Party leaders argue taxation in first major election debate
Finnish political party leaders were drawn into a small argument over taxation on Wednesday in the year’s first major public debate linked with Parliamentary elections in March. Nobody was willing to make any promises on possible leeway to cut taxes.
"Chips need to be saved for negotiations with labour market organisations", said Centre Party chairman, Prime Minister Matti Vanhanen in a panel organised by Finnish trade unions in Helsinki on Wednesday.
"The Social Democratic Party is not promising to keep taxation at a high level", said SDP leader, Minister of Finance Eero Heinäluoma. He was also unwilling to make advance commitments on the manner of implementation.
"I would put the brakes on excessive tax promises."
According to Heinäluoma, any room for tax reductions that exists should primarily be used to ease the taxation of work, and the focus should be on lower taxes for those with low and medium incomes.
Vanhanen said that the reduction of higher marginal taxe rates should be continued.
"Income tax reductions should target all income levels."
Vanhanen added that there would also be reductions in the taxation of pensioners, inheritance and gift taxes, and in VAT on food.
Opposition National Coalition Party chairman Jyrki Katainen would not give any specific figures: "We are visualising the size range, and looking at which taxes are impediments to growth", he said.
Katainen’s agenda includes moderate cuts in taxes in all income groups, the lifting of taxation on small dividends, and the elimination of inheritance tax from the children and spouse of a deceased person, and from businesses that are passed down to the next generation.
Jan D. Oker-Blom, deputy chairman of the Swedish People’s Party, feels that 50 per cent would be a reasonable level for the highest marginal tax rate. He would also want to eliminate inheritance tax and to change environmental taxation so as to encourage environmentally responsible behaviour.
"Taxes cannot be reduced endlessly", said Green League vice chair Anni Sinnemäki.
"I would be very careful about promising tax cuts", she said, adding that there is not enough money to secure welfare services.
"Services before tax cuts", was the line of Left Alliance leader Matti Korhonen, adding that he would nevertheless be willing to accept "small adjustments" in income tax.
Heinäluoma said that the next government should draw up a concrete employment programme as soon as it takes office. He said that labour market organisations should be invited to take part in preparations for the programme, noting that such cooperation has brought good results in the past.
The party leaders agreed that employers should be penalised for focusing on short-term employment contracts without sufficient cause. All were also ready to promote a broad-based incomes agreement.
"If it were up to the government, the incomes agreement would be ready", observed Arto Nieminen, chairman of the Union of Journalists in Finland, who chaired the debate.