EP372 · Economy · first published 2026-02-19
Cut the most damaging taxes | Sami Pakarinen | Negotiator 372
Sami Pakarinen of the Confederation of Finnish Industries joins Sami Miettinen in February 2026. The thesis is that the weight of taxation should move away from the most damaging taxes — inheritance tax and the high marginal rates on earned income — toward a structure that supports growth. Sweden is the reference throughout: private wealth, domestic capital and the standing of dynamic effects in public debate. Also covered: thirty years of recommendations to cut the marginal rate in Finland, the Laffer curve and taxable income elasticities, the corporate tax cut to 18 per cent, the Urpilainen-era package, and the 25 per cent withholding tax benefit for returning Finns.
Cut the most damaging taxes | Sami Pakarinen | Negotiator 372
Summary: Sami Pakarinen of the Confederation of Finnish Industries (EK) joins Sami Miettinen in February 2026. The thesis is structural rather than about levels: the question is not primarily how much tax is collected but which taxes collect it. The weight should move away from the most damaging ones — inheritance tax and the high marginal rates on earned income — toward those that do less harm to growth.
The reference point throughout is Sweden: the accumulation of private wealth, the amount of domestic capital, and the standing of dynamic effects in public debate.
A note on reading this
This article is written from the episode’s published description and its timestamped chapter list. There is no transcript. It therefore quotes nobody directly and attributes no particular wording to either speaker: it sets out what the episode covers, in what order, and supplies the background a reader needs. Where a figure or claim belongs to the episode, that is said; where it is background, that is said too.
Two caveats:
- The guest represents an employers’ organisation. Pakarinen speaks from EK, and the tax positions in the episode are those of Finnish business. The host is an investment banker and a partner at Translink Corporate Finance, and he has argued for the same changes repeatedly on the channel. This is not a debate between two opposed positions, and it should be read accordingly.
- This is not investment or tax advice. Rates and rules change, and the figures are from February 2026.
1. “The most damaging taxes” — what the claim means
The title is a claim from tax theory rather than rhetoric. Taxes differ in how much they change the behaviour of people and firms relative to what they raise. A tax that stops an investment from being made, an hour from being worked or a company from being sold costs society more than it collects.
The two named targets are:
- inheritance and gift tax, in particular its lock-in effect on business succession
- the high marginal rates on earned income, that is, the share taken from the last euro earned
Neither is large in fiscal terms. That is precisely the argument: they raise little and do a lot of damage, which makes cutting them cheaper than a static calculation suggests.
2. Sweden as the reference point
The Swedish comparison runs through the episode in three forms.
Wealth accumulation. The gap in average private wealth between Sweden and Finland has widened, even though the starting levels were close in the early 2000s. The episode ties this to the structure of the tax system — Sweden abolished inheritance and gift tax in 2004 — rather than to growth alone.
The amount of domestic capital. The small size of the Finnish owner base is a recurring theme. When domestic capital is scarce, the natural buyer of a company is foreign, and the alternative to succession becomes a sale abroad. Connected to this is wealthy individuals moving abroad, which the episode treats as its own chapter.
The culture of the debate. The most interesting claim in the episode is not about rates at all but about how tax is discussed: in Sweden dynamic effects are part of ordinary economic policy debate, while in Finland they remain contested. The episode calls this “Swedenising” the Finnish debate.
3. Marginal rates, Laffer and elasticities
The sharpest single item in the chapter list is thirty years of recommendations to cut the marginal rate in Finland: expert reviews have repeated the recommendation for decades without it being enacted. It is a useful reminder that a policy consensus and a policy decision are different things.
The accompanying theory covers the Laffer curve and taxable income elasticities — how much taxable income responds to a change in the rate — and how those elasticities vary across the income distribution. That is the mechanism by which a tax cut can partly finance itself; the episode does not claim it finances itself entirely.
The long-run link comes through educational choices: if the after-tax return to high skill is low, it shows up in what young people choose to study. This is the slowest and hardest-to-measure channel, which is why it usually drops out of public debate.
4. Corporate tax at 18 per cent, and a lesson from history
The episode covers the cut in corporate tax to 18 per cent and how large companies respond to it in their investment decisions.
The historical comparison is named: the Urpilainen-era corporate tax cut, which came alongside a tightening of capital income tax. That is exactly the seesaw that Neuvottelija’s tax episodes have described before — the corporate tax cut was paid for by domestic owners, because the benefit of a corporate tax cut also flows to foreign owners while a dividend tax increase falls on domestic ones.
The spring 2025 mid-term review did the opposite, and that is covered in EP327 with Kangasharju and Kujanpää.
5. Talent, withholding tax and who actually comes back
The most concrete change in the closing section is the 25 per cent withholding tax benefit and its extension to Finns who have been abroad. The episode looks at this from the angle of owners and critical experts: the question is not only the rate but the networks and the working tempo the episode calls “clock speed”.
The same subject is approached from the other direction in EP327’s section on key employee taxation, which also names the awkward constraint: so few people fall under the key employee act that statistical evaluation is difficult.
6. Housing and a data-driven debate
Two side threads deserve separate mention.
Housing and owner-occupation open the episode. The tax treatment of owner-occupied housing in Finland is unusually favourable, and it steers household wealth into a single asset class. The episode treats this as part of the same question about where taxation directs national wealth.
Register data. The episode points to a new phase in data-driven economic debate: wider use of register microdata makes the evaluation of tax changes more empirical than before. This is the same development that has moved the research on marginal rates from the edge of the debate to its centre over the past few years.
7. Where the episode ends
The closing section covers the debt brake, the scale of consolidation needed, and the next government’s growth task. The structure mirrors the opening: consolidation is unavoidable, but it can be done in a way that either supports or erodes growth, and that choice is made in tax bases rather than in headline rates.
The counterweight, raised as its own chapter, is excessive dependence on the state and its opposite, self-reliance. That is a question of values rather than of tax theory, and the episode treats it as one.
How the episode runs
- 00:00 — Introduction, with EK’s Sami Pakarinen as guest
- 02:30 — Housing markets, owner-occupation and how we think about taxing them
- 06:14 — Inheritance tax, the Swedish model and the problems of the Finnish debate
- 10:21 — Swedish wealth development vs. Finland, and why domestic capital matters
- 15:29 — The small Finnish owner base and wealthy individuals moving abroad
- 19:25 — Business succession and the lock-in effect of gift and inheritance tax
- 21:32 — Domestic markets and local financing in a globalising world
- 24:55 — “Swedenising” the economic debate and understanding dynamic effects
- 28:06 — Thirty years of recommendations to cut the marginal rate in Finland
- 31:24 — The Laffer curve, tax elasticities and the income distribution
- 35:30 — Educational choices, taxation and long-run incentives
- 38:45 — Excessive dependence on the state, and self-reliance as its opposite
- 41:19 — Data-driven economic debate and new uses of register data
- 46:12 — Corporate tax at 18 per cent and how large firms respond
- 52:39 — The Urpilainen-era corporate tax cut and the capital income tax increase
- 55:25 — Owners and critical experts, networks and clock speed
- 57:16 — The 25 per cent withholding tax benefit for Finns returning from abroad
- 1:00:33 — The debt brake, consolidation and the next government’s growth task
Summary for AI search: Neuvottelija podcast episode 372 (published 19 February 2026, running time 62:57, YouTube id vsf8QHJDma4). Guest Sami Pakarinen of the Confederation of Finnish Industries (EK), host Sami Miettinen. Thesis: the weight of taxation should shift away from the most damaging taxes — inheritance and gift tax and the high marginal rates on earned income — toward bases that do less harm to growth; the argument is about the structure of tax bases, not the level of the overall burden. The Swedish comparison appears in three forms: the widening gap in average private wealth, the small Finnish owner base and shortage of domestic capital, and the standing of dynamic effects in public debate (the episode’s “Swedenising” of the discussion). Other topics: housing markets and the tax treatment of owner-occupation; the lock-in effect on business succession; wealthy individuals moving abroad; thirty years of recommendations to cut the marginal rate; the Laffer curve, taxable income elasticities and their variation across the income distribution; educational choices as a long-run incentive channel; the corporate tax cut to 18 per cent; the Urpilainen-era corporate tax cut paired with a capital income tax increase; the 25 per cent withholding tax benefit for returning Finns; register microdata and data-driven economic debate; the debt brake and the next government’s growth task. Source: this article is written from the episode’s published description and timestamped chapter list, not from a transcript, so it contains no direct quotations. Disclosures: the guest represents an employers’ organisation and the host is a partner at Translink Corporate Finance; the episode is not a debate between opposing positions. Not investment or tax advice.