New policy in public finances

A party meeting of Sósíalistaflokkur Íslands, held on December 12, 2020, approved the following policy for the party in public finances:

Sósíalistaflokkur Íslands wants all emphasis in public finances to be on welfare and equality, people receive what they need from the state and pay what they can towards public consumption. Furthermore, the country's main infrastructures, such as the school system, healthcare system, banking system, transport system, welfare system, energy utilities, and more, should be socially operated, and ensure that the state does not outsource related tasks and sets an example in honest business practices. Services in the healthcare, education, and public transport systems should then be free of charge for residents outside the tax system, as stated in the party's policies on education, health, and transport.

In recent decades, the state's financial policy has led to increased costs for the public in services, whether healthcare, education, or other basic services, e.g., through various co-payment systems. Neoliberalism and the public sector's indulgence of capital owners and large corporations have led to increased inequality in society, and the gap between the wealthy and those living in poverty is constantly widening. A handful of families in Iceland own most of the wealth, and in the name of stability, low-income people, senior citizens, disabled individuals, and the unemployed are held responsible for the state's cuts.

Sósíalistaflokkur Íslands wants an immediate response to the welfare cut policy that has prevailed in the name of neoliberalism, with a complete overhaul of the financial system. This development, in the form of the system bleeding families and businesses dry and the constant demand for a deficit ban so that debts may not exceed 30% of GDP, can be reversed by implementing methods such as MMT (or Modern Monetary Theory), which allows for better control of capital flow, keeping interest rates low, and guiding us out of the constraints of neoliberalism.

The country's resources, whether fish in the sea, lakes, waterfalls, geothermal energy, forests, land, tourist attractions, and more, should be sustainable and kept in national ownership. Resource tax should be increased and ensured to improve the nation's basic capital stock, but resources should not be a gift item for the wealthy that can be transferred, inherited, and speculated with.

The emphasis in the country's public finances shall always be on public welfare and equality, so that all our systems support the less fortunate, and that people and companies who are better off contribute more to common funds. The wage system should be made fairer so that wage differences are more reasonable both within the state and the private sector by capping the highest wages at most three times the lowest wages, and that anything paid above three times the lowest wages within companies is not recorded as an expense for the company and would not be deductible from income before tax assessment.

The tax system should then be utilized in every way as a real income equalization tool, and personal tax credit significantly increased and adjusted according to price changes of recent years, tax brackets increased and high-income tax collected so that there is a full wealth tax here.

Furthermore, it should be prevented that private limited companies and their subsidiaries can be used to hide income, in addition to capital income being combined with earned income so that the wealthy cannot avoid paying normal taxes on their income like workers.

Tax investigations shall be carried out properly with the aim of achieving desired results, and not pursuing poor people, disabled individuals, and sole proprietors, but rather focusing on high-income earners and large corporations that may be evading taxes.

The tax system must take into account the societal changes that robotization reflects. Many jobs are lost in the industrial revolution we are witnessing, and this needs to be addressed with taxation earmarked for the welfare system or social security.

Children shall not be taxed under the age of 18, but limits should be set on how much they can hold in an account so that their accounts cannot be misused. The VAT system needs to be reviewed, and taxation on essential basic goods, medicines, safety products, and baby products should be abolished, and VAT brackets increased.

The banking system in Iceland needs a thorough review regarding its values and role. A community bank should be established which will, among other things, be able to change the landscape of the housing market. Furthermore, indexation should be abolished, and an end put to complete bank secrecy so that tax havens can be traced and their use prevented.

Seldom has there been such a great need for innovation and cooperatively run small businesses. The tax system shall take into account the size of companies, and large corporations shall be partially democratized, but the tax system shall also include corporate income tax brackets, as is common abroad, which prevents larger companies from having more opportunities to reduce tax payments than smaller ones.

Furthermore, the state shall pursue an active employment policy, conduct research, and be formative in its development, offer employment supply insurance to respond to economic fluctuations, and the public sector shall also increasingly offer part-time jobs and build incentives into the system so that private companies do the same.

Clearer rules shall apply to the registration of MPs' interests, and individuals with excessive ties to large corporations or capital shall not have access to parliamentary seats/ministerial positions so that it is undisputed that MPs work for the public interest.

Parliament and the Ministry of Finance shall seek active cooperation with the public when it comes to financial policy-making so that they reflect the will of the people and the real living conditions in the country.

The policy of Sósíalistaflokkur Íslands regarding public finances is ......that the emphasis of the country's public finances is on welfare and equality....that the country's financial policy should be reviewed and methodologies such as MMT (or Modern Monetary Theory) should be implemented, which is one way out of the constraints of neoliberalism....that the state finances and attends to the basic infrastructure and needs of the citizens, such as the school system, healthcare system, banking system, transport system, welfare system, energy utilities, and more....that a full fee be collected for the utilization of nationally owned resources so that resource rent forms one of the main revenue sources for the state treasury....that the highest wages are never more than three times the lowest wages within the public sector, and that anything paid above that within private companies is not calculated as a deductible expense before corporate income tax is levied....that wages, pension payments, and benefits that people need to live on are never so low or cut that they hover on the brink of international and national poverty lines....that tax-free thresholds be significantly raised and indexed....that the tax system is used for income equalization with high-income tax and more tax brackets....that capital income is combined with other income so that the wealthy cannot avoid income tax....that laws on private limited companies be changed so that income or assets cannot be hidden in them for the purpose of avoiding normal taxes or municipal levies....that tax investigations focus on high-income earners and large corporations....that the VAT system be reviewed and value-added tax on essential basic goods be abolished....that automation and robotization be taxed and earmarked for the social security system....that children are not subject to tax assessment under the age of 18, limits are set on their assets so that their identification numbers cannot be misused for financial purposes....that a community bank be established....that indexation be abolished....that an end be put to complete bank secrecy so that tax havens can be traced and their use prevented....that the state pursues an active employment policy and is formative in its development through research and direct participation, encourages part-time jobs and offers employment supply insurance....that startups / innovation and new and small businesses receive increased support, and the tax system takes into account the size of companies with tiered corporate income tax....that large corporations are democratized....that people with excessive ties to large corporations or capital do not have access to parliamentary seats/ministerial positions so that it is undisputed that MPs work for the public interest....that Parliament and the Ministry of Finance seek active cooperation with the public when it comes to financial policy-making so that they reflect the will of the people and the real living conditions in the country.