part of the shares.
In his typical fashion Kristian is spreading disinformation for some unknown reason. Accumulating capital is more or less as easy in Finland as in other rich countries. The wealth of a typical household has risen in the past ten years probably more than anywhere among the rich countries … mainly because the prices of dwellings have risen to their “normal” level after the depression of the early 90s, but also because of particularly strong economic growth.
And of course foreign investors pay taxes to Finland, or more precisely: some do, some don’t depending on international agreements.
Comment by tsuhna — Tue, Apr 10th, 2007 @ 7:26 pm
Currently Finland is running a current account surplus so our net international investment position is improving. Does the taxation affect this? The US has generally lower taxation than Finland, but is currently running a rather large current account deficit.
Comment by Ossi — Tue, Apr 10th, 2007 @ 8:08 pm
@8: “I don’t know how much these funds have money in Finland, but the public work-related ones have well over 100 billion (which by the way is only little less than what the Wider report made the whole wealth of the Finns, cheap dwellings in Finland!).”
Are you saying that Wider forgot to count the value of Finnish pension funds?
If so, do you think they forgot to count pension funds of other countries too? Or does only Finland have pensions?
Comment by Kristian — Tue, Apr 10th, 2007 @ 8:13 pm
Oh, and just as an aside… I don’t view Pensions as personal wealth, because you can’t pass that money to your children or heirs.
In fact, I see them more as an awkward liability for many (Old Europe) countries because their sustainability depends on birthrates……or immigration.
Comment by Kristian — Tue, Apr 10th, 2007 @ 8:21 pm
Ossi:”Currently Finland is running a current account surplus so our net international investment position is improving. ”
It depends on what type of account surplus you mean.
A trade surplus means that Finland sells more than it imports.
A budget surplus means that the government is spends less than it receives in tax revenue. To analyze why the US has a budget deficit, we need to look at where the money is going these days :-/
“Does the taxation affect this?”
It directly effects a budget surplus/deficit. There are choices:
1). A narrow tax base, but high tax rates for everyone;
2). A wide tax base, but low tax rates for everyone.
Each has the possibility to earn either the same amount_or_less_or_more for the government depending on how it’s implemented.
Currently, Finland has the first one; it’s very expensive for everyone and impedes personal investment. My post describes how to move toward the second one.
Comment by Kristian — Tue, Apr 10th, 2007 @ 8:44 pm
It’s Helsingin pörssi not Helsinkin Pörssi..LOL
Comment by Anonymous guy — Tue, Apr 10th, 2007 @ 9:09 pm
Kristian:
“It depends on what type of account surplus you mean.”
I mean the current account surplus just as I said.
“A trade surplus means that Finland sells more than it imports.”
Current account balance takes into account not only the trade balance but also income account balance, which difference what we earn on our investment abroad and what foreigner earn on their investment in Finland (in the form of interest, dividends etc.).
“It directly effects a budget surplus/deficit.”
“To analyze why the US has a budget deficit…”
I was talking about the current account surplus/deficit not the budget one. Of course taxation affects the government budget, but that’s not what I was talking about. Does taxation affect national savings, which ultimately determine the national savings?
Also I think I should comment on this:
“Instead, Finland’s net equity balance from publicly traded, income producing investments is far less than that of countries wherein capital that funds Finnish industry is sourced. Hence, Finland experiences a significant net-outflow of profit, whereas some of those other countries experience a net-inflow.”
That is totally false. You should check your facts better. Finland’s income account is positive (though not by very much) according to the Bank of Finland. See:
http://www.bof.fi/bofinternet/ohi/bofin/bof_582_1i.html
This is eventhough our net international investment position is negative by about 24 billion €. That must mean that our investments abroad are more profitable than foreigners investments here.
Comment by Ossi — Tue, Apr 10th, 2007 @ 9:13 pm
“Does taxation affect national savings, which ultimately determine the national savings?”
Should be:
“Does taxation affect national savings, which ultimately determine the current account balance?”
Do’h!
Comment by Ossi — Tue, Apr 10th, 2007 @ 9:14 pm
Tim73,
“Even drunken sailors would be ashamed of Americans and their spending party.”
SAILORS SPEND THEIR OWN MONEY.
Governments spend money they take from you.
That negative savings has been going on forever. The housing market will collapse, so what.
However, if the US economy collapses, where doe that leave Finland and it’s export market?
Comment by Fred Fry — Tue, Apr 10th, 2007 @ 9:21 pm
If the US economy collapses? This doom and gloom again? Have we heard this for how long? 30 years?
If the US economy collapses, so does the EU, so does China. Me thinks the world has changed guys, it called G L O B A L economy, as we all are, in the same pot of soup.
My do we taste good, all together, all nice and friendly to each other, all swimming the happy swim.
Comment by winter “Against stupidity, the gods themselves are helpless.†— Tue, Apr 10th, 2007 @ 9:42 pm
“However, if the US economy collapses, where doe that leave Finland and it’s export market?”
USA as trading partner is for us roughly as important as UK.
Finland, Exports, 2006:
Country - millions - percent
Germany - 6934 - 11,3
Sweden - 6432 - 10,5
Russia - 6215 - 10,1
USA - 4011 - 6,5
Great Britain - 4001 - 6,5
Netherlands - 3153 - 5,1
France - 2043 - 3,3
China - 1971 - 3,2
USA is much more important to poor sweatshop Asian countries than for EU. We have customers all over the world. If and when US economy collapses, it will have dire consequences to us all but especially to many indebted Americans themselves with no savings for the rainy days.
USA is basically checkmated. Start printing money to dilute debt and dollar will collapse. Oil will cost 20 dollars or more per gallon. If you don’t do that than ever-increasing debt burden will crush the economy anyway.
Comment by tim73 — Tue, Apr 10th, 2007 @ 9:54 pm
“Finland experiences a significant net-outflow of profit, whereas some of those other countries experience a net-inflow.â€Â
Ossi: That is totally false. ”
I agree. It was poor wording on my part. I was trying to describe the relative proportions of ownership of publicly traded, income producing investments by private individuals. It was not meant to encompass entire national economies, institutional investment or even investments by corporations. Maybe I should change the wording?
Comment by Kristian — Tue, Apr 10th, 2007 @ 10:07 pm
“It was poor wording on my part. I was trying to describe the relative proportions of ownership of publicly traded, income producing investments by private individuals. It was not meant to encompass entire national economies, institutional investment or even investments by corporations. Maybe I should change the wording?”
Perhaps. I’m pretty sure atleast part of that 50% is owned by institutional investors, maybe even a large part, though I’m not sure since I don’t have any data on that.
Comment by Ossi — Tue, Apr 10th, 2007 @ 10:35 pm
“USA is basically checkmated. ”
with that growing GDP, some 2x Growth rate over the EU, and which grew so much in the last 6 years we mached he enire China GDP, in just growth alone.
Sounds bad
with a low unemployment rate, some 2x or even 3x under the EU.
Sounds real bad
The average USA peasant has $10 000 more to spend at Walmart.
Sounds really bad.
Do we really have to go on…….
Comment by winter “Against stupidity, the gods themselves are helpless.†— Wed, Apr 11th, 2007 @ 12:17 am
Where does this crap about the importance of repatriation of dividends come from? Have you been reading Mussolini?
Comment by P — Wed, Apr 11th, 2007 @ 12:21 am
Ossi: “I’m pretty sure atleast part of that 50% is owned by institutional investors…”
I realize that a portion of that 50% is owned by institutions. My main goal is to present an easy example that can be commonly understood by anyone. In particular, I try to demonstrate that there is lots of global capital out there and how it can benefit people both on a personal level and in widening Finland’s tax base.
Comment by Kristian — Wed, Apr 11th, 2007 @ 12:24 am
This blog is getting boring now that Kristian is writing all the time. I may have to take it off my favourites.
Comment by Anonymous — Wed, Apr 11th, 2007 @ 8:25 am
I would say it’s time for some regulars to get their own blog and followings (or even start their own evangelistic church - they begin to sound like religious figures.)
On the topic: the culture of wealth don’t seem to be discussed here; more often it’s about how to get wealthy or stay that way. I am more curious about how Finns think and use their wealth. The 60’s to 80’s generation have moved up, so what do the new generation of Finns think about wealth? Do they follow the world trend of capitalism and consumerism, or do they still share the values that served Finland in the past?
Personally, I don’t think Finns (or people from any other nationality) are afraid of wealth. If the financial structure in Finland seems that way (which I doubt it is), perhaps there are hidden factors that should be explored. There is no one-for-all cure for this perceived lack of wealth.
Also, wealth is more than just material possession - environment, culture, and well-being are part of it, but it’s better to stick to one discussion at a time.
By the way, has Phil been assimilated into the Finnish collective? Sometimes the homogeneousness in the thought pattern is striking.
Comment by David — Wed, Apr 11th, 2007 @ 9:21 am
My main goal is to present an easy example that can be commonly understood by anyone.
Why didn’t you make your dog eat the shares then? That would have been easy.
Comment by Anonymous — Wed, Apr 11th, 2007 @ 9:53 am
I am no economist, but I can’t understand how people understate the effects that a “collapsed” American economy would have on Finland.
Even if the U.S is only the 4th highest trading partner with Finland, it is Germany’s second largest trading partner. Is there no domino effect then? Please explain.
Comment by Unit — Wed, Apr 11th, 2007 @ 10:38 am
“I am no economist, but I can’t understand how people understate the effects that a “collapsed†American economy would have on Finland.
Even if the U.S is only the 4th highest trading partner with Finland, it is Germany’s second largest trading partner. Is there no domino effect then? Please explain.”
In the long term it is not healthy that one of the major players (US) is borrowing more and more money to throw away at the mall. The money is not going to investments that would generate future money flow. Stupid Asians are also financing this party (byand instead of supporting their domestic markets, they have way oversized export sectors. THEY are the ones shouting “USA! USA! Number One!”
When their main customer (US) will stop spending, which is happening right now, those missinvestents will cause major troubles. It is like a bartender borrowing money to a broke alcoholic to buy drinks in hope that one day he will sober up, find a job and start paying back the bill.
EU has quite strong internal demand and not so dependent on one particular export market. There is almost 500 million people in EU now and it is quite self-sufficient.
Comment by tim73 — Wed, Apr 11th, 2007 @ 11:23 am
There is no one-for-all cure for this perceived lack of wealth.
Well, I don’t think that there is any mysterious “lack of wealth”. The only mystery, perhaps, is why certain people don’t see that if one compares Finland’s figures from 1998 to any other country - particularly when other figures are mainly from the year 2000 or even later - there is bound to be a huge discrepancy. After all, Finland went through a depression in the early 90s which pretty close ruined Finland’s economy. Enormous amounts of wealth got lost. In 1998 the economy had just started to recover.
So, from this perspective, it’s no wonder that the wealth of households rose rapidly from 1998 onwards. After just six years, in 2004, the wealth of an average household had risen by 47% to 147 450€ (financial assets by 74%). This figure doesn’t include any “investments” in the (public) retirement funds unlike in many other countries which further skews the picture. Since 2004 the figures must have risen further but there is no newer data available.
I’m certain that 147 450€ per household doesn’t make Finland the richest country in Europe, not even close, but for this relative “poorness” there are historical reasons, the late modernization in particular.
Comment by tsuhna — Wed, Apr 11th, 2007 @ 11:26 am
Tim, as far as I’ve understood the “USA-China trading scheme” it works something like this: Americans buy Chinese stuff -> Dollars flow to China -> the Chinese invest the dollars (excluding the reserve) back to the USA -> US firms get money to pay salaries (and the Chinese more dollars they have to invest in the US) -> Americans buy Chinese stuff -> etc etc.
There is no theoretical reason why this scheme couldn’t go on for ever. The Chinese produce “stuff” for Americans and the USA produces good consumers - and military force to protect the system. In practice, I guess, some economical or political reconsiderations will break the circle sooner or later.
Comment by tsuhna — Wed, Apr 11th, 2007 @ 12:02 pm
“There is no theoretical reason why this scheme couldn’t go on for ever. The Chinese produce “stuff†for Americans and the USA produces good consumers - and military force to protect the system”
That is like saying “I continuously borrow my neighbour money, who is really good at eating so that he can buy from my farm potatoes, meat and milk”. This only works until to the point the neighbour is not even able to pay interests for that money or/and the farmer does not want to borrow anymore.
Comment by tim73 — Wed, Apr 11th, 2007 @ 1:31 pm
Speaking of the Chinese…. Notice the little asian piggies in the picture above. They have coin slots for saving money. I put those there as a reminder, that someone else is in competition with us for capital. As their standard of living increases, ours could potentially decrease….and many say it already has.
It underscores the importance of having a system that attracts capital on a more permanent basis and not just transiently for producing income. I wonder how much profit of Finnish labor is flowing to the Chinese….
Comment by Kristian — Wed, Apr 11th, 2007 @ 1:34 pm
Tim73,
Look, if the Dollar collapses, the Chinese currency will follow it down, (as it is now) if only to protect their export business. then the US can still get it’s cheap Chinese crap and the domestic manufacturing business will get real busy as we would not be able to afford anything from anywhere else. Then US Exports will skyrocket because US products will be cheap in the global market. That is already happening. 1Euro=$1.34
I don’t know about the rest of the country, but over here in Northern Virginia, we have full employment and our company, and many others, are desperate to hire more competant people.
And all of this in a sea of home ‘for sale’ signs and foreclosures. Why does that not effect the economy? Simply because the house flippers own many houses, concentrating the damage to the gamblers.
Comment by Fred Fry — Wed, Apr 11th, 2007 @ 2:25 pm
That is like saying “I continuously borrow my neighbour money, who is really good at eating so that he can buy from my farm potatoes, meat and milkâ€Â.
Not really, because the US economy constantly grows enough and steadily to keep the investors happy and trusting. And the more they invest, the better the economy performs. And even if they weren’t happy the Chinese government would make them so by force because breaking the circle would mean perhaps even a bigger crisis to them than Americans. And quite a large part of the dollars flowing back to the US are government dollars anyway.
By the way, I forgot to mention that they both, China and the USA, produce an ecological catastrophe, but they have to pretend that they don’t because otherwise they would endanger the scheme. “The more the better” has to be the mentality on the both sides of the Pacific.
Comment by tsuhna — Wed, Apr 11th, 2007 @ 4:05 pm
Fred—In the US, about half the people are able to regiment themselves into saving, whereas the other half consumes beyond its means. It seems like America really needs some type of forced savings/investment scheme for people. It would help the national situation.
But, I hate to say ‘forced’ because it really wouldn’t be fair to some. For example, why should someone who is diagnosed to have a limited life-expectancy be forced to save anything? And I guess there are some other philosophical reasons against it.
Regarding homes, I agree that much of the foreclosure is due to speculation—both professional and private. On the private end, Americans want BIG—REALLY BIG—houses because of the leverage effect they provide. After all, using the bank’s money to capitalize on a growth period makes sense….unless your own income suddenly drops or the variable interest rate on your loan rises.
And naturally there’s the prestige factor…
Comment by Kristian — Wed, Apr 11th, 2007 @ 5:05 pm
“Not really, because the US economy constantly grows enough and steadily to keep the investors happy and trusting. And the more they invest, the better the economy performs”
It used to be like that until roughly 1995 but then the debt growth has been exceeding the GDP growth and a lot. Nowadays it takes about 4-5 new debt dollars to get one dollar of GDP growth in the US. The idea of just grow out of the debt problem is not anymore feasible. Total market debt of GDP is over 300 percent, that is worse than during Great Depression.
“David Walker is a prudent man and a highly respected public official. As comptroller general of the United States he runs he Government Accountability Office, the GAO, which audits the government’s books and serves as the investigative arm of the U.S. Congress. He has more than 3,000 employees, a budget of a half a billion dollars, and a message he considers urgent.
“I’m going to show you some numbers…they’re all big and they’re all bad,” he says.
So bad, that Walker has given up on elected officials and taken his message directly to taxpayers and opinion makers, hoping to shape the debate in the next presidential election. ”
If your own HEAD ACCOUNTANT says you’re in trouble, you are in real big trouble….
Comment by tim73 — Wed, Apr 11th, 2007 @ 6:32 pm
the debt growth has been exceeding the GDP growth and a lot.
But does it really matter if nobody’s going to collect the debts? The investments are there for good - unless they’ll vanish in bankruptcies which of course is a real threat. The Chinese will keep buying new bonds and make other investments so long as they think it benefits them, which in all likelihood means the foreseeable future.
Comment by tsuhna — Wed, Apr 11th, 2007 @ 6:51 pm
Tim73 “That is like saying “I continuously borrow my neighbour money, who is really good at eating so that he can buy from my farm potatoes, meat and milkâ€Â. This only works until to the point the neighbour is not even able to pay interests for that money or/and the farmer does not want to borrow anymore.”
Sounds to me like the former Finnish economy and big bro next door? As for your predictions of US collapse, how long are yu going to persist with that one. Eventually you’ll say, “See I told you.” I think (shamed to say) that winter was on the ball in #17. The world has changed and you better hope the US economy doesn’t collapse as its roll on effect will certainly have dire results world wide.
As for the constant growth in Finlands wealth, wow, really??? When you are starting as low as Finland did be it early 1900’s, post WW2 or more recently following the recession of the 90’s
, it’s not hard to predict enormous growth. The secret is to maintain it decade after decade. It’s comparable to growth in China and reports of eg. growth in TV sets per household or new car sales. No relevance at all as 15 years ago, nobody had either. Now, in a country of 1.5 billion a few buy TVs and WOW, growth.
Comment by Punter — Wed, Apr 11th, 2007 @ 6:57 pm
Here’s a good illustration….
“The national debt is currently about 67% of GDP, so if every American dedicated their entire salary to paying it off, it wuold take 8 months (67% of a year).”
http://www.issues2000.org/askme/NatDebt.htm
If you read into it, you’ll see it is obviously a politically charged document. For example, they credit Clinton for reducing the debt percentage, but they fail to mention that there was a Republican congress in office during nearly all of his presidency. The Republicans prevented him from spending any money!
I suppose that everybody’s got an angle….
Comment by Kristian — Wed, Apr 11th, 2007 @ 7:06 pm
Kristian:
“Speaking of the Chinese…. Notice the little asian piggies in the picture above. They have coin slots for saving money. I put those there as a reminder, that someone else is in competition with us for capital.”
China isn’t competing with us for capital. Actually the Peoples Bank of China is working very hard to offset the inflows of foreign currency by increasing its reserves.
“It underscores the importance of having a system that attracts capital…”
I’m a bit confused. You were disappointed with foreign ownership of Finnish stock, which is a result of inflow of foreign capital into Finland. So I thought you wanted Finland to be a net provider of capital rather than a net reciever, but now you are saying the opposite.
Comment by Ossi — Wed, Apr 11th, 2007 @ 7:10 pm
I believe Finland’s debt is about 40% of GDP. Should we sound the alarms?
Comment by Kristian — Wed, Apr 11th, 2007 @ 7:14 pm
Ossi: “I’m a bit confused. You were disappointed with foreign ownership of Finnish stock”
No, I think you misunderstood my point. To have capital here as a transient investment is different from having capital here ‘permanently’—that is, owned by a resident of Finland.
In the latter case, no matter where it’s invested—abroad or domestically—the profit will return here to Finland.
The piggybank metaphor is to show that the chinese individual is competing for wealth against the Finnish individual.
Comment by Kristian — Wed, Apr 11th, 2007 @ 7:23 pm
The secret is to maintain it decade after decade.
AS Finland has done since the 1860s? Strangely enough, Finland has grown faster than the USA during most periods (in 1930s and after the WWII in particular). But catching up has been slow and it’s been interrupted by a couple of pretty disastrous periods (in 1920, 1940s and 1990s) But I’m sure you don’t believe it or this graph either because you love to hate the Finnish system because it’s a living proof that there’s something wrong with your world view (red is the USA, blue Finland and black world).
http://www.stat.fi/tup/tietotrendit/tt_01_05_jalava_003.gif
When will Finland finally surpass the USA then? In about 20-30 years if the long-term trend continues and no new disasters happen, but if Tim is right it can happen sooner.
Comment by tsuhna — Wed, Apr 11th, 2007 @ 7:23 pm
Oh, it only gets better. You people!!! (and you claim a great education system???)
“Strangely enough, Finland has grown faster than the USA during most periods (in 1930s and after the WWII in particular). But catching up has been slow and it’s been interrupted by a couple of pretty disastrous periods (in 1920, 1940s and 1990s) ”
C’mon folks, gotta love em for their blind faith and follow the leader attitude.
Psst. (It hasn’t all been smooth sailing for the yanks either these past couple of hundred years. They had a few difficult periods too. Just thought I’d let you know)
Hey, the sun’s shining, is it summer already? I only just woke up
Comment by Punter — Wed, Apr 11th, 2007 @ 7:30 pm
Kristian:
“No, I think you misunderstood my point. To have capital here as a transient investment is different from having capital here ‘permanently’â€â€that is, owned by a resident of Finland.
In the latter case, no matter where it’s investedâ€â€abroad or domesticallyâ€â€the profit will return here to Finland.”
Okay, fair enough. But then it is rather misleading to talk about atracting capital because that isn’t really what you want but rather to be a provider of capital to rest of the world.
Icreasing national savings would work towards that goal. But does cutting taxes really increase national savings? At least all else equal it will decrease government savings. It would then need to increase private savings by more than that. Is there any evidence for something like that?
Comment by Ossi — Wed, Apr 11th, 2007 @ 7:36 pm
Ah, exactly the kind of reaction I’m used to from you guys. You’ve so brainwashed that when you’re encountered with a fact that contradicts your ideology you go tilulilulii.
Now, please explain what is wrong with the international GDP growth figures. No, just kidding, of course I don’t expect you to do it. That would be too much demanded from the people like you.
Comment by tsuhna — Wed, Apr 11th, 2007 @ 7:40 pm
tsuhna: “Beijing to diversify investment strategies - By Richard McGregor in Beijing
Published: January 21 2007 19:35
China is to diversify the use of its swelling foreign exchange reserves, a policy change that is likely to mean a rise in investment in overseas securities and more purchasing of foreign technology and raw materials.”
Wen Jiabao, the premier, said after a top-level meeting on finance reform at the weekend that Beijing should improve the management of its foreign reserves and explore ways to diversify their use.”
Comment by tim73 — Wed, Apr 11th, 2007 @ 7:49 pm
Can’t get past your constant ref to China this and that but wait, even the great communist state has changed it’s mind as is following the evil ways of the west. Go figure.
Comment by Punter — Wed, Apr 11th, 2007 @ 7:53 pm
Hmmm, one example how fucked up the economic situation is in the US:
“Foreclosure (=meaning you lost your home to the bank) sales are now 15 percent of all home sales in California. 5,316 homes were lost to foreclosure sales in March in California, according to figures compiled by Foreclosure Radar, a Discovery Bay-based foreclosure listings and software company.
The homes sold at auction last month represented a 27 percent increase from February and a 264 percent increase in the last six months, the company says. Of the $2 billion worth of properties sold in March, 4,796 went back to the lender after receiving no bids, representing $1.82 billion, it says.”
So 264 percent increase within six months and about 90 percent of those homes for (forced) sale RECEIVING NO BIDS WHATSOEVER at the auction!
We did have similar housing bubble bursting situation in the early 90’s but it was never that bad and this is just the beginning of
really big market correction…
Comment by tim73 — Wed, Apr 11th, 2007 @ 8:01 pm
tim, your life must hurt. Stop banging your head against a fall waiting for the sky to fall, take a tablet and have an early night. Good night.
Comment by Punter — Wed, Apr 11th, 2007 @ 8:05 pm
Ossi: “At least all else equal it will decrease government savings.”
That’s a fair point. It’s a matter of widening the tax base instead of digging deeper. I’m pretty sure we are notoriously narrow at this point. Lots of big corps, few small entrepreneurs who operate in the global market. Entrepreneurs who make their tax homes in Estonia don’t count.
Consider that people who’ve achieved financial success are adept at achieving more. I’ve already mentioned on this blog and elsewhere that half my own family left Finland in the 70’s and 80’s; they couldn’t move back even if they wanted…..at least not without losing substantial portions of income and privacy (due to verotietojen julkistaminen). It would be impossible for them to operate here for tax reasons. Besides, who wants to recieve an income-based speeding ticket for 80,000€ or something like that?
All sounds fair to the faux-egalitarians out there, but in the big picture Finland loses….big. Finland needs to start spreading its tax burden across a larger income span if it wants to decrease tax rates for the lower strata while simultaneously increasing tax revenue.
I think the Center and National parties both campaigned on the entrepreneurial theme, and the Swedes seem to have moved in that direction, so it’s not just my idea. I’m just illustrating it here.
Comment by Kristian — Wed, Apr 11th, 2007 @ 8:10 pm
Oh, and if anyone wants to argue that Finland doesn’t have ultra-high taxes, I’ll send you the Finnish tax bill for 10,000€ when I buy a used car.
That’s the kind of nonsense I want to see eliminated.
Comment by Kristian — Wed, Apr 11th, 2007 @ 8:13 pm
Tim73
The world has changed. Loosing your shirt is a god given right in the USA.
Comment by winter “Against stupidity, the gods themselves are helpless.†— Wed, Apr 11th, 2007 @ 8:30 pm
In fact Finland’s overall tax rate is just a couple of percentage points above the EU15 average. Perhaps that’s ultra high. And there are more over two years old firms than about anywhere else in the first world. Start-ups are relatively few but exceptionally fast expanding. Policywise Finland is one of the entrepreneur friendliest countries - not according to the corrupted domestic brainwashers but several international studies.
Comment by tsuhna — Wed, Apr 11th, 2007 @ 8:41 pm
“tim, your life must hurt. Stop banging your head against a fall waiting for the sky to fall, take a tablet and have an early night. Good night.”
Actually, no. Just warning of incoming economic superstorm. Economic barometers are so low at the moment that I feel like those meteorologist before Katrina, watching that fucking satellite data. You see the chart and do the math and WOW.
Comment by tim73 — Wed, Apr 11th, 2007 @ 9:55 pm
…and that WOW is bad. Eventually and hopefully we make it but this one is big one.
Comment by tim73 — Wed, Apr 11th, 2007 @ 9:59 pm
“The world has changed. Loosing your shirt is a god given right in the USA.”
I wonder Japanese and Chinese are going to say that…
Comment by tim73 — Wed, Apr 11th, 2007 @ 11:07 pm
Besides, who wants to recieve an income-based speeding ticket for 80,000€
That means around a million’s yearly salary. Pretty well for a guy who keeps track of whether a kebab costs 3 or 5 euros.
Comment by Anonymous — Wed, Apr 11th, 2007 @ 11:34 pm
@58 I can assure you that’s NOT my salary
Comment by Kristian — Thu, Apr 12th, 2007 @ 12:37 am
tsuhna: “And there are more over two years old firms than about anywhere else in the first world.”
Sure. Farms, forestry and countless freelancers who build kesämökit in the summertime and drink olut during the winter while collecting päiväraha
tsuhna: “Start-ups are relatively few”
That’s ’cause they’re all in Estonia.
You’re getting my autovero bill. Then you can convince us that Finland’s taxes are “just a couple of percentage points above the EU15 average.”
Being facetious of course. I would NEVER pay autovero in Finland. I never have and never will.
Comment by Kristian — Thu, Apr 12th, 2007 @ 12:47 am
By the way, about that 10,000€ autovero bill… It means that an entrepreneur in Finland needs to go an additional 10K into Debt to fund his startup business.
Therefore:
Finns start their businesses from a Debt position.
Entrepreneurs from other countries start their businesses from an Equity position.
I’ll take the second one.
Comment by Kristian — Thu, Apr 12th, 2007 @ 12:54 am
61 — Since you seem to be obsessed with autovero, answer me this: is it true that the costs of road construction (per sq m) in Finland are severalfold those in countries with more temperate climates? I make no representation that they are, but I recall someone telling me so a few years back. Supposedly, this has something to do with a need to build deeper foundations for the asphalt because of the harsh weather.
This, together with high maintenance costs (again, due to the extra wear of winter tires and the need for snow clearing), may well explain why the tax on cars is relatively high. (Petrol prices are certainly no higher in Finland than in, say, the UK.)
Comment by P — Thu, Apr 12th, 2007 @ 1:10 am
@62 No, half the roads upward of Ring 3 are gravel. Some are dirt.
The historical reason for autovero is protectionism—keeping capital from flowing out of Finland. That’s the price for having a narrowly-based economy. You always have to prevent every penni from escaping.
In Finland, protectionism and cartels are utilized wherever Finns don’t have a choice but to comply.
For example, with alcohol, they know exactly how high to price it before Finns start going to Estonia. They probably even figure-in the ferry ticket. For the consumer, it’s never a true market price.
Autovero and alkoholi are both just government forms of protectionism.
Comment by Kristian — Thu, Apr 12th, 2007 @ 1:32 am
“It seems like America really needs some type of forced savings/investment scheme for people. It would help the national situation.”
Well there are some that want that as a replacement to social security, which is the current forced-saving program, but the Democrats are fully against it and that is a shame.
I am lucky to be in the half that is saving well. It took a couple of years to clean up my debt, but it is amazing how much easier life gets once you have that out of the way.
One issue about the foreclosure rates, they are approach 1997 levels. Gee who was President then? Funny, I don’t remember any real crisis back then.
What, no mention of the growing Finnish debt problem? I thought Finns were so disciplined. Turns out that they avoided credit problems because credit was so hard to get!
Comment by Fred Fry — Thu, Apr 12th, 2007 @ 3:07 am
Farms, forestry and countless freelancers who build kesämökit in the summertime and drink olut during the winter while collecting päiväraha
Another clueless piece of speculation. The number of farms is pretty much the same in all relative countries and the Finnish system hardly makes it possible to live as a freelancer the way you describe: when did those freelancers start getting päiväraha, unemployment insurance money?
Once again, there are relatively few start-ups in Finland, but they are expanding faster and living longer than in most other relative countries (and not only according to local brainwashers, mind you).
“Start-ups are relatively fewâ€Â
That’s ’cause they’re all in Estonia.
Are they really all in Estonia? What about those that are not? Are they too in Estonia? You’re not even trying to convince anybody anymore, I guess. Besides, it’s just fine if somebody wants to do business in Estonia or other countries with a relatively low productiveness, good for them but for us too. That’s called globalization and that again benefits Finland - and Estonia - without a question. (And that’s not an opinion force fed down our throats by local fuhrers but something anybody can check from the business register.)
You’re getting my autovero bill. Then you can convince us that Finland’s taxes are “just a couple of percentage points above the EU15 average.
I don’t have to do any convincing to anybody who has even the slightest idea how these things are calculated: no room for cooking up the statistics, contrary to what you seem to think. You see, the GDP is consumption + investment + (government spending) + (exports − imports). Now you just have to calculate how big part the collected taxes - that figure you’ll get from the budget - are of the total. Even a German school kid could do that, I suppose, but fortunately he doesn’t have to because others have done it already.
Next, I’m sure, you’ll say that you knew all that already, but it’s not true because of autovero.
(which, by the way, is indeed way too high, and they don’t even tell when they’re going to lower it which, in turn, makes buying a new car now a risky business). Anyway, direct car taxes make pretty marginal part of the total taxes … and they most certainly don’t stop anybody from setting up a firm in Finland.
Comment by Anonymous — Thu, Apr 12th, 2007 @ 9:04 am
“Once again, there are relatively few start-ups in Finland, but they are expanding faster and living longer than in most ”
That’s because those startups who ARE left to settle here (e.g.—doctors, consultants, professional services etc.) have low capital outlays and near 100% success rates in any case. But for businesses that actually RISK capital to gain profit from the global environment, it makes little sense to use Finland as a tax home—at least not for the small ones. That’s because their owners will lose over 50% of any POTENTIAL winnings to the state in taxes. Not worth the risk.
But, as I stated above, that’s what the new political leadership is poised to address. We’ll see.
“it’s just fine if somebody wants to do business in Estonia or other countries with a relatively low productiveness, good for them but for us too.”
To be sure, it’s good for Estonia but not good for Finland. That’s because Finland loses both jobs and tax revenue. Exactly my point for posting articles like above.
“You’re not even trying to convince anybody anymore”
“Anybody” meaning you in particular. Actually, my goal isn’t to convince anyone. Most people already know about over-taxation and overpricing in Finland. For those who don’t, I merely encourage them to see for themselves. What harm can it do?
I like to present people with ways to analyze how it all affects them. But in the end, people are smart enough to know what’s best for themselves. Any type of “propaganda” as you call it, won’t influence them either way.
“autovero. (which, by the way, is indeed way too high”
Speaking of which, it’s really a shame that it ever existed at all. Imagine if ‘P’ in #62 were to move from the UK to Finland with a car he’s owned for several years—all paid-off—and suddenly he’d be handed an autovero bill for 5K,7K or 10K, depending on the value Finland determines. I’ve read in some of the other forums that this actually happens, and it causes people to return to their country of origin.
I’m really hoping for positive changes in these areas. If they happen, I’ll be the first to taut them
Comment by Kristian — Thu, Apr 12th, 2007 @ 12:14 pm
Kristian, you apparently don’t know much about the Finnish start-ups, Finnish risk capital markets or the firms in general either. The way things really are is pretty much opposite to what you’re saying.
And how could it be otherwise when the Finnish start-ups indeed expand faster than about anywhere else? Perhaps you believe that it means that these lone doctors and the like are just getting fatter.
And is it really your idea that it’s particularly profitable in Finland to become that kind of a small-time “freelancer” you describe. Could it be that you’re confusing Finland with something like Italy? Anyway, please, don’t start a consulting firm of your own telling people what kind of entrepreneurs they should become in this country.
Let me say one more thing: Don’t you think it’s a bit too tall an order to try to prove that one of the best performing economies in the world is in reality this strange museum-like creature (”I’ve been waiting all my that Finland’s economy would modernize” or what was it you wrote). I mean, even for somebody who knew what he was talking about proving something like that would be a bit too tough. It’s like trying to prove that Ferraris are in fact very slow cars.
And getting together a reasonable argument - you know, with facts, logic and all that crap - wouldn’t hurt either. I mean, of course you then would have to drop most of your wild speculations, but then again there would be a chance of getting people to believe you. Like with the car taxes, perhaps.
But in that you are right that many Finns indeed still think that Finland would be particularly expensive and tax-burdened country, when in reality both taxes and the prices (relative to salaries) in particular are quite average - have you heard that Finland’s total tax rate is just a couple of percentage points over the EU15 average? Perhaps you can help with getting rid of that myth with your clearly misinformed writings.
Comment by tsuhna — Thu, Apr 12th, 2007 @ 1:38 pm
That was a bit too harsh, come to think of it. I got frustrated because you don’t offer any counter-evidence. Anyway, my apologies.
Comment by tsuhna — Thu, Apr 12th, 2007 @ 1:47 pm
tsuhna:
It’s like trying to prove that Ferraris are in fact very slow cars.
It’s a Ponzi scheme! You need to keep filling it up with EXPENSIVE and HEAVILY TAXED fuel to keep it going!!! It’s all a HOAX, really!!!!
Comment by Anonymous — Thu, Apr 12th, 2007 @ 7:37 pm
Kristian:
“Oh, and if anyone wants to argue that Finland doesn’t have ultra-high taxes, I’ll send you the Finnish tax bill for 10,000€ when I buy a used car.”
Once you FINALLY do this then - sure - send the bill around. But stop talking about it, do something. You tire old record.
Comment by Thomas — Fri, Apr 13th, 2007 @ 12:40 am
Kristian:
“Besides, who wants to recieve an income-based speeding ticket for 80,000€ or something like that?”
So now you propose, not only swiss taxation, but poll-taxes as well. Well, no surprise in your case. Why not suggest ALL-OVER poll taxes (to cover e.g. potential ambulance destroying urges) while you’re at it? Would make it so much cheaper for millionaires to destroy ambulances.
Comment by Thomas — Fri, Apr 13th, 2007 @ 12:53 am
tsuhna:
“Perhaps you can help with getting rid of that myth with your clearly misinformed writings.”
Do you ACTUALLY believe Kristian is going to answer any intellectually non-substandard comment, in any intellectual fashion? DREAM ON.
Comment by Thomas — Fri, Apr 13th, 2007 @ 1:07 am
@68 Well, you don’t have to believe me. This stuff’s reported frequently. Like I already mentioned, I’m just adding my own experiences and some analysis. As far as the research goes, I don’t like to provide data redundantly because I assume everyone reads the same news, etc., as I do.
For example:
http://www.hs.fi/english/article/Services+in+Finland+among+most+expensive+in+Europe/1135222876988
And (this one is a few years old, but I doubt much has changed):
http://www.hs.fi/english/article/Food+still+expensive+in+Finland+by+European+standards/1076153030941
Statistics Norway seems to agree that Finland is expensive: Top 5. As we know, communications and energy are reasonable in Finland, but not much else—again, according to Statistics Norway:
http://www.ssb.no/pppvare_en/fig-2006-07-27-01-en.html
http://www.ssb.no/pppvare_en/main.html
One about housing:
http://www.hs.fi/english/article/Shortage+of+land+pushes+housing+costs+to+among+highest+in+Europe/1135224508830
Then we see that Finland is either 2nd or 5th highest taxed country as percentage of GDP, depending on whom you believe.
eurostat says 5th highest:
http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_YEAR_2007/PGE_CAT_PREREL_YEAR_2007_MONTH_03/2-20032007-EN-BP.PDF
Your own link states that Finland is 2nd highest:
http://www.forfas.ie/ncc/reports/ncc_annual_05/ch04/ch04_01.html
And then there’s VAT. Finland unquestionably has THE HIGHEST combined rate (regular: 22%, food:17% , medicine: 8%)
http://en.wikipedia.org/wiki/VAT#EU_countries
Edit: Denmark is higher. Sorry. But no surprise there I suppose.
And as for Autovero, you can do your own comparison…
In Finland:
http://www.autopiste.net/autot.php
In Germany:
http://www.autoscout24.de/
And here’s what the ripoff costs you (my analysis):
http://www.finlandforthought.net/2007/03/16/autovero-the-ultimate-ripoff/
And then there’s Alko ripoff. I don’t think we need to question that booze in Finland/Nordics is most expensive. So here’s what it costs you, (my analysis, conservatively estimated by the way):
http://www.finlandforthought.net/2007/04/02/alko-alkoholi-and-the-fleecing-of-finland/
Concerning income taxes, you might be right in stating that “just a couple of percentage points over the EU15 average.” But add all the other stuff above and Finland is clearly not lowest for overall taxation. In fact, it’s probably the VERY HIGHEST. And I don’t think we’ll convince anyone from the 1st World that net salaries in Finland are somehow high enough to cover the excess costs of taxes and high consumer prices as demonstrated above. It doesn’t fit.
And by the way, I don’t buy-into this notion that we NEED to attract immigrants, high quality or otherwise. Whereas I’m not against immigration, if done carefully, I don’t believe it should be a premise for keeping the welfare state afloat. That’s why I always try to propose alternatives, as per my initial post.
One thing you stated correctly is that the business environment is good—specifically regarding government administration, in my opinion. I agree with that entirely. But to live here while operating a small- to medium-sized business is not financially favorable at present. As someone who invests and risks capital to earn a living, I can tell you that’s true. Apparently, Center and Kokoomus agree with me or they wouldn’t have emphasized entrepreneurism during the election campaign.
I hope this answers your questions regarding “counter-evidence.” As you can see, I’m really just working with ideas that are being reported in the news.
So, why do we have to hide all this? Why not just say Finland is presently more expensive, but it’s taking steps to adjust its economy to make it more livable for everyone? After all, it’s honest…..we just hope actually happens…..soon! If it does, considering all its otherwise wonderful aspects, Finland will eventually be the PERFECT COUNTRY
Comment by Kristian — Fri, Apr 13th, 2007 @ 9:59 am
Thomas—get your typing fingers ready, so you can obfuscate all that’s written above. You wouldn’t want anyone to actually think about it, would you?
Comment by Kristian — Fri, Apr 13th, 2007 @ 10:12 am
Kristian, You actually took the time to do some researching! Unfortunately, the results don’t count for much. Finland has, as I’ve said several times, pretty average taxes and prices compared to the EU15. The prices are average - or actually well below the average - even when compared to the whole EU if the salaries are taken into account. Nothing in the links above contradicts this fact.
Now, it’s possible that you don’t understand what’s the difference between comparing Finland to the whole EU or just the EU15. Or perhaps you do understand but have decided to ignore it. In that case there are in my opinion two possibilities: You honestly think that Finland should lower its productivity (salaries in other words) in order to compete with the new member states. Or you understand how foolish that would be and still advocate lowering the productivity, in which case what you write is pure propaganda aiming at some mysterious goal.
Nevertheless, there are in my opinion certain things to be learned from the texts you linked to. Within the service sector there is at least one branch which could be less expensive, more productive in other words. Perhaps the 23 percent higher costs in restaurants and hotels should be lowered by tax cuts focusing on services. In all likelihood that would create new jobs and thus more tax revenue, paying for itself at least partly. That’s what the next government will probably do - unless they decide to focus on the VAT.
Housing is indeed expensive in the Helsinki area and other growth regions as the article says. The mass migration to those regions during the past decade or so is something truly exceptional within the EU - and even in Finland’s history. But that alone doesn’t explain the high prices as the article explains. Unfortunately, for you, the reason given is not high taxes but too low taxes. Besides, what is often forgotten, an average Finnish household has about 20% of it’s total housing investments invested in free-time residences. I wonder how much the Belgians have. Anyway, more taxes for the landowners, right?
As for taxes: “my own link” doesn’t say that Finland has the second highest taxes. The Irish report doesn’t include every country. Focus, man. The correct ranking was fifth in 2004. My guess is that Finland has gone down one or two places since that because of the tax cuts.
The VAT is not “unquestionably THE HIGHEST”. Either you don’t read your own links or you ignore facts on purpose.
As for alcohol and car taxes, as far as I can see I agree with you.
And we do need “high quality immigrants” unless we’re prepared to accept a much slower growth than so far - or highly reduced pensions. That’s an objective fact which is actually quite easily calculated, but I won’t go into that here.
AS for small-to-medium-sized companies, well, there are certain thresholds you have to cross. If you’ve succeeded then it’s very profitable. Some of the thresholds are a bit higher in Finland but some again are lower, depending very much on what your business idea is.
Writing: “But add all the other stuff above and Finland is clearly not lowest for overall taxation.In fact, it’s probably the VERY HIGHEST.” means that you still don’t understand how the overall tax rate is calculated. Finland’s all taxes and comparable fees (like public pension premiums) put together are about 43% of the GDP which is a couple of percentage points over the EU15 average - have you ever heard this one before? (And naturally those who have lower taxes have to pay privately more somewhere else, but for some very strange reason this is something that should be mentioned only at the risk of becoming the laughing-stock of you “reasonable guys”).
And if you don’t mind me saying, your trust in the results of the parliamentary election and their ability to reform the country is quite moving. Unfortunately for you, very little will change, mark my words. Then again, I personally welcome that little shift we’re going to see towards more liberal economical policies.
Comment by tsuhna — Fri, Apr 13th, 2007 @ 1:57 pm
Kristian:
“Thomasâ€â€get your typing fingers ready, so you can obfuscate all that’s written above. You wouldn’t want anyone to actually think about it, would you?”
I would like for you to THINK. But, clearly you are not so eager ;-).
“As far as the research goes, I don’t like to provide data redundantly because I assume everyone reads the same news, etc., as I do.”
How convenient. The lazy libertarian. Should be included among those flame warriors.
Now, let’s see.
Housing. Are you claiming that high prices in terms of housing is somehow explainable in terms of taxes? HA HA. Isn’t the housing market one of the markets most similar to the “libertarian ideals”, e.g. free competition etc.?
Autovero. Can’t be bothered to flog this dead horse once more.
Taxes. Yes, taxes are “high” in Finland. No doubt. Taxes are high in Norway and Sweden too. And guess what, these are the three least indebted industrialised countries in the world. Why? If you don’t get it, then - please - don’t cover economics anymore.
Services. 30% higher than the EU average. Yet you have repeatedly talked about prices being the DOUBLE, as compared to Germany. Lies, but that’s no news in your case. Germany is certainly not among the cheapest, when it comes to services. Btw. your paradise on earth - Switzerland - is more expensive.
VAT. I’m no proponent of VATs. You SHOULD be, since you are so libertarian. According to the “libertarian agenda” (or the agenda of libertarian economists at least), VAT is the least “intrusive” taxation mechanism (based on - as usual - blind application of theoretical neo-classical economics, to the real world, without considering the underlying assumptions). So be happy that general VAT is high. That’s more fair according to libertarians. But, given your recent tendencies towards poll taxes, I realise you find that VATs are too socialistic.
Food. According to one of the links: “The prices of fish, milk, cheese, and eggs in Finland are closest to the EU average. Vegetables, on the other hand, are clearly more expensive.” Now could there be a natural explanation for this Kristian? Maybe you could THINK for a while, before you claim that TAXES are the reason for why VEGETABLES, unlike certain other products (produced in Finland) are more expensive than in e.g. Germany? But I’m not holding my breath.
Anything else. No, these were your - as usual - lame points.
Btw. cigarettes cost as much in - your second heaven on earth besides divine Switzerland - Germany as in Finland. Beer in a pub in Rome or Torino is as expensive (if not more expensive) as in Finland. In Germany prices are slightly lower, especially if you like “räkälä’s”, as you seem to do. Restaurant’s in Germany or Italy, don’t seem to be much cheaper than in Finland. These are personal observations I’ve made on recent trips.
But your constant claims of finnish prices being the double of germanian ones, that’s utter crap.
Comment by Thomas — Fri, Apr 13th, 2007 @ 10:50 pm
Yeah, well, the taxation is somewhat higher than the EU average and the prices, too, Finland being at the end of the European logistical chain and everything. Add to this salaries which on average are nothing to write home about and you’ll see how all that kind of adds up…
Comment by AnonyMeaCulpa — Sat, Apr 14th, 2007 @ 12:10 pm
AnonyMeaCulpa:
“Add to this salaries which on average are nothing to write home about and you’ll see how all that kind of adds up…”
The low salaries in Finland, they are the fault of flower-hatted aunts, socialists, greens, whatever. And they are especially caused by TAXES. Greedy company owners are NOT - like NEVER - to be blamed.
Did I get the libertarian agenda right?
Comment by Thomas — Sat, Apr 14th, 2007 @ 4:44 pm
In Finland
taxes are high
prices are high
pay is low
tsuhna,
you cant say “low” or “average” tax or price it is not true. I live in Finland for now and I know this. Who are you kidding?
Comment by seeker of truth — Sat, Apr 14th, 2007 @ 5:45 pm
I like Finland and Finns. But they dont see real conditions.
Comment by seeker of truth — Sat, Apr 14th, 2007 @ 5:48 pm
you cant say “low†or “average†tax or price it is not true. I live in Finland for now and I know this. Who are you kidding?
It’s not a question of an opinion but what I wrote are facts according to international statistics. If you want to try to refute the OECD or EU statistics, go ahead. Then come back and tell me who’s kidding whom.
And folks, let’s not forget that Finland’s taxes are just a couple of percentage points above the EU15 average. The average prices in Finland are, surprisingly enough, quite low when compared to salaries.
Comment by tsuhna — Sat, Apr 14th, 2007 @ 6:44 pm
seeker of truth:
“Who are you kidding?”
Who are you comparing us with?
Comment by Thomas — Sat, Apr 14th, 2007 @ 7:56 pm
If you look at average prices of homes in Finland, they seem quite reasonable. Then again, that has Äkäslompolo and Utsjoki-Kevo factored in. If you look at where people are actually buying, i.e. the Helsinki area, it is quite different.
Comment by Freeridin' Franklin — Sun, Apr 15th, 2007 @ 2:45 am
MTV3 News just now -
The purchasing power of the Finns markedly below the EU average according to the latest data: http://www.mtv3.fi/uutiset/kotimaa.shtml/arkistot/kotimaa/2007/04/519637
> The average prices in Finland are, surprisingly enough, quite low
> when compared to salaries.
Bullshit.
Comment by AnonyMeaculpa — Sun, Apr 15th, 2007 @ 9:36 pm
Bullshit.
Hell, they didn’t even make purchasing power corrections.
By the way, pretty hilarious that the comparison included “kuusi keskeistä EU maata”. Now if somebody asks which are the six most important EU countries we know that the answer is Ireland, UK, Germany Spain, Belgium, and Finland.
And who did the comparison anyway? Veronmaksajien keskusliitto?
If you don’t understand something that doesn’t make it bullshit, as the old Indian wisdom goes.
Comment by Anonymous — Mon, Apr 16th, 2007 @ 8:53 am
I believe the study.
Whereas some items in Finland are comparably priced, many are not. It’s common for Finnish retailers set their prices to compete with mail order. The retailer can take advantage of the customer for 20% or more.
Plus, with 22% VAT and 17% VAT on food, I don’t think it’s hard to prove that Finns pay the second-highest combined VAT when considering normal purchasing patterns.
The study also states that the German working class has 1.5-times the purchasing power as the Finnish worker. To me, “working class” implies a certain level of income taxation. Generally, the working class gets a better deal in Germany—lower income taxation and much lower consumer prices.
It’s obvious to me. I have a home in Germany, so I’m very familiar with prices—especially building products!
Did I mention that I saved about 30% overall by bringing a big truckload of wood and other materials to Finland for building my Kesämökki?
Comment by Kristian — Mon, Apr 16th, 2007 @ 12:25 pm
Kristian:
“I believe the study.”
Sure you do. Like any study, that “proves” your stubborn fantasies.
The page behind the link (from mtv3) that was presented, didn’t give much confidence in the data. And Jaana Kurjenoja has been known to make mistakes. I think she had to revise one study not too long ago. Furthermore, there was a very strange statement on the page. It said, that the English superiority, was due to the weak Pound, and further mentioned that salaries and prices were transformed into Euros. Whatever this means is beyond me, and doesn’t increase my confidence in this “study”. Could be that it is badly presented, but somehow I don’t really trust this “veronmaksajat”.
But I know that in England, you pay way more for e.g. childcare than in Finland.
“Did I mention that I saved about 30% overall by bringing a big truckload of wood and other materials to Finland for building my Kesämökki?”
Yes you did. Like most other of your other opinions, which you repeat rather often. Like a broken record.
Comment by Thomas — Mon, Apr 16th, 2007 @ 10:14 pm
Oh, definitely Thomas. What luck, then, that we true upstanding Finns still have a bunch of Ugri gung-ho armchair experten-propagandists like your good self amongst us, always ready to vigilantly denounce anything deviating from our precious läskidemari-welfare state weltanschauung, isn’t it?
Yksi suomalainen vastaa kymmentä toisinajattelijaa, perRRRkele! Ein volk, ein Reich, ein Sosiaalitantta!!!
Comment by AnonyMeaCulpa — Tue, Apr 17th, 2007 @ 10:29 am
Come on folks, the study is obviously a spin. Not a particularly good one at that, though. It doesn’t even mention a “respectful organization” it was done by. But perhaps it still serves its purpose by making the stupid portion of the population to accept any tax cuts without hesitation: “Oh, how poor the Soviet economy has made us, the salaries are low and prices high, fortunately the new government will correct the situation with tax cuts, soon we’ll all be rich”.
Let’s hope that this was a lone incident, that spinning doesn’t become a part of our politics … then again, who am I kidding?
(And, yeah, “the high purchasing power of Britain may be due to the low exchange rate of the pound”. Go figure, Einstein.)
Comment by tsuhna — Tue, Apr 17th, 2007 @ 11:11 am
And I’m all for the tax cuts, by the way. Let’s drop the total tax rate to where it traditionally belongs, about the EU15 average.
Comment by tsuhna — Tue, Apr 17th, 2007 @ 11:29 am
Thank you, friends, for your sharing your ideas
Comment by bingo — Tue, May 27th, 2008 @ 8:18 pm