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Finland for Thought » 2007 » November | Politics, current events, culture - In Finland & the United States | Blog of an American living in Finland

Finland for Thought
             Politics, current events, culture - In Finland & United States

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29.11.2007

Requests for US photographer to be investigated by Finnish police over exhibit

Tags: Everything — Author: @ 7:38 pm

Sally Mann couldn’t have asked for a better promotion of her exhibit than this – And fortunately for her, there’s no way the Finnish authorities would want to embarrass themselves on the international stage by launching a serious investigation and prosecuting her… (although I reckon I’d get prosecuted if the authorities found some of her photos on my computer)

A request for a police investigation has been made to the Helsinki Police Department over pictures taken by the US photographer Sally Mann (born in 1951). At present an exhibition showing Mann’s work is on display in Helsinki’s Tennis Palace Art Museum.

[...]According to the online news by the Finnish tabloid Iltalehti, seven visitors to the exhibition have asked the police to investigate whether or not Sally Mann’s pictures are an offence against human dignity.

[...]Mann’s images of naked children and dead bodies have caused discomfort on previous occasions, for instance among extreme conservative Christians in the United States. The controversy surrounding some of her work has done nothing to hamper her career: Sally Mann’s powerful images continue to be shown in and collected by many major U.S. art galleries and museums.

[...]Time magazine named Sally Mann its “Photographer of the Year” for 2001, and she has been the subject of a 2006 film documentary entitled What Remains.

Is it silly to be proud of your country?

Tags: Everything — Author: @ 2:47 pm

I find it quite silly when I heard people exclaim, “I’m proud to be an American!” or “I’m proud to be Finnish!” You haven’t done anything special, Jebus just randomly stuck you in the womb of some woman living between particular lines that were hand-drawn by some politicians and army generals after centuries of bloodbaths and wars.

Sure, Finns and Americans have a lot to be proud about. Take Finland for example – Finns are great athletes, Finns kicked Russian ass in wars, Finns survived in a cold climate, Finns make the best mobile phones in the world, etc..

Well how about the people of Malawi? The Malawians have the worst GDP per capita in the world, they have a life expectancy of 36.5 years, child mortality is 103/1,000, 14.2% of the population has HIV/AIDS, there’s an entire Wikipedia entry dedicated to “the Malawian food crisis“…not much to be proud of, eh?

So I guess if the Finns and Americans have good reasons to be proud, the Malawians have good reasons *not* to be proud. They should exclaim, “I’m NOT proud to be Malawian!” …Or maybe being proud to be from a particular country is just, silly?

YLE wants to use illegal methods to track down non-payers

Tags: Everything — Author: @ 2:04 pm

People often argue that the state owned and operated public broadcaster YLE is actually autonomous from the state. But this is obviously not the case if its director, Mikael Jungner, has the power to subpoena citizen’s private data from individual companies

YLE’s Director General Mikael Jungner says the public broadcaster might soon start tracking down unpaid tv licences through commercial channel customer registers.

Jungner says that if licence inspectors were given access to lists of pay channel customers, they could easily find the names of licence-dodgers. Around ten percent of Finland’s television viewing audience does not have a licence. Jungner says this is a considerable sum of money.

Fortunately it may be illegal for big brother to pry into your personal life like this…

Communications Minister Suvi Lindén says that information about customers paying for additional television channels may be protected by privacy laws.

“My understanding is that the current privacy laws don’t allow this kind of use of customer data. I’m sure the matter will be investigated thoroughly, and then we can take another look at the problem,” she says.

53,000 households have canceled their TV license over the recent migration-to-digital debacle which has lead to a decrease in revenues for YLE, and cost-cutting measures such as removal of TV and radio stations. Instead of taking responsibility for themselves, YLE has launched a hard-hitting propaganda campaign, pitting neighbor against neighbor – very remnant of MPAA & RIAA’s attacks on filesharers. And if that doesn’t work, it looks like YLE will just trample even more on our right to privacy.

Finnish police officers guilty of unlawful conduct during protest

Tags: Everything — Author: @ 1:37 pm

From last year’s protests to the Asian and European Countries Summit in Helsinki…

The Finnish Ombudsman has found some police officers guilty of unlawful conduct during last year’s Smash ASEM protest demonstrations. Deputy Ombudsman Jukka Lindstedt reprimanded a police sergeant and a Helsinki police station for wrongful arrest. Those wrongfully held were also allegedly denied fair treatment.

[...]The Ombudsman found that the act of breaking up the demonstrations was lawful, but the large number of detentions and their extended length were problematic. The Deputy Ombudsman questioned whether it was necessary to deprive so many of their individual rights.

finnish_pigs_oink_oink.jpg

28.11.2007

My First Trip to the Public Dentist

Tags: Everything — Author: @ 1:03 pm

Continuing with this month’s “Beating a dead horse”-campaign here on Finland for Thought, I thought I’d share experiences from my first trip to the public dentist in Finland. As you probably know, Espoo city didn’t take appointments for check-ups until this year due to the severe lack of resources. And as you probably know, unlike the private dentist, they won’t take you in for a cleaning until you’ve had a check-up.

So my girlfriend and I go in for check-ups at our local healthcare center in Nöykkiö, we booked these appointments six months ago, it was the earliest appointments we could get. And what a surprise, my teeth need cleaning! So the earliest appointment I could get was two months from now.

But here was the non-sarcastic surprise – every time I visit the dentist I’m told I need my right wisdom teeth removed, I’ve been told this since I was a teenager. But this public dentist told me I don’t need them removed! Thanks Doc, you’re saving me pain and money! After 15 years of fucked up wisdom teeth, they’ve finally miraculously cured themselves on their own accord! …either that or the public dentist doesn’t want to pay for my operation – but I’m thinking it was an immaculate fixing brought down upon me from by the heavens from Jesus.

So I’ll be visiting the dentist again in January. Meanwhile my girlfriend was told she doesn’t need to come back for another FOUR YEARS! WOW!! We were always told you need to visit the dentist once a year, but the public dentist must have went to a different dentist school (in the UK?) or something. …or maybe it was another act of Jesus?!? Praise the Lord!!

I received my dentist bill in the mail yesterday. 23 euros ($34 US) just for a check-up. “Free” healthcare in the welfare state, eh? The last time I visited the private dentist was at ORAL in Helsinki, I was charged just 20 euros, but I had a coupon.

Oh, and on the way out the dentist recommended I use “Hedley & Wyche: The British Toothpaste”…

Åland, Scandinavia’s little offshore tax paradise?

Tags: Everything — Author:   @ 9:52 am

Åland 

 Picture of Åland. Picture, thanks to Wikipedia. Click to view Wikidedia article.

What does Åland have in common with Jersey, Guernsey, The Canary Islands, Mallorca + Menorca, Madeira, San Marino, Andorra, The Isle of Man, Gibraltar, and so on? Well, many of them are remote places, separated from the continent by water. Some of them are in the mountains. All of them are small places with a small population of people. Some of them are sovereign states while others are autonomous territories of another country. Many of them get a lot of tourists each year – some get more in the winter (ie The Canary Islands) and some get more in the summer (Åland). The Åland Islands get 1-2 million people going through there a year.

Åland is an island archipelago which has a lot of rocky island outcroppings located between Finland and Sweden in the Baltic Sea. The main island is large enough to give an impression that there is a lot of open land there. The outer archipelago is a different story, though. In Brändö, they say there are 500 people there, but 1000 islands. It is the photo-negative image of Finland with its plentiful lakes – Åland has plentiful islands. It has a bit warmer and sunnier climate. There are trees that grow there that don’t in Finland, like Taxus baccata (European Yew).

Statistically, Åland shows that it has wealth clearly above the Finnish average. If you are in Mariehamn, it does look neat and clean. There are some shipping businesses based there. Much of the Finnish potato chips come from there because the potatoes are bigger, due to the plentiful sunshine in the summer from Åland being too small to disrupt the weather patterns enough to cause rain and thunderclouds in the summer, unlike what happens over mainland Finland and Sweden.

If you visit the outer archipelago, it won’t appear very wealthy at all. In fact, it looks quite impoverished with run down buildings and things generally in bad or worn out condition. I lived there 2 summers in the outer archipelago in Brändö, and the people there work many different careers in order to make ends meet. People fish, hunt, farm what little land there is, have greenhouses, build, repair, work for the municipality, pick tomatoes, pack fish, farm fish, work in tourist cafes, rent cabins, and so on. The second summer I was there, Finland had joined the EU and, instead of making trade and movement of goods more free, it worsened there. Many of the goods were bought from Finland, and were charged with 17.5% or 22% VAT. They were charged 17.5% or 22% VAT again in Åland. Then the person buying the goods needed to apply separately for a refund for the VAT paid to Finland. This happens because Åland has the same status as The Canary Islands and The Channel Islands of being outside the VAT area of the EU.

What Åland doesn’t have in common with those other places is that it is not a tax paradise. Because of their geographical disadvantage, most or all of those other places have lower or no VAT and, in many cases, have other lower taxes in order to make it easier for people to live there. Many of those other places give special tax discounts or tax free status to businesses that are based there, but do business elsewhere, not locally. Some of them also have banking opportunities, and are known as “safe” places to keep your money. So instead of being Scandinavia’s tax, shopping, and banking paradise, it is an expensive tax hell. The only tax-free shopping is for alcoholic drinks and tobacco (addictive drugs) on the boats going to and from there. Åland has special status, along with the Canary and Channel Islands that it is outside the VAT area, but its government only chooses to use it to sell addictive drugs on ships.

Åland, if made into a Swiss or Liechtenstein style banking location and tax/shopping paradise, it would make a LOT of money and could possible help repatriate expatriated Finnish wealth where it can be used and invested in and near Finland, but it could also bring in new wealth. The whole Baltic area could and would use it. Russians especially like to keep their money safe from the teeter-tottering of politics, but Russia is not the only country in the neighbourhood that has teeter-tottering politics. But that is up to the Åland people and their government. They can do what they want, since they are autonomous and have their special VAT status. They can have a tax hell or a tax paradise.

26.11.2007

Educated Finns earn less with longer hospital queues

Tags: Everything — Author: @ 4:19 pm

Educated people in Finland are paid far less then their EU counterparts…

Finns with higher education were paid over 20 percent less on average than their counterparts in the EU, reports the trade union.

Chair of the union Matti Viljanen says Finland’s lower gross income, stiff progressive tax and high price levels lower purchasing power. He says Finns should become familiar with salary and tax policies.

But we’re taxed so high cause we got wonderful welfare services like healthcare, right??

Waiting periods for receiving hospital treatment have been growing longer. In many areas, the situation has worsened over the past year.

[...]In Pirkanmaa in west-central Finland, around 1,100 people have been waiting for care for over 6 months, in the capital city and Uusimaa region the figure is 2,300 – nearly 700 more people than a year ago. Hospital districts in the southwest and other central parts of the country also report longer queues.

25.11.2007

Olli and Tanja Saarela to divorce

Tags: Everything — Author: @ 11:50 am

Former Miss Finland and current MP, Tanja Vienonen Karpela Saarela, and film director/Matthew Perry-lookalike, Olli Saarela, are divorcing – Which is great news for me cause my salarakas is now single once again! If you soon see in the headlines, “Tanja Saarela seen holding hands with young, unknown American from Nokia…”, you’ll know who it is. ;-)

24.11.2007

Americans love their Drugs & Prisons

Tags: Uncategorized — Author:   @ 8:55 pm

coca.jpgI can’t believe hockey player Jere Karalahti is still in jail on drug charges. I’m not convinced that he’s guilty of anything, and it gets me thinking about drug policy in the Nordics.

What I don’t understand is that professional sports stars, like ones who compete in ice hockey, rugby, football, auto racing, boxing and even ski jumping, can have multiple concussions and other devastating head injuries; yet it’s so natural to think, “It’s OK because those injuries were suffered while playing sports. Carry on fearless warrior!” Nevermind that some of them will no longer be among the sharper pencils in the drawer…not that all of them were to begin with.

Whereas I don’t know anything specific about Jere’s case, when an average Pekka Jääkiekko wants to relax with his buddies and snuffle a few lines of white powder on a Saturday night, many of us are programmed to think, “Oh no, we can’t have THAT!” But sports head injuries are OK.

Of course, I’m being facetious by even remotely suggesting that the normal outcome of playing sports or using drugs results in permanent brain injuries. In either case, the chance is remote. Most sportsmen recover from their injuries, and the vast majority of recreational drug users never have problems in the first place. But why is there such a double standard?

We in Europe can learn from the follies of the United States, which has been using anti-drug propaganda for several decades now to justify its War on Drugs, a sustained effort to fund the prison industry. There are more people in US jails than in Russia and China combined. It’s a real human rights mess. That’s not to say we don’t have our own embarrassing practices here—albeit unrelated to prisons and drugs—but at least we’re not on the verge of needing to colonize the moon to secure more prison real estate.
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Most amazingly, American workers even prostitute themselves by offering bodily fluid samples for their corporate bosses to inspect. And the US sports industry is on the warpath with ridiculous testing regiments of its own for athletes. It’s such an embarrassing and unnecessary procedure for participants. The politically connected drug testing industry doesn’t seem to mind though.

Yet by all observations, these measures aren’t stopping anyone from doing illegal drugs. In fact, Americans love drugs more than ever! The passion spans all socio-economic strata, professions and age groups. It seems to abide well with the American work hard & play hard ethic. The sad part is that, whereas most people’s lives aren’t being harmed by the drugs themselves, they are instead impeded by the prison sentences, interrupted careers and other legal troubles associated with drug policies.

Now, none of this is meant to imply that drugs are wonderful. The above-mentioned powders have addiction rates and cause destructive illnesses just like alcohol; the chances of being afflicted are small but exist nonetheless. But let’s remember, there’s also a chance of suffering debilitating injuries while riding a bicycle—those little Styrofoam helmets might be concrete-resistant, but they’re not concrete-proof—or parachuting, hang gliding or cliff climbing for that matter. Life is full of risk choices.

The biggest danger that I see, aside from the legal troubles, is the possibility of ingesting a mixture containing something found in the cabinet under the kitchen sink. You just never know what some unscrupulous dealer might have used to dilute the product. Maybe he was short on baking flour, but too lazy to run to the store? Out comes the carpet cleanser. The chance of impurity is probably more harmful than the drug itself.

Given this pitfall, and the fact that keeping drugs illegal only raises profits and encourages more sales and usage (it’s probably the biggest business in America), why not follow the Swiss example of providing those with serious drug ‘desires’ a rationed assortment of whatever makes them happiest—after all, isn’t life about being happy? Surely it can’t only be about punishing each other for our differing preferences.

So to really seal our place in history as being part of the enlightened Nordics, let’s take the entire drug market away from greedy criminals and put it where it belongs: The government.

We can begin by opening a sister-monopoly to the famous Alko, Finland’s governmental alcohol pusher. The new enterprise can be named Narko; hence, together they’ll form the Alko-Narko Alliance. The new monopoly can have the same high prices, narrow selection and limited opening hours as its older sibling. Naturally, it will also have government workers who’ll occasionally strike for higher pay. Rest assured, we can even continue to enjoy the long cues before holidays.

And best yet: when the European Commission again censures Finland for its anti-competitive practices, we can defensively retort: “We need Narko to control drug addiction!” But this time, it might actually be an honest statement.

You said it Elvis!

Coffee or tea?

Tags: Everything — Author:   @ 9:17 am

Lately, Finland is starting to have a pretty good selection of coffees. When I first moved here, you could get Finnish style coffee and that was about it. If there were any “espresso” or “cappucino” type coffees, then they were from the Scanomat press-a-button, bzzzzzzzt, and “blat!”, something falls into your cup kinds of coffee, made from instant powder mixes. You still often see the Finnish preference for an automatic machine in many places, but chances are, the machine is making you a real cappucino, latte, or espresso. You can usually tell if is making real coffee from the taste and smell and if there is a bean reservoir on the top or a pipe that takes in real milk. Some machines use real coffee but use powdered milk, which is not a good compromise, in my opinion. In one cafe where I visited, there was a proper, expensive automatic espresso/cappucino machine, but they had put traditional Finnish roast coffee in it. It caused an immediate gag reaction in me, since I was expecting the taste of espresso. I have had a similar experience in Tallinn as well where they had used continental roast coffee in an expensive automatic espresso machine. That is a big no-no.

The traditional Finnish (Scandinavian) style coffee is very lightly roasted. It is prepared usually in a drip-type coffee maker, although there are more roughly ground types that can be made in with the grounds in the coffee pot when it is on top the stove. Finnish or Scandinavian coffee has quite a different taste from French coffee, which is very darkly roasted. Italian espresso coffee is dark roasted but not quite as dark as the French roast. The continental roast used in Germany is a medium roast. In the USA the American coffee is typically medium roast, and prepared quite weak. The Greek and Turkish finely ground style of coffee is also medium roasted. From my observation the finely ground coffees quickly loose their aroma. Lebanese coffee, which is also finely ground, can even have cardamom added to it, and has an interesting taste.

Espresso originally comes from Italy and has been drunk there for perhaps a hundred years. It is also drunk a lot in Cuba and parts of South America. This new way of preparing and selling different types of espresso drinks in cafes is quite a new culture, and has spread out from Seattle, where Starbucks had its beginnings.

The tea culture in Finland still has a lot of room for improvement. Cafes usually have a large selection of bagged teas that have different aromas added to them. Some people, however, prefer loose leaf tea. The bagged teas naturally taste a lot like the bag that they come in. Loose leaf tea tastes only like tea. There are also hundreds of types of tea, some of which you never see as bagged tea. Some teas don’t do very well as bagged teas, such as Sencha, which should look a bit like blades of grass. Also bagged teas are often quite powdered, and the small granules cause them to loose their aroma.

Among the caffeinated drinks you may find Yerba Mate nowadays. This comes from South America and is neither a tea or a coffee, but it is often prepared like a tea. It should be sucked through a filtering straw (bomba) from a gourd (mate) and made with about 80 degrees C water. The gourd is filled about halfway to two thirds full with Yerba Mate, and it is steeped 6-10 times before it tastes “washed”. South Americans and others claim it is quite healthy.

23.11.2007

New Hope for the Indebted – Bailiffs Stop Haunting After 15 Years

Tags: Everything — Author:   @ 3:57 am

There is always a question of why someone aspiring to starting a company in Finland is faced with “negativity”… the Finns – those that are friendly that is, will call a person crazy, and then relate a story of enterpreneurship, bank loans, devalvation, reposession, alcoholism and suicide. There was no such thing as a personal bankruptcy and debts being cancelled. The current law even passes the debts to the inheritors of a deceased person in some cases.

The parliament has passed a law that makes the maximum time of a debt to be in collection 15 years, in some cases 20. Currently, theres still debts from the 1960′s in collection. So, finally, there is an end date for a debt.

The measure is a drastic one according to EU standards, but the majority of these debts are from the 1990′s recession when enterpreneurs had guaranteed their debts personally, or gotten relatives and friends to co-sign for them. Beyond the idiocy of starting a business is co-signing. The Bank came after the co-signer. Theres several people who lost everything they had, or if they hadn’t anything any chance for a decent life by co-signing their life away. How can you deny co-signing for your dad’s business at 18? “Its just a formality?”. Well, nobody says “The Banks” were acting in a responsible manner, but very few of the bank managers were found responsible even the court cases dragged on for years. The time was very traumatic, and touched a lot of people, hence those warning speeches.

However the law won’t give a “get free from jail” card. There are catches. A court can give another 10 years if the person in debt has “acted inappropriately” as in hiding assets. Also underage kids are observed. Unless the collection is due to fines or reparations, the county magistrate must be notified. This is to prevent exploitation and also young people getting negative credit records. And once you die, you can rest in peace, as after that the estate is not liable for the debts as it is now.

Oh, why the “Finns are so negative” ? Maybe its just bogeyman stories. Lets look a bit at the statistics from the Statistics Centre (2006 figures), private people can’t go bankrupt, but the statistics on debt rearrangements mean some 4000 people get into trouble yearly. As for warning against starting a business the statistics on banktrupcies indicate that under 3000 enterprises are put in the process. Now the statistics on established and ceased companies would indicate that it is really only a 10% that will get into serious trouble. But as for the trauma of the bogeyman, do note the 1990′s there in the statistics.

By the end of 2007 there was 312 100 people in collection. The record year was 1994, with some 512 600 people. So, whats that, a bit more than the population of Espoo, when it used to be the population of Helsinki…

Jobseeker Visa Proposed for Finland, may be implemented in 2009

Tags: Everything — Author:   @ 2:54 am

The Ministry of the Interior’s workgroup on migration has come up with a proposal to implement a new type of jobseeker visa for Finland. The visa would entitle the jobseeker to reside in the country for 6 months and after finding work, start working immediately. A huge improvement to the current catch-22 of having to find a job and then apply for a residence permit outside Finland. At the same time the process is to be simplified, and the so-called “labour opinion” done by the Ministry of Labour scrapped. The proposal is now making rounds to the different unions, who back in the day of EU expansion were dead against the free movement of labor. They have eased their stance as no restrictions were placed when Bulgaria and Romania joined in, so there might actually be a chance something sensible will be happening.

The plans are the jobseeker visa programme would start as a trial with maybe a thousand visas and from a few countries, Egypt, Tunisia, Turkey and Ukraine being named. The ministry wants to assess the jobseekers ability to find a job and also make sure that the jobseeker visa is just not a quick backdoor pass to the Schengen and curtail illegal immigration. What I am wondering what will the person do here those 6 months and how… OK, so “look for a job” which now the intellectuals in the employment offices give a wad of photocopies and say “look in the internet”. But will they get an identity number? Will they be able to open a bank account, rent a flat, take a Finnish course… or will all that have to wait until after they get the job contract? Probably the latter, but I’m slightly skeptical of how smoothly the process will go as even EU nationals at present are facing hurdles. I’ll be glad if my skepticism proves wrong. After all, in a surprising wave of common sense, the workgroup says that they wish to ensure that the jobseeker will not be facing unnecessary bureaucracy. There is still the question of which entity will be handling the applications, the Ministry of Labour or the new Finnish Immigration Service.

Finnish Immigration Service – the administration of migration issues will be reorganised as from 1 .1. 2008. An entity responsible for migration and integration will then be established within the Ministry of the Interior comprising of the Directorate of Immigration and units relocated from the Ministry of Labour to this entity will include at least the Immigration Policy Team, the Immigration and Work Permit Team, the Advisory Board for Ethnic Relations, Reception Centres, the Office of the Ombudsman for Minorities, and the National Discrimination Board. The name in Finnish will  be “Maahanmuuttovirasto” (Immigration Office) but in English apparently they’re trying to be a bit more amicable.

Now after the trials period of the jobseeker visas, possibly by 2010 or 2012 the jobseeker visa would be available globally. Might be a good time now to start to take a certification teaching Finnish for Foreigners – I still don’t think the employers’ attitudes in the trades will change that dramatically in a mere 3-4 years. Or who knows – there is the constant talk of “Finland needing workers” while at the same time a disproportionately high part of foreigners is unemployed. And why is that? Those people have some been in the country for years and even been educated here? What gives? Or is it that the employers want to import a cheap labour force to be exploited? People who expect less and can’t understand the language and so can’t stand up for their rights? We have seen a few incidents of this kind happening here, with people being exploited. I am surely hoping this will not be the case.

As with all government proposals, we’ll just have to wait and see. And when the trial period starts the situation in Finland might have changed already. Wish I had the crystal orb to see. In any case, this is one of the hopefully many sensible steps to simplify the process, and hopefully speed it up. At least their intentions are good…. the road to HEL is paved with good intentions.

22.11.2007

Transparency vs. underground economy, another myth busted?

Tags: Everything — Author:   @ 11:48 pm

I found a very intersting article on the World Bank’s website that was written by the Korea Institute of Public Finance.

One of the big subjects that has been talked about here in Finland is the underground economy or “harmaa talous”. One of the arguments used for having public tax records (“transparency”) is to reduce the amount of the underground economy. There was a even a huge attempt at a crackdown on the underground economy in the mid to late 1990′s, in an attempt to bring the level down. Lately, there hasn’t been much talk about it due to other, more pressing news.

What is the underground economy?

It is the unreported exchange of money. This can happen through illegal activites, such as drug trafficking, prostitution, and human trafficking, or it can happen through legal activities, such as bartering goods, unreported work, wages from self employment, employee discounts, payment without a receipt, etc.

In Norway, according to the government tax authority’s web site, 45% of people over 18 years old have purchased unreported labour. It was described as “underground economy” labour. There are probably similar levels in Sweden and Finland as well.

Why is it a problem ?

People may go underground to escape tax and social security burdens. As a result, this can weaken the tax and social security bases. As a result of this, there can be an increase in the budget deficit and tax rates. As a result of this, there can be further growth in the underground economy, and finally there is a weakening in the system, or the country, as a whole.

Growth of the underground economy

The article showed that there was, among all the European countries featured, the most dramatic growth of underground economic activity in the Scandinavian countries between the years 1960-1995. (Denmark, Norway, Sweden) Finland wasn’t included in the paper, but we can assume that Finland has very similar scores. The growth in Scandinavia was much higher than that in Germany, Austria, Switzerland and the US. Norway had the most dramatic increase of all the European and Western countries featured in the article.

Causes of Underground Economy

  • Higher tax rates and social security contributions
  • Increased regulation
  • Forced reduction of weekly working hours
  • Earlier retirement
  • Unemployment
  • Decline of civic virtue and loyalty towards public institutions

I take the liberty to define another cause here, because I believe it is a factor. These countries that have had the highest increase in underground economic activity also have or have had public (published) tax records. The published information is name, salary, capital income, and municipality in the case of Finland, and until recently included wealth. In Finland’s case, the information has been published in tax calendars, newspapers, and other publications which sole purpose is to publish this information. In Sweden in recent years, quite detailed information could be looked up online, but anonymous lookups were stopped during this past Summer. Norway has had press heydays when it has opened its records up for 3 weeks a year. In all these countries, it is toted as some sort of noble democratic ideal and called “transparency”, but it ends up basically being a feeding frenzy for the press and tabloid type entertainment.

There seems to be a psychological factor, a desire of people to take what is their own, that is the money they have worked hard for, and put it in a safe place away from prying eyes. When even peoples’ wealth is published, it should come as no surprise when the government finds that there are billions in Finnish money in the Cayman Islands and other tax paradises where the governments don’t reveal the identity of the owner of the money.

I might also add “fear of the tax official” in the case of Scandinavia, and wanting to avoid dealings with the tax collector because of an unclear definition of one’s rights and responsibilities as a taxpayer. There is an expression “the tax collector is always right” in Finnish. “Verottaja on aina oikeassa.” Noone is comfortable dealing with a boss, for example, who is “always right”.

Methods of Estimating the Size of the Underground Economy

A number of different approaches were used to estimate the size of the underground economy. There were indirect approaches like taking surveys, looking at discrepancies between the national expenditure and income statistics, discrepancies between the official and actual labour force, currency demand approach and physical input. The currency demand approach looks at the demand for cash currency which points to underground payments, because cash is often used with underground payment. The physical input looks at the demand for electricity, since electrical consumption goes hand in hand with economic development. If a country is using more electricity than is accounted for in its GDP, then the rest can be suspected as being used for the underground economy. (read the article)

Most studies try to associate the tax burden with the underground economy, which certainly must be a factor in the case of Scandinavia, due to the high taxes. However, the tax burden in Scandinavia is pretty similar with that in other EU countries, such as France, Belgium, Germany, Italy, etc. But one differing factor is certainly the pubicizing of peoples’ tax and income records from the tax officials. I maintain that this causes people to want to hide their money and their money transactions away from prying eyes.

The conclusion: The use public tax records to reduce the underground economy in Scandinavia has failed quite quite miserably. Or then, I might add, it was always just an excuse used by people who are addicted to “peeping” at other peoples’ private economic affairs and is perhaps the actual cause of this dramatic, disproportional increase in the underground economy in this region.

21.11.2007

Five best movies of 2007 …so far

Tags: Everything — Author: @ 7:44 pm

I’ve seen a good amount of films in 2007, here’s my Top 5 so far…

1. He Was A Quiet Man – If you like dark comedies, you’re in for a treat – I haven’t been this sucked into a film in a long time. Unfortunately this film starring Christian Slater, Elisabeth Cuthbert, and William H. Macey has found a distributer yet (I saw it on a BA flight). I won’t tell you anymore cause I don’t want to give anything away. I’d be very proud to make this my Movie of the Year.

2. American Gangster – If you like gangster flicks, you’ll love this even it follows the typical rise-and-fall plot. Denzel Washington whom I don’t usually like was brilliant in this.

3. Mr. Brooks – Kevin Costner and William Hurt make for a surreal psychological thriller. Great soundtrack too.

4. Superbad – My vote for comedy of the year (even funnier than Simpsons movie & Knocked Up), but you gotta like the new breed of American stoner comedies.

5. Stardust – Think “The Neverending Story” for the 21st Century. I’m kinda embarrassed to admit I enjoyed this so much.

Other considerations: The Simpsons Movie, Breach, Knocked Up – still a lot of 2007 films I’ve yet to see.

Worst Movie of the Year: Reign Over Me – I was boo-ing in the theater. So pretentious, so phony, so patronizing – soooo awful.

…what was your favorite and least favorite of 2007 so far?

20.11.2007

A Million (Wo)Man Tax Hike In For 2008

Tags: Everything — Author:   @ 11:43 pm

Lowering the quality of the blog with another tax-related posting.

Now not necessarily due solely to the TEHY deal(*), but to the general level of salary raises negotiated, the Kuntaliitto (Association of Finnish Counties) reports that 119 counties of the 416 will raise their municipal tax percentage effecting about one million people, and only three counties on Åland lower it for 2008.

(* Meanwhile there has ensued an amazing amount of bickering of who actually will get what and how much over the TEHY deal.)

The majority of the counties raising their tax percentage, the highest being 21% as opposed to the median of 19% are already small counties with already poorer economies. (For comparison, Helsinki and Espoo have 17,5% Vantaa 18,5% and Kauniainen “where the rich live” the lowest in the country at 16% ). The other change for 2008 will be the difference in the “cost of living rating” between counties will be abolished, so there will no longer be I and II rate counties. The rates have affected salaries and benefits, as the II-rate counties have been regarded with cheaper living expenses reflecting lower salaries and benefits. Thus, Finland will become an equally expensive country.

The municipal tax percentage effects directly the income taxation of a wage earner. Other taxes the counties levy are property taxes, which in Finland are low, and some cities have been lowering them so their net effect will be lower.

The total budget of the counties in 2008 will be 17,8 milliard (=american billion) euros, of which the “municipal tax” effecting directly the personal income taxation comprises of 14,9 mrd €, the property taxes a meager 0,9 mrd € and the rest 1,6 mrd € comprised of their share of the “corporate tax”, which is a flat rate of 26% divided by the state, the counties and by parishes. (Oh yes, corporate entities pay “church tax”). More information on life, death and taxes can be found at www.vero.fi

Meanwhile, for comparison: in Sweden the municipal taxes run at 30-33%, Iceland  11.24%-13.03%, in Denmark the average is 33% and Norway  the municipalities don’t have individual percentages. However in all the Nordic countries you get hit by progressive income tax, wealth tax, property tax, church tax and whatnot even more vigorously than in Finland it seems.

So sorry for bringing forward another quality-lacking tax issue. It is however something that touches everyone living here in the welfare state, municipal services depend on the county budget. If you have broken streetlights you can see for yourself – or rather stumble in the dark – over what it means for the county to be lacking the funds.

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