Just Climate Fees

Tiistai 25.6.2024 klo 19.06 - Mikko Nikinmaa

A common complaint against the high and progressive taxation in Finland and other Nordic countries is that it punishes people, who are diligent and favours the lazy ones. While this may be true for direct work taxation, people with high incomes and companies are able to carry out tax planning, which effectively reduces taxes to much less than 10 %. In my opinion the progressive work taxation is not a problem, but what is, is the much lower taxation of capital income than work income. Another major problem is that the carbon footprint of people with high incomes is much larger than that of low-income citizens.

The European Union has successfully introduced emissions trading system, which is used to combat climate change. It was originally not accepted by many “experts”, but has now been shown to be quite effective. One problem the European Union has is that it has no other income but the membership fees. There has been talk about EU starting to collect taxes, taking common loans etc. The nationalistic circles everywhere are strongly against such ideas. However, in terms of climate actions, something universal, or minimally EU-wide, is necessary. A very useful way for funding EU-wide climate action would be to start collecting climate fee, which would be progressive, and without the possibility of “tax planning”. Consequently, the greater your income (both capital and work), the bigger percentage of the income would go to European Climate Fund, which would support climate actions without national borders.