Economics, Econometrics and Finance
6 years ago

Finland's Tax Model Draws Line Between Earned and Capital Income for 25 Years.

1 view
Nordic Tax Journal
The Nordic model: 25 years of drawing the line between earned and capital income in Finland
Reijo Knuutinen

Paper Summary

The Nordic model in Finland's income taxation system has been in place since 1993. It distinguishes between earned income, which is taxed progressively, and capital income, which is taxed proportionally. The model has faced criticism for fairness issues but still has strong support. However, in practice, it has not always been effective, leading to the need for special tax laws and resulting in numerous court cases related to tax avoidance.

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