Editing Economy of Finland (section)

==Taxation==
{{main|Taxation in Finland}}
Tax is collected mainly from municipal income tax, state income tax, state value added tax, customs fees, corporate taxes and special taxes. There are also property taxes, but municipal income tax pays most of municipal expenses. Taxation is conducted by a state agency, Verohallitus, which collects income taxes from each paycheck, and then pays the difference between tax liability and taxes paid as [[tax rebate]] or collects as tax arrears afterward. Municipal income tax is a flat tax of nominally 15-20%,<ref name="veroh">Verohallitus. Taxation of resident individuals: Gross income. {{cite web|url=http://www.vero.fi/en-US |access-date=14 June 2016 |title=Finnish Tax Administration}}</ref> with deductions applied, and directly funds the [[Municipalities of Finland|municipality]] (a city or rural locality). The state income tax is a progressive tax; low-income individuals do not necessarily pay any. The state transfers some of its income as state support to municipalities, particularly the poorer ones.  Additionally, the state churches - [[Finnish Evangelical Lutheran Church]] and [[Finnish Orthodox Church]] - are integrated to the taxation system in order to tax their members.<ref name="veroh" />

The middle income worker's [[tax wedge]] is 46%<ref>{{cite web|url=http://www.nationmaster.com/graph/tax_tot_tax_wed_sin_wor-total-tax-wedge-single-worker|title=Countries Compared by Economy > Tax > Total tax wedge > Single worker. International Statistics at NationMaster.com|website=Nationmaster.com|access-date=29 December 2017}}</ref> and [[effective marginal tax rate]]s are very high.<ref name=autogenerated1>Economic Survey of Finland in 2004, [[OECD]]</ref> [[Value-added tax]] is 24% for most items. [[Capital gains tax]] is 30-34% and [[corporate tax]] is 20%, about the EU median. [[Property tax]]es are low, but there is a [[transfer tax]] (1.6% for apartments or 4% for individual houses) for home buyers.<ref name="oecd2004"/> There are high excise taxes on alcoholic beverages, tobacco, automobiles and motorcycles, motor fuels, lotteries, sweets and insurances. For instance, McKinsey estimates that a worker has to pay around 1600 euro for another's 400 euro service<ref>[http://www.mckinsey.com/locations/helsinki/pdf/finlands_economy_achievements_challenges_priorities.pdf McKinsey: Finland's Economy] {{webarchive |url=https://web.archive.org/web/20070304120247/http://www.mckinsey.com/locations/helsinki/pdf/finlands_economy_achievements_challenges_priorities.pdf |date=4 March 2007 }}</ref> - restricting service supply and demand - though some taxation is avoided in the [[black market]] and self-service culture. Another study by Karlson, Johansson & Johnsson estimates that the fraction of the buyer's income entering the service vendor's wallet (inverted tax wedge) is slightly over 15%, compared to 10% in Belgium, 25% in France, 40% in Switzerland and 50% in the United States.<ref>Karlson, Johansson & Johnsson (2004), p. 184.</ref>{{Update after|2010|11}} Tax cuts have been in every post-depression government's agenda and the overall tax burden is now around 43% of GDP compared to 51.1% in Sweden, 34.7% in Germany, 33.5% in [[Canada]], and 30.5% in Ireland.<ref>{{cite web|url=http://www.tilastokeskus.fi/tup/suoluk/suoluk_valtiontalous_en.html|title=Government Finance|last=Tilastokeskus|website=Tilastokeskus.fi}}</ref>

High income workers, for instance someone making €10000/month gross, living in the city of Vantaa and using €3000/year on commuting to work, pay 33% income tax plus 7.94% social security payments (this varies mildly depending on the age of the worker, but for someone born in 1975, it is currently in the year 2024, 7.94%). This means that 40,94% of the gross income goes to taxes and tax like payments.<ref>{{cite web | url=https://www.vero.fi/henkiloasiakkaat/verokortti-ja-veroilmoitus/verokortti/veroprosentti-ja-tuloraja/veroprosenttilaskuri/ | title=Veroprosenttilaskuri | access-date=19 Oct 2022 }}</ref>

State and municipal politicians have struggled to cut their consumption, which is very high at 51.7% of GDP compared to 56.6% in Sweden, 46.9% in Germany, 39.3% in Canada, and 33.5% in Ireland.<ref name="economicfreedom"/> Much of the taxes are spent on public sector employees, which amount to 124,000 state employees and 430,000 municipal employees.<ref name="oecd2004"/> That is 113 per 1000 residents (over a quarter of workforce) compared to 74 in the US, 70 in Germany, and 42 in Japan (8% of workforce).<ref>[http://search.japantimes.co.jp/cgi-bin/eo20080421a1.html Is Japan's bureaucracy still living in the 17th century? | The Japan Times Online<!-- Bot generated title -->] {{webarchive |url=https://web.archive.org/web/20080517015816/http://search.japantimes.co.jp/cgi-bin/eo20080421a1.html |date=17 May 2008 }}</ref> The [[Economist Intelligence Unit]]'s ranking for Finland's [[e-readiness]] is high at 13th, compared to 1st for United States, 3rd for Sweden, 5th for Denmark, and 14th for Germany. Also, early and generous retirement schemes have contributed to high pension costs.<ref name="oecd2004"/> Social spending such as health or education is around OECD median.<ref name="oecd2004"/> Social transfers are also around OECD median. In 2001 Finland's outsourced proportion of spending was below Sweden's and above most other Western European countries. Finland's health care is more bureaucrat-managed than in most Western European countries, though many use private insurance or cash to enjoy private clinics. Some reforms toward more equal marketplace have been made in 2007–2008.<ref>{{cite web|url=http://www.ek.fi/terveyspalvelualan_tyonantajaliitto/ajankohtaista/index.php?we_objectID=5567|title=Yritysverotus kilpailukykyinen – seuraavaksi palkkavero pohjoismaiselle tasolle - Elinkeinoelämän keskusliitto|website=Ek.fi|access-date=29 December 2017|archive-date=31 October 2007|archive-url=https://web.archive.org/web/20071031150211/http://www.ek.fi/terveyspalvelualan_tyonantajaliitto/ajankohtaista/index.php?we_objectID=5567}}</ref> In education, child nurseries, and elderly nurseries private competition is bottom-ranking compared to Sweden and most other Western countries.<ref name="nordicmodel"/> Some public monopolies such [[Alko]] remain, and are sometimes challenged by the European Union. The state has a programme where the number of jobs decreases by [[Employee attrition|attrition]]: for two retirees, only one new employee is hired.