Economy and Taxation

The services supporting the welfare of citizens requires financing that is made available by well functioning market economy that creates jobs, and by a versatile economic life. As Christian Democrats, we want to take care of the economic balance of the public sector and we want to be prepared for the pressure brought on by the demographic changes. The increased need of welfare services can not be satisfied without a durable and adequate financngl base. The increased dependency load sets a particular requirement for all working-age people to be active in working life.

Finland is committed to the principles of durable development, striving to fit together economic stability, high environmental protection requirements, increasing social welfare and improving living conditions. These goals can best be reached by following the principles of socially and ecologically viable market economy.

The instruments of economic policy have continually grown fewer in the open global world economy. In the open world economy, the competition for production and jobs leads to an increased competition of companies and countries over competent and highly educated labor force. The condition of the public economy and the infrastructure as well as the overall welfare and skills, influence the competitiveness of our country.

In economic policy, the goals need to be high employment, low inflation, surplus in the balance of current accounts and balance of the state and municipal economies. Christian Democrats strive for an annul growth of productivity of 1 - 3%. Productivity needs to further improve in the public sector. Inflation needs to be kept at two percent.

The structure of taxation needs to be modified so that taxation is decreased on things whose use is encouraged due to their usefulness. Taxation should be higher on consumption and activities that need to be discouraged due to their harmfulness. At the moment it seems unlikely that the total tax level could be lowered because ensuring the welfare services demands further contributions as the population is aging and the dependency load gets heavier. Progression in taxation should be maintained, income levels evened out and different income groups treated equally.

In our opinion:

• Food VAT needs to be lowered from 17% to 12%.

• Higher taxes on alcohol and cigarettes are necessary to cut consumption and disadvantages caused by these products.

• Car taxation needs to be scaled based on emissions. Tax subsidies are needed to boost transferring to the use of bio fuels.

• Working needs to be favored instead of stock market speculation. That is why the tax on the profit of sale of short term ownership needs to be increased and the stock exchange tax reinstituted.

• A child increase on the income tax deduction needs to be given to parents of an underage child.

• The defects of the inheritance tax and the gift tax need to be abolished and the lower limit of the tax free inheritance made higher.

• Possible income tax cuts need to be focused especially on small income wage earners. The possibly resulting losses to the municipalities need to be compensated in full.

• In the three-way collaboration system (between government, employers' and employees unions), the government needs to make sure that moderate income agreements are reached. The three-way collaboration needs to also include the entrepreneurs' organizations and central citizens' organizations.

• Real estate tax should not be extended to include farmland and forests.