High-income immigrants and top innovators react strongly to changes in taxes

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High-income immigrants and top innovators react strongly to changes in taxes

According to the survey, tax incentives have an impact on the migration of certain groups, such as patent-holding top innovators and other high-income individuals.

According to several studies, high-income immigrants and top innovators react strongly to changes in income taxation and R&D tax credits, according to Youssef Zad, chief economist of the Finnish startup community. These people are the ones with skills which are essential to the ability of businesses in the region to innovate and increase productivity. Finland needs skilled labor more quickly, because of the strong increase in R&D expenditure under the R&D funding act. The competition for innovators is intense and they are not queuing up to come to Finland.

High taxation has advantages and disadvantages, as it helps improve Finland's attractiveness. We have to hold onto critical welfare services. Finland's economy is slowly increasing its debt, so any potential tax cuts must be carefully channeled to avoid further weakening of public finances. Income taxation does not affect the migration of skilled labor, according to the literature. I do not believe that it is possible to cut income taxation at all income levels in Finland, at least in fear of labor leaving elsewhere. In the survey, we discussed limited incentives for high-skill and income-level labor that moves to Finland. As a policy change, we should consider increasing the incentives for key personnel taxation, according to Zad.

High taxation can improve the country's attractiveness by funding critical public services. The financing base of the public sector and the reduction of the need for borrowing can be achieved by supporting strong economic growth. In Finland, we need to create a tax-competitive environment. This way, we can attract the skilled labor force that Finland desperately needs to compete globally.