Environmentally harmful taxation

The Finnish taxation system in general is not particularly complex or bureaucratic. Car taxation is.

We have a fairly high car tax which you have to pay when registering a car. Calculation of the tax is intentionally made very complex, so complex that there is little information in the internet about it. Why? Because, for some reason the tax officials like it to be too complex. A simple tax might have loopholes, and every found loophole is fixed with a new small fix. As a result, if you import a car here, you can not know the tax beforehand. A good example is "ELV", which stands for "not-VAT". As the state can not demand payment of VAT (value-add tax) of a tax recursively, they have invented a tax called "ELV", which is calculated like VAT but paid of the car tax. Talk about bureaucrats...

There seem still to be loopholes that no-one had thought of. For example, as the Kauppalehti (in Finnish) magazine today points out, you do not need to pay car tax for a Hummer H2. The amount of tax would be under normal conditions about 35 000 € for a car of that price. Why? That's because they weights more than 3,5 ton, which makes the Finnish law treat them for tax purposes as trucks, which are exempt from car tax. Probably they are not considered trucks for the purpose of driver's licenses, I assume. So, the hallmark of idiotic waste of gas is in fact subsidized by tax authorities.

Well, you can guess there are also other environmental problems with the Finnish taxation of cars. Another example are the plug-in hybrid cars, which are illegal in Finland, due to the fact that one does not pay fuel tax for the electricity taken from normal electrical outlets.

Salary inflation

Finland seems to be going into serious salary inflation in these years. The same is true for many other new countries in EU, e.g., Poland and Estonia. Why? The reason is that the labor in these countries have had, for historical reasons, lower salaries than in western parts of EU. After joining EU, workers are free to move to other EU countries with better salary levels.

This is a natural cause for inflation. To prevent people from leaving, the salary levels have to rise to a common level. The problem here is within the process. First, the salary level of the labor of export industries rises, as the customers are in countries with better salaries. Thus, their customers can afford to pay more. A second group are the professionals of some highly contested (employer level) fields, like surgeons, CEOs, and other such people.

The trouble is that within the domestic industry (selling their products domestically) and domestic service industry (including public health care), the customers are the local people who have less money to spend than the customers of the export industry. Of course, the salary levels of the export industry rise, but slowly. In the same time there is a need for service industry professionals, most notably nurses, abroad. As almost all of Europe is, in reality, facing a shortage of labor due to too low birth rates, these nurses are being sought after to jobs abroad.

Now the Finnish nurses are going to do mass resignations with an intention to force a rise to their salary level to the same level as their Swedish colleagues get. The problem here is that their paying customers, the majority of taxpayers, do not get the same high wages that their colleagues abroad get, so they do not afford paying that much.

The results of this kind of development are even more evident in countries with even a bigger gap to close, e.g. Estonia. For Estonians, there is almost always a possibility to go to work in Finland with a quadruple salary. Many professionals do so. But that does not mean that the remaining people can afford the prices (or taxes) needed to make possible paying the same level of salaries to these people in Estonia. Because of loss of labor, the salary levels rise fast in Estonia, especially in Tallinn.

An counterexample happened in the former DDR (East Germany). There the wage level rose to the West Germany's level overnight. The result was destruction of almost all of the industry in the country, as the old and mostly obsolete machinery could not be put to produce such turnover that these wages were possible - not after the border disappeared and the people had a chance to buy western, cheaper and better, products. Of course, there was little possibility of keeping the old price level, either, as that would have resulted in the mass movement of the people to West Germany for better wages. The result has been, however, such a movement as the collapse of the DDR's industry has destructed the jobs in the East. Especially the younger people have moved west to find jobs.

Reaching an equilibrium will be painful. For the Finnish pulp&paper industry, it has taken the entire lifetime of the industry, more than 100 years, to catch the salary levels of Sweden. The Finnish nurses want to reach the level in 2.5 years. Huh. Maybe I should, as an engineer of private sector in Finland, ask a 50% increase to catch my Swiss colleagues, too.

As a bottom line one should be patient with the slow speed that the salaries rise. The wages of the domestic service industry should not rise faster than the purchasing power of the local people. This is, of course, difficult when there is a shortage of labor. Why should people take lower paid jobs in the services if there are better paid export industry jobs available?

Labor-intensive energy

There is much of debate over the shortage of work-force in, e.g., Finland. As the baby-boomer generation is retiring, this shortage is getting worse. As an example, district heating would be an environmentally preferable way of heating houses, compared to direct oil, gas, or electricity. Currently the prime constraint for houses to join district heating in Finland is finding the people to do the job. As in my hometown in Eastern Finland, the people installing the heating pipeline came from Poland. Also most of the industry in Finland is experiencing shortages of labor restricting their growth, in the same time that health care sector would also need more people.

One of the main arguments of some renewable energy sources in Finland, most notably wind and firewood, has been a positive impact on employment - as both are labor-intensive energy sources. Now the question is, can we afford it.

With bioethanol, the question is about putting the purchasing power of car owners (like me) of industrial countries against the poor and hungry people of developing countries. With firewood, the question seems not only to be putting burning wood against production of paper, but also about whether to have more people caring the elderly people in hospitals or have more people picking and processing firewood.

Sick prisoners

There has been news in Finland about a study on the health (mental & physical) of prison inmates. The prisoners have changed considerably during the 21 years that were between this study and the previous one. The most striking findings are

• that most of the prisoners are alcoholic and/or drug addicts,
• a considerable portion of the prisoners (15%) are psycopaths,
• most of the prisoners are not in the prison for the first time, and
• most of the prisoners have mental disorders.

These findings make me wonder, if prisons are or should be mental hospitals of some kind - more than conventional prisons. At least the work of the prison guards has changed a lot: many of the prisoners need guidance and care to get through normal day activities, like washing themselves.

As the society around is getting more and more complicated, one starts to wonder if most of the people put to prison (most are there because of violent acts of some sort) have any change to make it in the open society at all.

Another interesting factoid, from an unrelated newsbit, was that the amount of traditional burglary to storage rooms in apartment houses in Helsinki had diminished considerably, mostly due to the fact that the burglars were mostly getting old and an have got a pension for being old and not being capable of work. When they have an social apartment and a pension, they have little need nor energy to do burglary. The drug addicts of younger generations prefer robbing bikes, mobile computers and GPS navigators, not breaking into storage rooms that seldom have easy-to-carry expensive stuff.

Another interesting newsbit was about black market of booze in Kamppi (Helsinki) every morning. The customers are: drunken people wanting some more, which can not legally be purchased before 9 o'clock; and old alcoholics who can not get their booze legally, because it is illegal to sell alcohol to a drunken person.

I have been thinking, why should we force the prisoners, or the old alcoholics, to open society. There is plenty of empty area in Finland. Why do we not build a few camps for former prisoners? I do not mean prison camps here, but open camps in which the former prisoners could live if they wished to. There would be safe food available, sauna, an own lake for swimming (optionally, we have literally thousands of those in Finland), a warm room in barracks-type houses (reinforced against fire or water damage), and safe but cheap alcoholic beverages (and possibly illegal drugs also) to those who need them. There could be also a possibility to do simple work for living, like in the prison.

I guess we would need two types of these camps: those with drugs and alcohol are permitted, and those which would not have any alcohol or illegal drugs. The latter camps would be for those who want to get rid of their addict, but do not believe that could resist the addiction in the open society. Both camps would have a normal bus connection out, which the inhabitants could use to go to open society to visit or to stay. So, I stress here, these camps would be voluntary. Drug use would be controlled by giving the addicts daily portions based on description by a doctor. The people coming to the "clean" camp would be searched (and possibly x-rayed) to really keep the alcohol and drugs away.

More Poles to Finland

It is a good thing that the French have the xenophobia against Eastern European workers (the famous "Polish plumbers"). Where could Finland muster its needed immigrant workers if the French would compete with us?

I was visiting my hometown in Eastern Finland on my summer vacation. There were works to install district heating on the area that my parents live in. My parents are also subscribing to this opportunity. The drawback is that this installation happens to take place during a heat wave of Finnish economics, with construction works having problems to find material, labor, and machinery to do all the job there is. This has resulted in rapidly rising costs of construction work, causing trouble to many governmental and municipal building projects.

Also affected are the works at my parents place. For the week I visited them, the works at their house were stalled, and no workers to do anything could be seen. At the pipeline construction on the streets there were workers, but those ones did not speak Finnish, nor the Estonian (which is common on construction sites in Helsinki area). They were Poles. Good thing they were there. It is a good thing that Finland lifted the restrictions on immigrant labor from new EU member states in 2006.

We have a growing problem of shortage of labor in Finland. The baby boomers of late 40's are retiring en masse in these years, and in Helsinki area only this means that the new labor (youngsters coming of age) is not enough to compensate even the retiring public sector workers. The trouble is that most of the public sector work is work-intensive - e.g. nursing, health services, education, police, fire brigades - and thus not easy do with less labor. This stresses the importance of reorganizing public work for more efficiency, but also the need of immigrant labor.

Probably it is because of this, that the previously hard-to-get-employed African-origin refugees seem to get jobs fairly well today (my perception of the ethnicity of, e.g., coach drivers, shop cashiers and subway cleaners). What is also helpful to them is that they have now spent a decade in Finland and are quite well capable of speaking fluent Finnish.

Stupid import tariff categories

EU is going to put import tariffs on digital cameras with video capture capability (news in Finnish from Tekniikka & Talous). Imported stuff is categorized and specialized tariffs are put on different types of imports. For example, digital cameras have 0% tariffs but video camcorders have 4.9% tariff. Now there's the problem that virtually all digital cameras have video capture capability.

This kind of categorization is utterly useless and virtually impossible to implement in reality without very odd results. I remember a row between Sony and EU over PlayStation 2 game console, which could also be used as a computer. If I recall correctly, computers had zero import tariff, but game consoles did not. EU appeals court decided that PS2 was not a computer as it was not freely programmable. Sony responded by adding Basic programming capability. I do not remember how this saga ended.

Hey! With convergence of digital devices all around, how can one categorize these products anymore? Is Nokia's N95, e.g., a computer, camera, camcorder, music player, pocket FM radio, GPS navigator, dictating machine, pocket calculator, or phone? I have one, and have used it for all these functions. Is a laptop computer a TV set, DVD player, CD player, game console, computer, or even a phone (with, e.g., Skype)? A computer can also do all these functions, and more.

If one uses import tariffs at all, one should have way more general categories, e.g., all electronic devices as one group, or even all imported stuff with the same import tariff to avoid these problems. This is not generally done, as tariff unions and states want to promote imports of things which help produce own exports (e.g., computers) and minimize imports of consumer goods.

Ethnic unrest in Estonia

There is severe ethnic unrest taking place in the center of the city of Tallinn since yesterday. The reason of the unrest is the government moving a statue erected to commemorate fallen soviet soldiers of the World War II from its original place in the city center to a more remote location presumably on a military cemetery.

Why so much unrest and vocal intervention by Russian government? Here is some background:

• Soviet occupation of Estonia 1940-1941 and 1944-1991 resulting in murder of thousands and deportation of tens of thousands of ethnic Estonians to Siberia - including, among others, the future president of Estonia Lennart Meri and future writer Jaan Kross.
• Soviet Great Patriotic War which is for Russians - of course - a very emotional thing: a very bloody war of survival against the Nazi Germany.
  
• Estonians, like Latvians and Lithuanians, had little choice how to fight against the soviet rule. Some Estonians did it by signing into the Finnish army during the WWII (in the so-called JR (infantry regiment) 200), some by signing into German Waffen-SS division "Estonian". Both are regarded as treason and the latter as pro-Nazi by many Russians.
• Most of the Ethnic Russian population of Estonia (350 000 or 26%) has moved to Estonia, or is descendant to people who have moved there during the occupation. A small portion, however, has been there from the prehistoric times. For the modern ethnic Russian population, it is (of course) very difficult to accept that their movement to the area was a violation of the rights of ethnic Estonians - especially as it was taught in the schools that Estonia voluntarily joined the Soviet Union, and there was no word on the violence that occurred.
  
• It should also be noted, that the killings and deportations of ethnic people in the Baltic states mostly happened years before the Russian people moved in. For many, it is easier to think the new knowledge of history as mere lies or even Nazi propaganda. This is psychologically understandable. The sorry thing here is that the Russian government actively supports this type of thinking.

For all this, the monument for the fallen red army soldiers is a symbol of bloody occupation for ethnic Estonians and an important piece of the collective identity of ethnic Russians.

Similar problems have aroused in, for example, Latvia, where local ethnic Russians do not understand at all that for the ethnic Latvian population, the men who served in Waffen-SS were defenders of the freedom of Latvia. For an ethnic Latvian, there hardly was any other choice for fighting against the Soviet Union than to join the Waffen-SS.

I guess that if you check the facts on the history of the Baltic states from Wikipedia, you may find very different information on Russian pages compared to English pages.

What should one do? The Estonian government should not have a special reason to carry out the move of the statue now, nor on this decade. Nothing would have been lost, had this issue been left for the future generations to solve. This fight is about symbols, not about well-being or life of anybody. In my humble opinion, the wiser should have caved in.

Well, the statue is now already removed from its original site and transported to an unknown location.

Back to the issue of effect of occupation on the ethnic division of a country. There is a UN Comission on Human Rights report from year 1993:

The human rights dimensions of population transfer, including the implantation of settlers

...

35. One of the principal devices used by an occupying Power to
extend control over a territory is to implant its own, or other
reliable population into the territory. Although they may serve a
military objective and may even be armed by the occupying Power,
settlers implanted in occupied territories are claimed by the occupying
Power as its "civilian" citizens. Thus, the occupying Power eventually
asserts that humanitarian concerns compel it to remain in the territory
to extend its protection to the implanted population. This argument may
be combined with other ideological claims concerning the occupier's
"right" to possess the territory for putative security and humanitarian
reasons, or even on the basis of rights, such as "historical rights",
which have no legal basis. This policy is typically coupled with
incremental and/or large-scale expulsions of the indigenous population.
In such cases, the right of the indigenous population to return is
usually denied, ostensibly for "security" reasons, despite the prior
obligations of the occupying Power to respect the refugee's right of
return.

36. In addition to the occupier's security claims, the

implantation of settlers from the occupying Power's own population is
sometimes used with a future, non-military strategy in mind. In the
event that the status of a disputed territory is resolved by eventual
referendum or plebescite, this putatively democratic procedure can be
greatly influenced with the participation of the implanted population
on an equal footing with the indigenous population. Even if this
process results in the eventual separation of the occupied territory
from the occupying Power, the settlers' participation may influence the
terms and conditions of the future status of the territory in a manner
that serves the former Occupant.

Maybe they have read the report, and maybe that is the reason that the Russian government does not want to acknowledge that Soviet Union occupied the Baltic states. The report does not, however, give any answer to the status of the implanted population after the occupation, or the status of the descendants of the implanted population. Those are very hard questions.