The three largest parties to gain power in last night’s Finnish parliamentary elections have dramatically different political agendas. Fortunately for entrepreneurs, employment and entrepreneurship is one of the areas with the fewest differences overall. However, there are differences and depending on how the new government will be formed – these might have significant effects on entrepreneurs and their incentives as well. Below are some of the key areas of change these three parties are trying to achieve (from an entrepreneurial point of view).
National Coalition Party
National Coalition Party (NCP) is the largest of the new parliament with 44 seats from 200. They were also part of the government and their chairman, Jyrki Katainen, is the former Minister of Finance. Compared to the Social Demoratic Party and True Finns, NCP is by far the most entrepreneurial.
NCP states in their program/goals (in Finnish) for the elections that they realise entrepreneurship and successful companies are the core of a modern welfare society. They also aim to improve the social acceptance of entrepreneurs as well as create incentives to employ more people through taxation. NCP is the only party to also mention that new growth companies will be achieved through supporting of private investments in a market oriented way.
NCP has not stated its exact proposals on taxation, but it states corporate tax must be lowered, as must taxation of employment. The party supports the increase VAT as a modest increase to the capital gains tax, while overall striving for a more leaner progressive tax compared to the other two potential government parties.
Social Democratic Party
Social Democratic Party (SDP) is a former opposition party which attained 42 seats in yesterday’s elections. SDP’s goals are a lot more vague overall compared to those of the NCP. While aiming for better employment conditions in the country, they do not mention entrepreneurship at all in their political agenda (in Finnish) for the government.
Regarding taxation, the SDP seeks to tax capital gains and wealth more than currently. This means the return of the so called tax on wealth, which is annually applied to one’s overall net savings (if above a certain figure). SDP also doesn’t want to increase the VAT from its current 23% nor income taxes. Again, there are no mentions of their stance on social costs and other taxes to entrepreneurs as they completely seem to disregard this group.
Finally, the largest gains in the Finnish political history were achieved by True Finns. Their political agenda is a lot more colorful and stricter in many senses compared to NCP and SDP. However, this doesn’t really mean they offer any more concrete solutions or suggestion to the two previous parties mentioned.
True Finns, while being very strict about the cultural agenda of the nation, does seem to aim for the improvement of conditions for small businesses. They state the goal of overall reducing taxes for small businesses. True Finns also acknowledge the importance of the current Finnish heavy industry and their position as the supplier of work for other small businesses.
Regarding taxation, True Finns seek to increase the tax on dividends and the taxation of non profit groups. They also seek to keep the current level of corporate taxation. Like SDP, they want to bring back the tax on personal wealth. Furthermore, they seek to make capital gains tax progressive and increase income tax at the upper end to end “show-off consumerism”. While the party claims to be very pro small business, its proposals seem to tell otherwise.
The talks to form the new government will be very difficult indeed. It seems that by looking at the party agendas and not taking personal views of the members into account, NCP is by far the most entrepreneurial and supports the global move towards a more entrepreneurial friendly climate.
In today’s economic situation making entrepreneurship, and especially growth entrepreneurship fueled with private investments, more difficult and less appealing through taxation is simply economical suicide. With SDP and True Finns clearly making it more difficult for private investors to work in Finland we might see an amputation of the fast growth we’ve been able to build here in the past years.