---
title: "The Societal Costs of Taxation – What Do We Know About the Adverse Effects of Finnish Taxes"
authors:
  - name: "Ropponen, Olli"
    url: "https://www.etla.fi/henkilot/ropponen-olli/"
    sameAs:
      - "https://orcid.org/0000-0002-5175-6284"
      - "https://twitter.com/ropponen_olli"
date_published: "2026-01-19"
series: "ETLA Raportit - Reports"
series_number: "172"
issn:
  - "2323-2447"
  - "2323-2455"
jel_codes:
  - "H21"
  - "H24"
  - "H25"
  - "D61"
  - "H30"
language: "fi"
publisher: "ETLA Economic Research"
pdf_url: "https://www.etla.fi/wp-content/uploads/ETLA-Raportit-Reports-172.pdf"
identifier: "https://www.etla.fi/julkaisut/id/ETLA-Raportit---Reports-172"
abstract_translations:
  en: "This report examines the benefits of different types of taxes in relation to their adverse effects, using a modeling framework and the international economic research literature. The basis for the study is literature on the causal effects of different tax types on their respective tax bases. These effects play a central role in determining the welfare losses caused by taxation and are therefore at the core of assessing the adverse effects of taxation. The modeling framework, in turn, makes it possible to incorporate causal effects directly into welfare analysis without the need for information that is less commonly reported in empirical studies, such as so-called compensated effects. The report examines several different types of taxes which, taken together, account for 84 percent of all taxes and tax-like revenues projected for the Finnish central government in 2026. Based on the results, clear differences are observed in the balance between benefits and adverse effects, both across different types of taxes and across different groups of taxpayers."
---

# The Societal Costs of Taxation – What Do We Know About the Adverse Effects of Finnish Taxes

**Published:** 2026-01-19  
**Categories:** Reports  
**URL:** https://www.etla.fi/en/publications/reports/verotuksen-kustannukset-yhteiskunnalle-mita-suomessa-kaytettyjen-verojen-haitallisuudesta-tiedetaan/

#### Abstract

This report examines the benefits of different types of taxes in relation to their adverse effects, using a modeling framework and the international economic research literature. The basis for the study is literature on the causal effects of different tax types on their respective tax bases. These effects play a central role in determining the welfare losses caused by taxation and are therefore at the core of assessing the adverse effects of taxation. The modeling framework, in turn, makes it possible to incorporate causal effects directly into welfare analysis without the need for information that is less commonly reported in empirical studies, such as so-called compensated effects. The report examines several different types of taxes which, taken together, account for 84 percent of all taxes and tax-like revenues projected for the Finnish central government in 2026. Based on the results, clear differences are observed in the balance between benefits and adverse effects, both across different types of taxes and across different groups of taxpayers.

---

## Additional Information

**Saatavuus:** 2

**Issn:** 2323-2447, 2323-2455 (Pdf)

**Sarja Nro:** 172

**Sarja:** ETLA Raportit - Reports

**Kieli:** fi

**Sivuja:** 36

**Paivays:** 19.01.2026

**Jel:** H21, H24, H25, D61, H30

**Lataa Pdf:** https://www.etla.fi/wp-content/uploads/ETLA-Raportit-Reports-172.pdf

**Key Words:** Welfare Costs of Taxation, Optimal Taxation, Behavioral Responses to Taxation, Marginal Value of Public Finds (MVPF)

**Kansikuva:** https://www.etla.fi/wp-content/uploads/etla-raportit-reports-172-kansi.jpg

**Kirjoittajat:** Ropponen, Olli

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