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 have the skills that are essential to the ability of businesses in the region to innovate and increase productivity. The increase in R&D expenditure under the R&D funding act has to improve the availability of skilled labor, which is something Finland needs urgently. The competition for innovators is intense and they are not queuing up to come to Finland.
High taxation has its advantages and disadvantages: it funds critical public services that can enhance Finland's attractiveness. We must 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. The literature shows that income taxation does not affect the migration of skilled labor. I do not believe that it is reasonable to cut income taxation at all income levels in Finland, at least in fear of labor leaving elsewhere. In the survey, we discuss 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, said Zad.
Public services that can enhance the country's attractiveness are supported by high taxation. 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 competitive environment. This is a way to attract the skilled labor force that Finland desperately needs to compete globally.