Editorial The movement of labor should not be tax-frozen

Editorial|Editorial

Finland the labor market is plagued by a matching problem: labor and jobs do not coincide. The workforce is in the wrong place or the perpetrators do not have the skills for the job that would be available. A record number of jobs are now open in Finland, but the employment rate is slowly improving. The movement has coagulated.

The encounter problem is a big challenge for the entire welfare state. A high employment rate would make it easier to pay for the welfare state.

One government after another talks about the need to increase productivity. The means needed to raise the employment rate may be more assertive, but sometimes those voters do not like.

There would be solutions to the encounter problem that could be a little easier. Those that do not directly interfere with, for example, unemployment security.

In the National Economic Journal, research director Essi Eerola and leading researcher Teemu Lyytikäinen from the State Economic Research Center find out the behavioral effects of a transfer tax on housing. The buyer of a share home pays a transfer tax of two per cent to the state and the buyer of the property four per cent.

Eerola and Lyytikäinen will review the effects of the 2013 transfer tax and research in the field. At that time, the tax rate on share housing rose from 1.6 to 2.

Researchers according to the transfer tax withholds people in unsuitable housing. The 2013 reform reduced the willingness to move, and the government’s desired increases in tax revenues were therefore small. If the workforce is to move from one country to another and from one city to another in search of work, at least taxation should not stop the movement.

Researchers have a good tip: a transfer tax that freezes the business should be replaced by a more neutral means, such as a property tax increase.

The editorials are HS’s statements on a topical issue. The writings are prepared by HS’s editorial staff and reflect the magazine principle.