So this curve scribbled on a napkin is now the undeniable peak of economics?
The projected total tax rate for 2025 is 42.3%, and for 2026 it is 42.4%. In 2010, the tax rate was 40.6%, and in 1980, it was about 35%.
https://www.veronmaksajat.fi/tutkimus-ja-tilastot/suomen-verot-ja-menot/veroaste/#2f0f8a25
I don’t know why you brought up the tax rate; I don’t believe I said anything about it. I can say, however, that I think the VAT (Value Added Tax) increase was a really stupid move, but not as stupid as the post-increase bewilderment over people’s lack of willingness to consume.
Targeting cuts is often a value choice; by cutting earnings-related benefits or social security, you cut consumption and economic activity with 100% certainty. Increasing VAT works the same way.
Lowering high taxation doesn’t work that straightforwardly, simply because a high-income person is not under constant economic pressure. Not everything goes toward living expenses; the money might just sit in an account or support the economy of some other country. And besides, in Finland, parties tend to push the agendas of interest groups without caring much about the state finances—it would, however, be desirable to speak directly about values instead of claiming them as facts.
The problem, you see, is precisely that if the alternative is something as muddy as the SDP’s alternative budget. In that light, even a botched economic balancing looks like gold.
My point wasn’t to praise the SDP’s budget, but that the current government’s budget, after the blundering, is the SDP’s budget. After all the hype, it’s the same crap; the money is just partly in different pockets. It didn’t result in increased employment—but unemployment instead. Incentive traps have been worsened and, for the most part, the profitability of working has been weakened.
Especially when the dynamic effects of tax cuts only genuinely start to show later and/or once their scale is expanded (income taxation etc. → improvement of incentives for work and entrepreneurship) - I cannot understand how these dynamic effects always seem to be ignored when talking about the impact of tax cuts on the economy.
Will those dynamic effects start to show during this government term—or even this decade?
For my part, I’ll say that I much prefer a government that doesn’t botch balancing the state finances over a bunch of bunglers riding from one scandal to another. Regardless of whether my values align with the government’s or not. This seems to be a minority opinion in today’s world.
The failure of this government was already guaranteed by the fact that nothing was learned from the first time getting into bed with the Finns Party (persut); instead, they had to go and bang their heads against the same wall again.


