---
title: "The Growth Report — Sami Miettinen and Martin Paasi on Viisasteluklubi"
titleOriginal: "Viisasteluklubin kasvuraportti: Tsemppiä hattuun ja painetta tuubiin! Martin Paasi, Sami Miettinen"
description: "Ivan Puopolo hosts Sami Miettinen and, newly elected to parliament, Martin Paasi to work through the Murto working group's growth proposals — replacing inheritance tax with capital gains tax on disposal, and letting share exchanges roll over untaxed. The conversation turns into the sharpest account of why Finland cannot cut: a first-hand description of how a coalition government's programme survives, and Miettinen's own proposal for making the public sector produce more, better, with less."
format: "podcast"
show: "Viisasteluklubi"
hosts: ["Ivan Puopolo"]
date: 2025-03-01
duration: "43:42"
language: "fi"
original: https://www.youtube.com/watch?v=32tR2Qrk1y4
relatedEpisode: https://www.neuvottelija.com/media/viisasteluklubi-ukraine-special/
canonical: https://www.neuvottelija.com/media/viisasteluklubi-growth-report-inheritance-tax-and-the-size-of-the-state/
---

# The Growth Report — Sami Miettinen and Martin Paasi on Viisasteluklubi

**Ivan Puopolo** has both his regulars: Miettinen, and **Martin Paasi** — the long-time Rahapodi
host, now an MP, which makes this the first of their conversations recorded with one of them
inside the machine rather than commenting on it. Paasi's own assessment of the chamber is that it
resembles a two-hundred-person Twitter: people go in to say harsh things to colleagues and then
meet in the corridor as if nothing had happened.

## The number that frames everything

Paasi supplies it. A **€9 billion adjustment programme**, of which €5.2–5.3 billion is direct
cuts — and Finland still borrows over €12 billion this year. His diagnosis is that this resembles
the early 1990s except that there is no Nokia arriving to solve it.

Miettinen's framing is harsher and he offers Argentina as the comparison. Past a certain point,
so much public money is in circulation that any cut produces an unbearable outcry, so nothing is
cut and the share keeps growing until it hits a wall. His figures for what followed there: Javier
Milei cut four per cent of GDP in a single year — about a quarter of the budget in real terms,
which would correspond to a Finnish finance minister cutting twenty billion in one year — after
which the deficit turned to surplus, the exchange rose sharply, the currency stabilised, real
wages rose and absolute poverty fell. His complaint is not that Finland should copy it but that
the Finnish press never reported the analysis at all.

He states his own position as bluntly as he ever does: in his reading Finland has no economic
right, since the largest right-of-centre party is a social-democratic party with a right wing,
and the genuinely liberal party polls around one per cent. Paasi, from inside that largest party,
agrees with the direction and says the twenty-billion version should have been attempted with the
same political capital, because the decline has been long and multi-causal — comprehensive school
results, debt, a stalling economy — and at some point you have to take the bull by the horns.

## The Murto working group

The nominal subject. Two proposals get worked through.

**Replace inheritance tax with capital gains tax on disposal.** Miettinen's case is behavioural
rather than fiscal. Inheritance tax is paid *in advance*, deferral carries a punitive rate, and
in illiquid estates — an unlisted family company — the heirs owe cash before they understand what
they have inherited. In Sweden the shares simply transfer, and tax falls when you eventually sell.

What the Finnish arrangement produces is a predictable sequence he has watched from the
advisory side. A founder turns fifty and asks cautiously whether a child might continue the firm.
The child does not want it. So the owner either winds the company down, or sells — and asks who in
Finland has the money to buy. Other older people, who know less about the business and face the
same problem with less information and the same remaining lifespan. So a foreigner buys it, or
nobody does and the sensible move is to close it or cut the risk sharply. Where the business is
good, the alternative is to accumulate cash inside it so that when the owner dies it can pay
dividends with which the heirs pay the inheritance tax — and the family business federation puts
that idle standby cash at **five billion euros**. Every path lowers risk-taking and raises foreign
ownership.

**Let share exchanges roll over.** The second proposal is one Miettinen frames as investment
banking basics: in Sweden the chain of share ownership effectively never breaks, so when a private
equity investor buys a founder-owned company the founders can roll their proceeds into the new
holding structure without paying tax in between. Finland's 34 per cent capital income rate — on
his count roughly the world's third-highest — is charged at every link, which is precisely what
kills compounding. Sweden's wealth growth, he argues, comes from having understood that.

His frustration is with the economists opposing the change, whom he characterises as arguing from
theory without international comparison and without asking a tax practitioner how an estate
actually works. Puopolo supplies the more careful version of the same objection. Economics does
not operate at the certainty levels of physics, so appeals to research are weaker there than they
sound; and politics is not only science — if it were, we would let researchers govern. Some of
this is a values question, and one may hold that taxing a person after their death is simply
wrong regardless of the fiscal effect. His empirical test is neat: if the Finnish system were
genuinely superior, propose to Sweden that it revert to the arrangement it left in 2005 and see
how that is received.

## Why a coalition cannot deliver

Paasi's contribution is the one that could only come from inside, and it is the most useful thing
in the episode.

A party accumulates a folder of everything it wants. Election won, prime ministerial party, print
— and there is a metre-high stack of wishes. Those go into government formation talks against
other parties' equally sincere stacks, and months later a programme emerges which is the best
obtainable with this combination and which has lost **ninety per cent** of what you came in with.
From that day the only task is to execute the programme, because the government can fall on any
day — so you run hundreds of laws through at enormous intensity before it does.

Miettinen's counter is that this is precisely a negotiation problem: you trade with the other
parties, you have priority items, and if tax reduction is a priority you trade elsewhere and do
not trade on that. Paasi's answer is that if one coalition partner walks, the whole house of cards
goes — and that leaders of the smaller parties get taken into a television studio and put opposite
economists for whom inequality not increasing is the highest objective, which is a hard position
to hold out against and which people eventually internalise.

## The size of the state

The section where all three agree and escalate. Miettinen's proposal is a mechanism rather than a
number: put **more, better, with less** metrics on every publicly funded activity, from ministries
downward, and let the people who achieve all three in a year split that first year's realised
savings — after which the clock resets and they do it again. If fifteen people at the state
treasury find a way to save a billion a year permanently, he is content for them to share the
first year's billion, because the saving is permanent.

Puopolo's objection is sharp and Miettinen concedes it: the "more and better" half cannot apply
without limit to a public broadcaster, because more free content simply takes the market from
commercial and independent producers — the "with less" leg has to bind first, and all three have
to happen simultaneously or the mechanism is gamed. Both note the current perverse incentive: a
committee with €70,000 left in November has to spend it, because next year's budget is otherwise
smaller.

Paasi's own position is that Finland should cut roughly half of state spending while reducing
services by perhaps a third, the difference being productivity. His caveat, which he insists on,
is that a country of five and a half million cannot compete by hand-sewing trainers, so
healthcare for all, genuinely good early education and schools, and affordable university access
are permanent investments a small country must make — everyone must be able to become whatever
their own capacity allows.

Which produces his angriest passage: Finland's comprehensive school has been in effective free
fall in PISA since 2002–2003, following decisions taken shortly before, and he considers that
unforgivable because those decisions damaged the country's picture of its own future.

Miettinen's constitutional angle comes from his own channel: he had the chair of the
constitutional law committee, **Heikki Vestman**, as a guest, and the committee had produced an
opinion that taxation has limits in principle. That an unquantified statement of that kind
provoked resistance in Finland is, to him, the whole diagnosis. He would put a ceiling in the
constitution — some fixed share of gross income that must remain with the earner — precisely
because without a stop, the mechanism has no reason to stop.

Milton Friedman supplies the closing frame: you watch your own money carefully, a friend's money
less carefully, and a stranger's not at all. And Puopolo's own conclusion, arrived at after years
of arguing about free speech, is that Finland's deeper problem is not speech but that **freedom
itself is not valued** — freedom meaning distance from the state — because when equality and
uniformity are the highest goods, low income differences and low wealth follow by construction.

They end by agreeing to have the episode transcribed and sent after the Murto report, which
Puopolo proposes calling the Paasi report.

Original recording (Viisasteluklubi): https://www.youtube.com/watch?v=32tR2Qrk1y4

From the same session: https://www.neuvottelija.com/media/viisasteluklubi-ukraine-special/

---

Cite as: Sami Miettinen, guest on Viisasteluklubi — The Growth Report — Sami Miettinen and Martin Paasi on Viisasteluklubi, 2025-03-01, https://www.youtube.com/watch?v=32tR2Qrk1y4. Record: https://www.neuvottelija.com/media/viisasteluklubi-growth-report-inheritance-tax-and-the-size-of-the-state/.