Reality television has introduced us all to the joy of the "big reveal." HGTV specializes in this sort of story. The perky couple, handsome brothers, or plucky first-time homeowners spend most of an episode covered in plaster dust and paint. Then after the final commercial break, they pull back the curtain on the dream interior so viewers can feel inadequate about their own homes. (VH1's Dating Naked did things a little backwards, with the "big reveal" up front, but still managed to wring some drama out of the format.)
In Finland, tucked between the Baltic Sea and the Arctic Circle, they do things a little differently. For starters, they love reindeer sausage! They play host every year to the World Wife-Carrying Championship, where whoever crosses the Finnish line first takes home his wife's weight in beer. But on a more sober note, the Finns have decided to discourage the sort of income inequality that's growing across the world. So, in the interest of transparency, they publish everyone's income tax returns!
The Finnish Tax Administration schedules their big reveal for 8:00 AM on November 1. The New York Times calls it "National Jealousy Day," which seems appropriate, and Finnish newspapers assign up to half of their staff to covering the event. This year, taxpayers reported earning a total of €140 billion and paying €46.8 billion in tax, making Finland one of the highest-taxed countries in the world. But of course the real fun lies in snooping through the individual returns: your bosses, your neighbors, and your friends and family.
Back in 2013, a pair of video game developers named Ilkka Paananen and Miko Kodisoja set the record for the highest capital gains. That's the year they sold 51% of their company Supercell, which makes games for mobile phones. The $62 million they paid on the gains from that sale boosted the entire country's capital gain total by 20%. And they became folk heroes for not taking advantage of any planning strategies to pay less.
Two years later, one reporter discovered that several executives had relocated to Portugal to avoid tax on their pensions. It's hard to blame them for wanting someplace warmer, of course, even if it means leaving the reindeer sausage behind. But the story caused such an uproar that Finland rewrote its tax treaty with Portugal to close that particular loophole.
Last year, Supercell's Paananen and Kodisoja took home the gold and silver at €65.2 million and €57.5 million, respectively. (That sounds even better than winning your wife's weight in beer, right?) Aleksander Hanhikoski, founder of a real-time payments company, picked up the bronze with €24.6 million. Three more Supercell execs helped round out the top ten. There were 12 women among the top 100, with Ulla Riitta Sjöström ringing the bell at number 28 after selling her family's civilian shelter equipment business.
Revealing everyone's income isn't the only way Finns use tax returns. If you get caught speeding, your fine is based on your income. In 2015, the polissi clocked hotelier Reima Kuisla doing 64 in a 50-mph zone. They looked up his income right on the spot, and issued a ticket for roughly $62,000! (Kuisla's car probably has the latest charcoal scrubber system to filter out the smell of poverty, but that $62,000 still had to stink!)
What do you think would happen if our IRS revealed everyone's income? Would you be willing to pay more tax to impress your neighbors? If not, then call us to help you fly under the radar. We bet we'll save you enough for all the reindeer sausage you can eat!
Fall is Planning Season
John Leidy, EA
DIY Books Coach
It was the third day of the very first income tax course when I realized that it will become my mission to help people understand their taxes better to be able to make better decisions and STOP wasting money on taxes they should not have to pay.