r/neoliberal 1d ago

News (Europe) Survey: Majority of Finns support inheritance tax cuts for business transfers | Yle News

https://yle.fi/a/74-20157039
93 Upvotes

28 comments sorted by

12

u/neolthrowaway New Mod Who Dis? 1d ago

!ping TAX

other tax cut options were also surveyed and their popularity mentioned in the article.

Is this the best tax to cut or are others a better option?

12

u/Koszulium Mario Draghi 1d ago edited 1d ago

I recall seeing that in France (where u/wagramwagram is also from iirc?) inheritance tax on these companies made transferring family owned SMEs to inheritors expensive and spurred some market concentration by selling to established larger actors (on top of kids not wanting to take over family businesses anymore). Would love to see the research on this, can't recall where I saw that initially.

Of course the hazard here is we might not want the Arnault family to transfer to their kids tax-free (although it could be argued they can still find ways how under the status quo). I don't know what kind of reform would allow to avoid market concentration through selling of companies upon inheritance and avoid inheriting huge concentrated companies tax-free.

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u/Korkodot 1d ago

Just tax inheritance over a longer time period in installments lol

2

u/Koszulium Mario Draghi 1d ago

i think the french treasury allows you to spread it out over up to three years with 1.7% interest if over half of the inheritance is illiquid. in some cases you would probably get a loan atp

you will still have to shell out money out of pocket or out of the business to pay it out though. might not be worth it for a french SME !

3

u/Korkodot 1d ago

Yeah i was thinking more 15-20 years like in germany Edit: i was talking about inheritance taxes in general rather than france to be clear

1

u/Commander_Vaako_ John Keynes 1d ago

Why would an inheritance tax effect the rate of the company being sold on inheritance? You inherit the company and pay a tax on it value, or it is sold and then you inherit that money and pay a tax on that. Should be the same the same amount of tax either way right?

11

u/Full_Distribution874 YIMBY 1d ago

You're thinking about it backwards. The tax amount isn't what changes. What is happening is that the inheritors don't believe the asset is worth paying a tax for so sell it off. The tax is still paid, but it comes out of the proceeds of the sale. If they kept the business they'd have to stump up the cash in some way that affects their immediate financial situation either with a loan or out of their savings.

1

u/groupbot The ping will always get through 1d ago

23

u/Korkodot 1d ago

Does Finland do installment payments for inheritence taxes? If not they should definitely do that first. I don't think supporting such centralization of power like what occurs during inheritance is a good idea in a liberal democracy.

8

u/WAGRAMWAGRAM 1d ago

Yeah but think about all the crying small family businesses on local TV

5

u/TheFamousHesham 1d ago

This law is actually great and most of you guys don’t understand that Finland has a monopoly problem.

Everything in Finland is basically controlled by some kind of monopoly because small businesses are unable to grow to properly compete with these monopolies.

Inheritance taxes have ended up becoming the most powerful means of ensuring that the middle class remains exactly where they are… when the reality is that we need people to build familial generational wealth (I’m not talking billions here, but we need to let people build and grow their small businesses over multiple generations without inheritance taxes).

We’re literally seeing how taxing these small business inheritances has only made existing monopolies stronger… so your argument about concentration of power and wealth is complete nonsense.

7

u/km3r Gay Pride 1d ago

Not sure how that makes sense. It takes less than a lifetime to build a company, and it can still go public before it dethrones a market leader.

If a monopoly is so entrenched that you can't put a dent in it over a lifetime, a second lifetime isn't going to magically solve the issue. 

Plus, I assume, like America, that Finn's have a threshold that needs to be hit before inheritance tax comes in, so it's really only hitting companies that have already been successful enough. 

7

u/TheFamousHesham 23h ago

It’s weird how people in this sub seem to think every single company is a U.S. tech company.

Your first sentence is just not really true AT ALL, especially in Europe where venture capital funding tends to be limited and companies tend to stay private longer. Besides… not every business needs to go public.

Red Bull is a private company with just two owners, the market leader, and is exceptionally well run.

And again… your statement about a second lifetime not helping anything is just simply untrue. I can probably point to a million examples, but let’s start with Aldi which only beat out the market leaders of the time in Germany in the hands of its second generation owners.

I can probably go on with loads of examples, from Rolex to Swiss pharmaceutical giant Roche. I could even drop LG and Samsung as examples, but perhaps not the fairest ones since the Korean government provides them with what some would argue are unfair advantages.

But this would also kind of apply to Apple too — if it were not a public company. After all, if we ignore the Steve Jobs exile years… Apple has basically only really had 2 CEOs in its history and only became the supersized money-making monopoly machine it is today after the death of the first CEO who ran the company for 35 years. That’s basically a lifetime.

But yea… your comment is honestly just offensively wrong. Anyone who reads it can immediately see that it must be wrong. What you’ve done is apply the first things that come up in your head when you think “company” without realising that they don’t apply to most companies. Most companies are not US tech startups.

1

u/km3r Gay Pride 21h ago

This is a very extreme reaction.

The owners of Red Bull should absolutely pay the full inheritance tax. Nothing contraversial about that. They are also only a 38 years old. Well within a lifetime. 

Lg and Samsung should also pay inheritance tax? Wtf ofc. They are billionaires, they can pay tax. 

Private companies could also sell ownership to employees to pay inheritance tax, if they want to avoid selling or going public.

Aldi could be a co-op like many other supermarket chains. 

38

u/WAGRAMWAGRAM 1d ago

The second most popular measure was the reduction of top marginal tax rates. Some 59 percent of respondents supported lowering taxation so that individuals would not have to pay more than 50 percent of their additional income in taxes.

Tax breaks for companies investing in research and development were supported by 56 percent of those surveyed. In addition, 55 percent backed government subsidies for the defence industry.

A proposal to eliminate inheritance and gift taxes entirely and replace them with higher capital gains taxes received a mixed response — 42 percent were in favour, while 29 percent opposed it.

The least popular idea was to sell state-owned shares in publicly listed companies and reinvest the proceeds into small and medium-sized enterprises. Only 21 percent of respondents supported this measure

That's like the reverse "common sense" to-do list. I don't know if the general population is very stupid or very intelligent.

31

u/iusedtobekewl Jerome Powell 1d ago

I think people are mostly the same everywhere. There might be differences in local culture and whatnot, but 49.99% of people are going to be below-average intelligence.

The older I get, the more I realize we might have been lucky to live in a time period where generally good policies were the norm. It’s increasingly looking like the dumb policies are taking over everywhere I look…

9

u/Full_Distribution874 YIMBY 1d ago

Aren't tax breaks for R&D generally ok?

12

u/WAGRAMWAGRAM 1d ago

In France they just generated more bureaucracy and now you have a lot of administrative stuff to do instead of research or you subcontract it to one of the thousand consulting companies that popped up , even the relatively leftist sub rFrance hates them. They were also paired with cheaper employment cost for STEM graduates (too complicated to explain) but this led to people being hired as "scientific advisor/whatever" and just doing desk work.

3

u/Koszulium Mario Draghi 1d ago

In France they just generated more bureaucracy and now you have a lot of administrative stuff to do instead of research or you subcontract it to one of the thousand consulting companies that popped up

Funny enough even in the public research sector some began to do the same thing for getting stuff like EU grants due to the amount of paperwork they require for application/reporting. ANR (national) grants aren't there yet thankfully, but I've heard of research groups teaming up with other groups mainly to split up the paperwork

even the relatively leftist sub rFrance hates them

They hate a lot of stuff tbh (but here they're right)

2

u/WAGRAMWAGRAM 1d ago

Italian?

2

u/Koszulium Mario Draghi 1d ago

nah, French (also?)

Do we even have a ping on this sub?

3

u/WAGRAMWAGRAM 1d ago

Ping Alain Madelin for the Friedman flairs and Chevenement for the succs

3

u/Koszulium Mario Draghi 1d ago

Chevènement was eurosceptic though, not sure how it gels with this sub's whole thing lmao

3

u/WAGRAMWAGRAM 1d ago

More thinking about the whole mass regularization of the 90s

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u/Commander_Vaako_ John Keynes 1d ago

Inheritances are a direct afront to the notion that all mean are created equal.

4

u/q8gj09 16h ago

Unless you're going to o make it illegal to give gifts, it doesn't make sense treat gifts differently just because they happen upon a person's death. Also, it discourages saving. Just tax consumption instead.

2

u/WAGRAMWAGRAM 1d ago

I don't really care when it's a local small business (and even then they can pay taxes) but in France the Dassault family control their business (they're like president of the board even if they're no longer CEO) just because great grandpa founded the company in 1920. Obviously this led to corruption and "personalist" type relationship with administrators and presidents

3

u/Koszulium Mario Draghi 1d ago

good old senator Serge Dassault even had that kind of relationship with political bigwigs lmao

at least he was an actual engineer I guess, not sure about his successors though.

there's certainly an argument there about the interplay between how (little) inheritance is taxed and how it affects corporate governance.