Finland's Social Democratic Party has delivered a definitive rejection of granting taxation powers to the country's 21 wellbeing services counties, warning it would create a "new taxman" and increase the burden on workers. The statement from SDP MP Joona Räsänen clarifies the party's position after recent ambiguity and sets the stage for a major political debate over the future funding of Finland's reformed healthcare and social services system.
Räsänen, a key opposition figure shaping the SDP's economic policies, stated the party's line is clear. "At the moment, we do not support taxation rights for the wellbeing services counties," he told reporters at the Parliament House in Helsinki. "The reason is fairly clear. With the current number of regions in the current tax system, there is simply no feasible model to implement, nor is one coming."
His comments provide crucial clarity following an appearance by fellow SDP MP Krista Kiuru on a national television discussion program, where her answers on the topic were interpreted as evasive. The SDP now positions itself firmly against a model that would allow the counties to levy their own taxes, a concept known as 'maakuntavero' or regional tax.
The Core Argument Against a New Tax Layer
Räsänen framed the opposition in stark economic terms. He argued that implementing such a system would require a complete, radical overhaul of Finland's entire tax structure. It would also necessitate a dramatic reduction in the number of wellbeing services counties from the current 21. Without this foundational restructuring, he warned, the move would merely establish a new taxing authority.
"If the tax system is not changed, a 'new taxman' would be created and work taxation would increase sharply," Räsänen stated. He connected this directly to the party's core voter message. "Such a line is not something the SDP wants to support in this situation. In our opinion, the tax cuts decided in parliament should be focused on ordinary Finns. We do not support increasing the tax burden on ordinary Finns in this situation."
This stance emphasizes the SDP's traditional focus on progressive taxation and protecting lower and middle-income earners. The party argues that adding a county-level income tax would directly contradict recent parliamentary decisions aimed at lightening the overall tax load for citizens.
A Long-Standing Debate with Deep Roots
The funding of Finland's social and healthcare services, collectively known as 'sote', has been one of the most contentious and long-running political issues of the past 15 years. The reform, which finally took effect in January 2023, transferred responsibility for organizing these services from over 300 municipalities to 21 new wellbeing services counties.
The primary goal was to curb rising costs, streamline service provision, and ensure more equal access across the country. However, the question of how to fund these massive county entities sustainably has never been fully resolved. They currently operate on state allocations, but many experts and some political groups have long argued that granting them their own revenue-raising powers is essential for true autonomy and long-term stability.
Räsänen pointed to historical precedent to bolster his argument. He noted that a parliamentary committee in the previous legislative term also investigated the possibility of county taxation rights and arrived at a similar conclusion about its impracticality under the current framework.
The Contradiction in Party Policy
Despite the firm stance articulated by Räsänen, a clear contradiction exists within the SDP's own official documents. The party's political program, approved at its most recent congress, contains a clause that supports preparing for county taxation rights as a long-term goal.
The program states: "The sustainability of the funding base and the strengthening of the regions' self-government must be ensured. For this reason, the taxation rights of the regions must also be prepared as a long-term objective." This line suggests a strategic openness to the concept in the future, contrasting sharply with the absolute rejection presented by Räsänen for the present political situation.
This internal discrepancy highlights the tension between ideological long-term goals and short-term political and economic realities. It leaves room for the party to potentially revisit the issue if the structural prerequisites—like a reduced number of counties or a reformed national tax system—were ever met.
The Expert Divide on Regional Autonomy
The debate over regional taxation rights splits economists and policy experts. Proponents argue that it is a cornerstone of meaningful self-government. "Without control over a significant portion of their revenue, the wellbeing services counties are merely administrative arms of the state," says Dr. Elina Saarinen, a public finance researcher at the University of Helsinki. "They have responsibility without real fiscal power, which hampers innovation and local accountability."
This school of thought believes that tying local funding directly to local decision-making improves efficiency and allows regions to tailor services to their specific demographic and economic needs. It is a model used, in various forms, in several other European countries with decentralized welfare systems.
Opponents, aligning with the SDP's current view, warn of serious risks. Their foremost concern is the potential for increased regional inequality. Wealthier counties with stronger tax bases could potentially offer better services or lower tax rates, while economically struggling regions might be forced to cut services or impose higher taxes, creating a vicious cycle.
"Finland has historically valued equality of service across the country," notes Professor Marko Jäntti, a specialist in welfare economics. "Introducing a fragmented regional tax system poses a direct challenge to that principle. The administrative complexity and cost of running 21 different small-scale tax systems is also a legitimate concern."
The Government's Position and the Road Ahead
The current right-wing coalition government, led by Prime Minister Petteri Orpo's National Coalition Party, has not pushed aggressively for county taxation rights during its first year in office. Its focus has been on broader national austerity measures and economic competitiveness. However, the recent interim evaluation of the wellbeing services county reform, led by Under-Secretary of State Marina Erhola, did mention the topic, keeping it in the policy conversation.
Räsänen used his platform to redirect the focus from structural funding debates to immediate service concerns. "Right now, the wellbeing services counties do not need any 'new administrative hassle'," he asserted. "The focus must be on improving people's access to care. All regions need peace to work in this situation. That has been the SDP's message all along."
His comment reflects the significant operational challenges and growing service backlogs many counties are facing just over a year into their existence. The SDP's strategy appears to be to frame the taxation debate as a distracting bureaucratic exercise, contrasting it with the urgent, practical need to improve healthcare delivery and reduce waiting times.
A Defining Choice for Finland's Welfare Model
The SDP's clarified position draws a clear line in the sand for the foreseeable future. It signals that any move toward regional taxation would face fierce opposition from the largest party on the left, potentially requiring a broader political consensus or a different parliamentary majority than currently exists.
The debate encapsulates a fundamental choice about the future architecture of the Finnish welfare state: should it remain a nationally unified, centrally steered system funded through progressive state taxation, or evolve into a more decentralized model where regional variation and autonomy are accepted features? For now, the SDP is championing the former, prioritizing national equity and simplicity over regional fiscal independence. This stance ensures that the search for a sustainable funding model for Finland's most expensive public services will remain a central and heated political battle for years to come.