From Iceland — Believes Capital Should Be In The Countryside

Believes Capital Should Be In The Countryside

Published July 6, 2011

An economist has suggested that the house of parliament be moved to Akureyri, while pointing out that the countryside pays more into the treasury, proportionately speaking, than the capital area does.
DV reports that Vífill Karlsson believes there are too many national government offices in Reykjavík. By moving the parliament and its ministries to Akureyri, that town could be known as the seat of government, while Reykjavík would remain the country’s business capital. “Is it not desirable that [government and business] not be attending the same cocktail party?,” he asks rhetorically.
Vífill had previous done research which showed that proportionately speaking, people living in the countryside pay more into the treasury than they take out than people living in the capital area.
The research, conducted in 2005 and based on data from 2002, showed that taxes from outside the capital area support about 27% of the national budget, and countryside taxpayers only receive in turn 15% of their share in the form of government services.At the same time, while taxes from within the capital area comprise about 42% of the national budget, 75% of it is spent in the region.
The city of Reykjavík became the seat of financial and government power separately. The Danish lifted the trade monopoly on six Icelandic municipalities – Reykjavík being one of them – in 1786. The city’s harbour could accommodate larger cargo ships, and was already favoured by the Danish as a trading point, so finance flourished there. In 1845, parliament was re-established after being disbanded decades earlier, and its new location was set in Reykjavík.

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