Finland is situated in Northern Europe. Therefore it is also known as the Nordic country.
Also, Finland is the happiest country because of the low crime rate, best education, and chilled nature. Apart from that, the first-class beauty of nature is enough to mesmerize the world.
However, the US is situated in North America and shares a border with the Atlantic & Pacific oceans.
Canada and Mexico are the neighboring countries of the US. Grand Canyon, sports, and a few tech innovations are the attractions of the USA.
Furthermore, taxes are imposed on both countries by their government. The rate is changing from property, consumption, health care, and so on.
The benefits also differ from one country to another. Finland taxes support all levels of education, unemployed, and disabled people.
Moreover, the US tax supports education, goods & services, and the technology of the state. Keeping these circumstances in mind, we are giving information about Finland’s tax rate vs. the USA.
Does Finland have higher taxes?
The taxes might look like a headache but they provide help to education, technology, and the military base of the regions. The highest tax rate from 2016 to 2021 is given below for comparison.
| Years | Highest tax in Finland | Highest tax in the US |
|---|---|---|
| 2016 | 51.6% | 39.6% |
| 2021 | 51.60% | 35% – 37% |
So, it is clear from the above table that Finland has slightly higher taxes than the US.
How much tax do you pay in Finland?
The rate of taxes is different in Finland. In the below table, we are talking about the average tax paid by the general people from Finland.
| Different Taxes | Rates |
|---|---|
| Social Security Contributions Tax | Employees – 10.26% Employers – 18.19% |
| Corporate & Capital Income Tax | 25.5-28.9% |
| Regular Housing Rates & Taxes | 0.60%-1.35% & 0.32%-0.75% |
| Leisure Properties | 0.50%-1.00% |
| Transfer of Property. | 4% |
Despite this, we are providing data on the tax rate in Finland compared to the US.
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Finland Tax Rates vs USA Best Comparison
- Corporate tax rates
Finland’s corporate tax imposes 20% as corporate income tax (CIT) of their global income from the corporate sectors. This tax rate was reduced in 2014 from 24.5% to the straight 20.0% to the people.
However, the US corporate tax is ground on the taxable income after reducing the cost of expenses. The tax rate was 35% ago, but in 2017, Trump (Ex-President) reformed it, and now it is only 21% payable.
- Income tax rates
Finland provides the best education system with admirable teaching faculties and a decent working environment for the employees.
Because of this, 56.95% is the rate of personal income tax is in 2021. Besides that, the average employment rate of the US is 59.22%. So, the US government formed seven brackets of taxes.
We are mentioning all the tax rates and income amounts according to the US dollars downward.
| US Tax rates | Taxable Income unmarried people in USD | Taxable Income married people in USD |
|---|---|---|
| 10% | 0 – 9,950 | 0 – 19,900 |
| 12% | 9,951 – 40,525 | 19,901 – 81,050 |
| 22% | 40,526 – 86,375 | 81,051 – 172,750 |
| 24% | 86,376 – 164,925 | 172,751 – 329,850 |
| 32% | 164,926 – 209,425 | 329,851 – 418,850 |
| 35% | 209,426 – 523,600 | 418,851 – 628,300 |
| 37% | 523,601+ | 628,301 |
The above tax rates are manifest as the results of different rates for the individuals and married people of the US.
- Sales tax rates
Refined petroleum, Kaolin-coated paper, Large flat-rolled stainless steel are the most exported things, along with the Sulphate chemical wood pulp and Sawn wood. And this includes the sales tax of 24% for Finland, and the lowest is 22%.
In the US, Refined petroleum oil, Crude oil, Electronic circuits, cars, and Petroleum gases are exported. Therefore, the rate of sales tax is different from state to state. We can’t say the custom of sales tax in the US.
- Social security tax rates
The social security tax rates are associated with the labor income of employees and employers. Therefore, this amount helps the government of Finland as well as the US for health and welfare.
Along with social programs for the people of the state. Accordingly, Finland’s tax is 31.55% lowest, and the highest is 33.94%, including employees and employers.
Further, the rate of the US is 6.2% for both companies and employees, and jointly it is 12.4%.
- Health care & insurance tax rates
Finland is a happy country with lower crime rates and a high standard of living. Moreover, the chance of health issues is much lower because this is a pollution-less country.
Even so, the rate of health care insurance is $4,516 per capita. On the other side, the US ranks number 20 for giving a splendid living life. And the health care insurance is $10,624 per capita.
- Property tax rates
The property taxes are levied on the owner of the property. The owner has to pay the property tax to the regional government.
The ordinary rate of regular housing areas is 0.60% – 1.35% and 0.325 – 0.75%. Furthermore, the 4% rate is imposed on the property transfer tax.
But, in the USA, the property tax rate is 2.80% to income percentiles of 60-80.
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- Church tax rates
Finland charges a mandatory tax on the religious set of people. And the Finland government earns church tax from the two churches. The Finnish orthodox church and the evangelical Lutheran church pays tax between 1% to 2%.
In the US, the churches are also considered public charities. Thus, they are free from the state, local income, property, etc., taxes. Therefore, even after earning cash, the churches don’t pay the taxes in the US.
- Consumptions tax rates
An amount charged on the consumption of goods and services is a consumption tax. These taxes are indirect and sales taxes in addition to VAT taxes.
The consumption tax rate of Finland is 24.0% for their goods and services. Moreover, the US has a knee-high percentage of the income from these consumptions with total tax revenue of 8.2%.
The above conversation is all about taxes in Finland compared to the US. And moving to the next, there are some pros and cons that exist and are as follows.
Pros & Cons
The people of Finland are aware of tax-paying benefits to the government. Accordingly, 53.52% are paying taxes from 1995 to the last 2020 year.
It involves better quality education, better welfare, and social programs in the country. Therefore, the government of Finland charges around 58 euros per citizen on their athenaeum.
But, in the US, the government uses taxes for civic duties and manages safe, reliable roads for the citizens.
Frequently Asked Questions
- Why is Finland’s tax rate so high?
In a country where equal opportunities matter the most, Finland carries a high standard of living. The decent working environment and best quality education make this country engrossing, with a few social programs.
It has become the most common reason for paying higher taxes to the Finland government.
- How is tax calculated in Finland?
If you are making the payment of living in Finland of Euros 30,000, you have to pay the average tax of 39.2% (Euros 11,760). This is how the tax is calculated.
Conclusion
The blog consists of information about the tax rates for Finland and the US. Here you will see many points like health care insurance tax, sales, property, consumption, and the rest of the tax.
And there are some old tax rates that were changed in 2017, by the US government. Apart from this, you will get information about the exports of these two countries, Finland and the US.
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