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The Reykjavík Grapevine Issue 12 — 2015

ICEL A ND Iceland | Inequality




So What's This I Keep Hearing About Rising Inequality in Iceland? Words by Kári Tulinius @Kattullus Illustration by Lóa Hjálmstýsdóttir


ers lived with was the most right-wing of wealthy countries in OECD." Stundin points out that in 2007, if you compared the wealthiest one percent of the population in the United States and Iceland, the former paid 30 percent of their income in taxes, while the latter paid 13 percent.

here are many reasons for rising inequality in the world, but in Iceland the main cause is simple. The current right-wing government has lowered taxes affecting the rich. To illustrate this, let us pick an example at random: the wealthy Mr. Sigmundur Davíð Gunnlaugsson. His tax payments went down from roughly 122,000 Euros last year to 54,000 Euros this year, a reduction of about 55 percent.

And now the Icelandic government is trying to give rich Icelanders more money again. That worked well last time. It would perhaps be a little harsh to suggest that the richest one percent of Icelanders are idiots who should not be trusted with anyone's money, including their own. However, the Icelandic public is none too fond of the idea that rich people should pay less in taxes, especially as basic services, like healthcare, are underfunded. According to opinion polls, the Independence Party's support is back down to the level it was immediately after the financial crash, for which it was widely blamed. The Progressive Party has lost half of the support it had in the last election.

Don't try to fool me, that's not a random example, that's the Prime Minister of Iceland. The case of the Prime Minister is not brought up to suggest that he is using his power to enrich himself. The 68,000 Euros or so have no affect on his finances. Business paper Viðskiptablaðið estimated in 2013 that he and his wife were worth about 7.5 million Euros. Now, that is not the kind of money where you can buy an island and build a skull-shaped secret lair, but it is enough to get you in the top 0.05% of the richest people in the world. Bah, what good is money if I can't hold the world hostage with my giant skull laser? No political party has ever had a majority of seats in the Icelandic parliament. Therefore coalition governments are the norm. In theory, having two or more political parties in power should cover possible blind spots and limit excesses, but sometimes politicians of different striphes share blind spots. The two parties currently in power—the Prime Minister's Progressive Party, and the Independence Party—are both headed by men from wealthy families. Government rhetoric and policies make it clear that the two parties have little or no idea what life is like when you do not benefit handsomely from the abolition of a wealth tax.

But are they wealthy enough to understand the struggles of those making down payments on a giant skull laser? Most of the Prime Minister's lower tax payment can be explained by the abolition of the wealth tax, though his income tax payment also went down by roughly 35 percent. As pointed out by journalist Gunnar Gunnarsson, who broke the story for the news site Austurfrétt, this is the result of changes made to the Icelandic tax code last year. Jóhann Páll Jóhannsson analysed the new tax system in the newspaper Stundin, writing that the "changes made by the current government to the tax code have been most beneficial for the wealthiest in Ice­ landic society."

Wealth does not bring happiness, as the ancient wise men say. Happiness is a warm giant skull laser. These changes are in opposition to what the government formed by the Social Democratic Alliance and the Left-Greens did after coming into power following the 2008 financial crash. That government increased taxes on large businesses and the wealthy and decreased the tax burden on those with low-to-middle income. So things have taken a drastic swing in the opposite direction.

Have any populist parties risen up, as has happened in Europe? The beneficiary of public discontent, at least in terms of polling, is the Pirate Party. Since spring, it has consistently polled as the most supported party in Iceland. The two left-wing parties, as well as the centrist party Bright Future, have also declined in polls. The parties in government have not reacted so far, possibly thinking that the Pirate Party will lose followers as elections draw nearer. But if it does not happen, or another opposition party draws the populist following, then they might have to pool their extra money together for a giant skull laser.

Like when I push my kid on a swing and don't pay attention, it hits me right in the face. Speaking to Stundin, Columbia University economist Jón Steinson says that before the crash "the tax code Iceland-

Speaking of adorable baby animals, the town of Reykjanesbær has finally found a solution for their out-of-control vegetation by setting goats loose on patches of thick and fast-growing plant life that has been the bane of lawn mowers and weeders. The goats were so efficient that city officials have confirmed they will be rehired next summer.

In other news: an archaeologist reportedly made “the find of the century” in a newly discovered Icelandic cave. In the recently discovered and appropriately named Leynir (“Conceals”) cave, Adolf Friðriksson, the director of the Institute of Archaeology, has found signs that a person cooked horse meat at some point in the 12th century, despite there being no record of any people living in the area at the time. So, there’s good news and there’s bad news. Good news: Following a combination of strong public support and government willingness, it looks like we could soon be saying “bless bless” to Iceland’s naming laws. In a recent radio interview, Minister of the Interior Ólöf Nordal told reporters that she believes the laws need to be abolished. To this end, her ministry is currently drafting a bill to do just that.

Now for the bad news: Björk has cancelled a series of shows, including Iceland Airwaves. The reason given for the cancellation was a scheduling conflict and unfortunately the cancellations aren’t without precedent: several Björk shows were also cancelled in 2008, 2011 and 2012, due to medical problems and staging issues.

Licensing and registration of travelrelated services The Icelandic Tourist Board issues licences to tour operators and travel agents, as well as issuing registration to booking services and information centres. Tour operators and travel agents are required to use a special logo approved by the Icelandic Tourist Board on all their advertisements and on their Internet website. Booking services and information centres are entitled to use a Tourist Board logo on all their material. The logos below are recognised by the Icelandic Tourist Board.


List of licenced Tour Operators and Travel Agencies on:

T E M P L A R A S U N D 3 , 101 R E Y K J AV Í K , T E L : 57118 2 2 , W W W. B E R G S S O N . I S

Profile for Reykjavík Grapevine

The Reykjavík Grapevine Issue 10 2015  

The Reykjavík Grapevine Issue 10 2015