Of all the different taxes out there, personal income tax is arguably the hardest pill to swallow.
While most people understand its important, it’s still hard to accept that the government is taking a slice of your hard-earned money.
If given the chance, it’s easy to imagine that most people in the world would avoid paying this tax. But, statistics on taxation around the world show us that paying high-income tax does not always translate to misery.
Finns are a great example. At 51%, Finland charges the tenth-highest personal tax rate to its citizens across the globe. Despite taking home less than half of what they make, Finns are still the happiest people on the planet. Why is that? Essentially, money (alone) does not hold the key to happiness.
Excellent Governance
According to the Legatum Prosperity Index in 2018, the Finnish government is second to none. Research shows that it is highly effective, observes the rule of law strictly, places a premium on democracy, and encourages political participation.
The Finnish judiciary is also a portrait of integrity. The government’s judicial branch is declared by the World Economic Forum as the most independent in the world, based on The Global Competitiveness Report in 2018.
Every nation has untrustworthy politicians, but Finland has the fewest of these characters. Finnish public servants are viewed to be the third least corrupt, according to Transparency International’s Corruption Perceptions Index in 2018.
Combine all of these factors, and it is easy to understand why Finns do not mind giving the people in their government a large chunk of their earnings. Immense faith in local politicians renders the Nordic country’s mammoth personal income tax. Average Finns may not even feel robbed, for it is more about what they get in return than how much they pay their public workers.
Outstanding Freedom
Another reason why no people are happier on Earth than Finns is the quality of freedom they experience in their motherland. Those living in Finland enjoy enviable political rights and civil liberties, empowering them to lead fulfilling lives.
Several studies reveal that Finns vote in the second-freest and -most reliable elections in the world, have the easiest access to official government information in the European Union, are being granted the third-most personal freedom and choice anywhere, and relish the fourth-best press freedom among all countries.
Interestingly, natural-born Finns are not the only ones who benefit from such freedoms. Immigrants get them too, for they find Finland to be the most welcoming and the most willing to integrate them into society.
Consistent Prosperity
Finland was not always rich, nor is it the wealthiest in the region. However, the overall prosperity of the country has consistently ranked in the world’s top four since it was first measured by the Legatum Institute Foundation in 2007.
The Finnish government still has some work to do in the field of health, but Finns receive the best quality of education on the planet. In terms of wages, the people of Finland make more than most people outside their country’s borders while working far fewer hours annually than the global average.
An eye-popping personal income tax rate may depress most workers, but not the Finns. They have a lot to celebrate and are happy to pay the price for them.
