Scrapping wealth tax raises wrath of some Social Democratic MPs

Party's left wing calls for more help for poorest

Tero Rönni

Virpa Puisto

Säde Tahvanainen

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Tuesday’s promise by the government to scrap the tax on capital wealth has raised a protest within the Social Democratic Parliamentary group, which the Parliamentary group chairman Jouni Backman calls an "ideological rebellion".
      The announcement prompted calls for measures to compensate the loss by setting up a package to benefit the poorest Finns.
     
One Social Democratic MP gave a statement, saying that he will oppose the elimination of the wealth tax to the bitter end.
      "Finland has implemented a policy that favours investors, owners, and the rich, and nevertheless, investments are at a complete standstill. What more do these rich people want?" MP Timo Rönni writes in his press release.
      Virpa Puisto said that she found it "surprising" that the government was abolishing a tax that yields EUR 120 million at a time when money does not seem to be available for an improvement in income supplements, which would cost about EUR 45 million.
      Similar views were expressed by Social Democratic MPs Säde Tahvanainen and Lauri Kähönen.
      At a meeting of the SDP Parliamentary group on Tuesday, demands were put forward that the poor should be given at least something to make the tax decisions more palatable.
     
The changes to next year’s budget after the approval of the broad-based incomes agreement have yet to be put before Parliament.
      Although some Social Democratic MPs would like to make changes that would give more to the poor, Jouni Backman feels that it is unlikely that any extensive changes are possible in next year’s budget at this stage.
      However, next year’s budget is not a final deadline, as the scrapping of the wealth tax is not scheduled to come into effect until 2006, and Parliament is not expected to debate it until next autumn.
      Backman does not believe that an SDP rebellion can lead to the cancellation of the scrapping of the wealth tax. Of the opposition parties, the Left Alliance is also opposed to the move, but the proposal gets the approval of the conservative National Coalition Party.


Previously in HS International Edition:
  Wealth tax to be abolished in 2006 - Finance Minister calls it "a relic" (1.12.2004)

Helsingin Sanomat