Highest income tax rate: 49.2%
Average 2010 income: $49,000
Finland’s current marginal rate of 49.2 percent comes into effect at $91,000. The country has been reducing its top marginal rate from 53.5 percent in 2004 to put more money into the pockets of households in order to fight the effects of inflation.
Municipal tax rates are also significant in Finland — varying between 16.25 percent and 21.5 percent. If an individual belongs to a Finnish church, then a church tax of 1 percent to 2 percent may also be due. Workers have to pay additional social security taxes like unemployment and pension insurance premiums. Other taxes include property tax, gift tax and tax on interest as well as a capital gains tax of 28 percent.
Finland’s export-driven economy has been threatened by Europe’s financial crisis. The country could fall into a recession this year after the GDP forecast for 2012 was slashed to 0.4 percent from 1.8 percent. The government announced plans in March to increase revenues by $1.98 billion via tax hikesby 2015. The measures include income tax hikes for high-earners with annual incomes or pensions of more than $132,000, as well as those with inheritances in excess of $1.3 million.
Pictured left: Street in Helsinki.