Despite the complexity of the world, The Federation of Finnish Enterprises, as an advocacy organization, must form positions on issues. I will illustrate the complexity of this process with a timely example: should the inheritance tax be abolished? <\/p>\n\n
Brief disclaimer: The Federation of Finnish Enterprises advocated for the abolition of the inheritance tax, together with other business organizations, during the spring budget framework session. Unfortunately, the matter did not progress. The abolition of the inheritance tax is therefore our organization’s stance, and I personally stand fully behind it. <\/em><\/strong><\/p>\n\n So, should the inheritance tax be abolished? Many entrepreneurs’ initial reaction is: of course it should! However, when the probable replacement for the inheritance tax, the capital gains tax, is introduced, assessing the situation becomes a degree more complicated. A model based on capital gains tax would further ease already significantly alleviated generational transfers of businesses and save some entrepreneurs considerable, even enormous, sums. At the same time, according to our organization’s own assessment, it would mean a tax increase for a significant portion of our members. The reform would thus benefit some of our members and worsen the position of others. <\/p>\n\n The question of whether the inheritance tax is good or bad for our members is therefore not black and white. So, how should The Federation of Finnish Enterprises form its stance in such a situation? Based on the significant benefit to an individual entrepreneur, the interests of the majority of members, or the overall societal benefit? In many discussions, I have encountered the idea: “The Federation of Finnish Enterprises should more aggressively pursue the interests of entrepreneurs \/ its members.” What does that ultimately mean? <\/p>\n\n I argue that we suffer from the consensus reality fallacy<\/em>. We assume others see the world fundamentally the same way we do, and therefore we believe that everyone could agree. <\/p>\n\n At The Federation of Finnish Enterprises, we talk about growth, encouragement, risk-taking, ownership, and the entrepreneurial interest. These words are repeated in our discussions, statements, and programs. But do they mean the same thing to all of us? <\/p>\n\n Growth can mean internationalization, a new funding round, and hiring dozens of new employees.<\/p>\n\n Growth can mean the courage to hire that first employee.<\/p>\n\n Growth can mean a few new customers, a slightly better livelihood, or finally being able to take a proper summer vacation.<\/p>\n\n And many do not want to grow their business at all. More important is to do meaningful work, support themselves and their families, and maintain their freedom or grow as a person. <\/p>\n\n All these are the views of entrepreneurs. The views of our entrepreneur members. And all of them are valid views on growth. <\/p>\n\n This must be said aloud: in individual policy issues, our members do not always have a common interest.<\/p>\n\n But a common interest does exist, and it lies deeper: in the conditions for entrepreneurship. Reasonable and predictable regulation, predictability of taxation, functional social security for entrepreneurs, and freedom to contract. Defending these unites sole proprietors and employers of a hundred people. When more detailed matters are on the agenda, it is precisely there that the organization must act openly in forming its positions. <\/p>\n\n So, could The Federation of Finnish Enterprises simply pursue the option that benefits the majority of its members? Not always. <\/p>\n\n If abolishing the inheritance tax were to decisively facilitate the continuation of thousands of viable businesses, the preservation of jobs, and the emergence of a new generation of entrepreneurs, the significance of the change could be great. This is true even if the direct benefit only applies to a portion of the membership. For one, it’s about whether the business continues in the next generation. For another, it’s about a tax increase of a few hundred euros. Thus, the mere number of beneficiaries and losers is not always sufficient grounds for a decision. <\/p>\n\n Nor is the largest single monetary benefit. Otherwise, we would end up primarily advocating for the interests of entrepreneurs who have the most assets, the largest businesses, and the strongest financial interests. That would not reflect the reality of our membership either. <\/p>\n\n One thing must be stated clearly, so there is no misunderstanding: preparation and decision-making are different matters. Weighing the impacts belongs to preparation. Positions are decided by bodies elected by the members \u2013 and that is how it should be. The fact that the immediate interest of the majority alone does not determine the preparation does not mean that someone other than the membership makes the decision. It means that a honestly weighed proposal is brought to the members for decision, not a pre-digested “common interest for all.”<\/p>\n\n In my opinion, every significant stance should be examined from at least four perspectives:<\/p>\n\n Scope. How large a portion of the membership does the change affect?<\/p>\n\n Magnitude of impact. A small detriment to a large group and a crucial benefit for the future of a business to a smaller group are not directly comparable.<\/p>\n\n Ecosystem. Does the reform increase the creation of businesses, continuity, growth, employment, and ownership changes?<\/p>\n\n Strategy. Where should The Federation of Finnish Enterprises use its limited political capital? In what matter can we be flexible to gain progress on an objective that is even more important to our membership? Advocacy is not just about presenting individual demands, but about prioritizing and building political wholes.<\/p>\n\n And on top of these, one promise is absolutely needed: we will openly tell our entrepreneur members what value judgment we are making and why. If we prioritize facilitating generational transfers over keeping all members’ taxation unchanged, we will say so aloud. If, on the other hand, we deem the price too high, we will justify that just as openly. Both can be honest, justified positions. It would be dishonest and unfounded to present either as an obvious common interest for all entrepreneurs.<\/p>\n\n In the inheritance tax example, my answer is this: I can stand behind the abolition of the inheritance tax because I consider the significance of generational transfers and the continuity of ownership to the entire entrepreneurial ecosystem to be great. But only if we also tell our members the price \u2013 that the replacement model may tighten taxation for some \u2013 and do not claim the choice is self-evident. The stance may be the same, but the decision-making and the way the decision is justified determine whether a member trusts their organization.<\/p>\n\n The strength of The Federation of Finnish Enterprises does not come from finding that one correct entrepreneurial perspective, because such a thing does not exist. Our strength comes from our ability to bring together very different entrepreneurs within the same organization and to form positions that recognize their diverse realities: sole proprietors, employers, growth entrepreneurs, local brick-and-mortar businesses, international companies, family businesses, and entrepreneurs ending their careers.<\/p>\n\n Therefore, I promise concrete action: during my chairmanship, a member impact assessment will be conducted for significant stances of the organization, and the value judgment made will be openly documented for the membership. Not for the sake of bureaucracy, but because the organization belongs to its members. Especially when decisions are difficult.<\/p>\n\n The chairman’s task is not to declare one reality as correct. The chairman’s task is to ensure that all of them are seen and heard before the organization claims to know what the entrepreneurial interest is.<\/p>\n\n Don’t assume \u2013 build. Despite the complexity of the world, The Federation of Finnish Enterprises, as an advocacy organization, must form positions on issues. I will illustrate the complexity of this process with a timely example: should the inheritance tax be abolished? Brief disclaimer: The Federation of Finnish Enterprises advocated for the abolition of the inheritance tax, together with […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-447","post","type-post","status-publish","format-standard","hentry","category-entrepreneurs"],"yoast_head":"\nDoes a common “entrepreneurial interest” exist?<\/h2>\n\n
The majority’s voice alone does not decide \u2013 but members must always decide<\/h2>\n\n
Four Perspectives and One Promise<\/h2>\n\n
Consensus should not be assumed, but built<\/h2>\n\n