The Network Society - University of Massachusetts Amherst

352 The Network Society
Figure 15.4 An economy based on extensive creativity and
expertise
Creative Economy
Strong
Modern IT
Spearhead
Emerging
Sectors Culture Well-being Etc.
Existing
Sectors
Reformed
Economy Based on Extensive Creativity
& Expertise (services, manual skills, etc.)
It is essential to note that the welfare society is based on the tax revenue
generated by work, not by the tax rate. Tax revenue can be generated
only if the system encourages people to work. Although
participation in unhealthy tax competition will not help maintain the
welfare state, it must be pointed out that excessive tax rates can also
undermine the welfare state.
The welfare society is based on the world’s best expertise and work.
The financing of the welfare state depends, first and foremost, on the
achievement of a high employment rate and on society’s ability to
associate innovativeness with positive expectations by applying tax
rates that encourage work. This will make it possible to finance the
welfare society also in the future. A taxation system that encourages
work also acts as an incentive for skilled employees to stay in their
countries and makes it possible to attract skilled labour from abroad;
this will in turn alleviate the problems caused to the welfare state by
an ageing population.