It would be a really great start to this post if I could say that my friends back home always ask me about the tax rate here, but the truth is, they don’t. Mostly, they don’t give a shit, which I am not bitter about at all. Fortunately (for me), I often meet with groups of Americans as part of my job, and they nearly always ask about it. When I tell them I love paying taxes here, I can almost feel their surprise and disappointment. And I’ll admit, it’s a strange thing to say, but I have my reasons. Here goes.
First, I have to mention how easy everything is. As the Finns reading this will know, nearly everything to do with taxation here is taken care of for you. In the spring of every year, you get one piece of paper in the mail that has every box already filled in. You can make adjustments if you like, but if you agree with your assessment, you do nothing at all. End result of this: the Finnish tax authority (Verohallinto/Skatteförvaltningen) is one of the most efficient tax collectors in the world, and I can indulge my natural laziness. Everyone wins here.
Yes, the rate is relatively high. I pay somewhere in the neighbourhood of one-third of my salary in national and municipal tax alone, and sure, I’d like to have that money, so I could spend it on beer and popcorn (an obscure reference to a decade-old political blunder in Canada). But I think the Finnish government does a better job spending my money than I would in its place, from national defence, to infrastructure, to social services. It would be impossible (or at least hard, which to me can be nearly the same thing) to list the many benefits I get as a new Finnish citizen, so I’ll take a look at the marginal benefits of living here, compared to the marginal cost. In other words: what do I get here that I wouldn’t get back home, and how much more do I pay for that?
The costs are simpler. As a single person in Canada, I would pay about 20% of my income, compared to about 30% here. So that 10% of my income is the crucial difference, and represents the marginal cost. The marginal benefit part is harder to calculate, but I can at least summarize a few of the bigger items.
One of the things I appreciate most is the sense of safety you have being on the streets in Helsinki (to say nothing of the rest of Finland). This is a place where you can walk by yourself, in whatever state of intoxication, at whatever time of night, in whatever neighbourhood, and you probably have nothing to worry about. To put it nicely: this is not the case back home. Sometimes on my trips back to Canada, I’ll go for drinks with friends downtown and need to head back to my parents’ place in the suburbs late at night. Once, just by force of habit, I started walking in the direction of home before stopping, saying out loud to myself (I had had a few drinks): “Oh, shit! I’m in Halifax!”, and immediately calling a taxi.
I don’t mean to paint a picture of Canada as some sort of horrible, dangerous country, but this extreme sense of safety is something unique to Finland, as far as I can tell. For me, that’s down to a highly-functioning society and the world’s best police – a subject I plan to get to with similar enthusiasm later.
Health care is another good one – I won’t get into too much detail here, but for the rest of the year, I have health insurance through the Finnish Student Health Service. I had a wisdom tooth taken out last month, a procedure which was quick, professional, and entirely painless, and I got an invoice for 18 EUR in the mail later that week. That’s unbelievable for someone from Canada, even if you do have health insurance. I might go and get another one taken out, just because it was such a good deal! I can hardly afford not to!
What I haven’t listed yet: free universities, a fantastic daycare system, public transport that functions extremely well, cities where investments are constantly made in real improvements for citizens’ lives, and a telecoms regulator that has given Finland one of the best and least expensive mobile networks in the world. When I started writing this, I planned to cover them all, and I even wrote a lot of text on subjects like daycare before realizing that this was turning into a novel. I didn’t want to start some sort of arms race with Risto after my first article, so I’ll save most of that for another time, but I’ll just say I feel like the marginal benefits outweigh the extra 10% in income that I pay annually to Mr. Sipilä and Mr. Pajunen (the Mayor of Helsinki – I mention this because, unbelievably, many people I meet don’t seem to realize that Helsinki even HAS a mayor. It does, and he is a nice man who spent time talking to my parents in City Hall last summer.)
So, this year, when you get your tax return in the mail, think about what you’re getting for the sum on the piece of paper, and ask if you could spend it better, or whether another country would offer a better deal. For me, Finland works pretty well. And if you need to file a US tax return, I am so, so sorry.