How Finland plans to implement the first nation-wide basic income in the EU | Hacker News Reader

How Finland plans to implement the first nation-wide basic income in the EU

finlandpolitics.org

350 pointsimartin2k280 comments

I'm glad someone is trying it out. Hope they offer insight into what works what doesn't and any caveats. It may also be a bit early, as automation isn't in its stride yet.

Also, this is Finland a small, rich and homogenous country. Whether their model can be adapted to say Indonesia or the US or Japan is to be seen.

The main source of ideas was from Milton and the Nixon administration who with the economy going south looked for alternative means for people to "make" a living.

"...Friedman believed that it should be accompanied by an end to any minimal wage system and any other system of social protection. Friedman also believed it should be as low as possible and financed by a flat income tax"

So it'd be accompanied by a loss of minimum wage floor as well as it should be as low as possible (approx USD 1000/mo after initial trial phase in Finland.)

It's not a comfy lifestyle by any means, but could get people off the streets who otherwise would not have the means.

Given those parameters, with a few exceptions, I don't see this implementation undermining people's will and want to work and at the same time it has great upside in simplicity and affecting their poorest citizens positively.

>So it'd be accompanied by a loss of minimum wage floor as well as it should be as low as possible (approx USD 1000/mo after initial trial phase in Finland.)

To expand on this, removing the minimum wage is meant to make it easier for people to "get their foot in the door". The economic notion is that e.g. if X's labour is not worth more than $5 per hour, and the minimum wage is $10 per hour, then X will have great difficulty finding work (because the ultimate minimum wage isn't $10, it's $0). This means they'll have more trouble obtaining the work experience that would make them more productive. Removing the minimum wage means anyone can work who wants to, and the basic income protects them from the hardships that normally accompany low-wage jobs.

This is actually a really compelling argument that I hadn't heard before. Is there a good, short-ish reference on these arguments that you know of?

Here: https://www.reddit.com/r/basicincome/wiki/index

Basic income better aligns everyone's economic incentives, so it solves (in theory) a whole host of the problems we've got.

It's great to hear that some form of it is going to be tried.

It's a pity that the proponents there have to resort to including mathematical impossibilities on their list.... "A basic income, coupled with a flat tax, is capable of mimicking all aspects of our current progressive (bracketed) taxation scheme, but without brackets."

Basic income realigns people's incentives. It might be better than a really badly designed welfare system at removing "welfare traps", but it also can be expected to have a whole host of negative aspects in comparison to other possible configurations of the payment of government subsidies.

> host of negative aspects

Such as?

what are the "whole host of negative aspects"?

I will accept that there are almost certainly edge cases which I can't predict that will need ironing out. probably due to the administration of updating the list appropriately. but basic income seems very much like the proverbial silver bullet that never exists, so I am curious over its negative aspects.

in discussing with friends and family, the worst thing about basic income is it means paying people for doing nothing and that _really_ _really_ angers some people. even worse, it means even millionaires get basic income!

most of the whole host of negative impacts depend heavily on the level that it's set and what other benefits are withdrawn, which there's very little agreement over. Low end BI with aggressive removal of other means tested subsidies generally leaves poor people looking for work much poorer; high end BI is leaves most taxpayers much poorer, whilst potentially seeing , much of the increase to people on low incomes swallowed up in increased rent. But more generally:

- massive distortion of low-end wages, particularly for unpleasant, useful but not particularly revenue-generating jobs such as cleaning. Further outsourcing of manufacturing work for the same reason might be considered a negative aspect by some (especially people with moderate-to high skills related to that manufacturing)

- massive skewing of wage payments away from younger people in many competitive areas of employment, because now that the taxpayer will cover living costs and assuming removal of minimum wages there's absolutely no reason to pay trainees, apprentices (or the likes of runners desperate to make it in television) any non-trivial sum until they've spend a long time "proving their worth".

- regional cost-of-living differences and a guaranteed permanent income encourage former job-seekers to relocate to areas where their prospect of getting a job is minimal. This is further exacerbated if better-targeted housing benefit payments and social housing are removed from the equation.

- depending on the level of BI entitlement children get they're either likely to become a lucrative income source or unaffordable in many areas, especially for single parents.

- a surprising amount of BI revenue will be captured by low-end rents, and other costs that people with more cash to spend at the bottom of the pyramid can't avoid. A surprising amount of BI costs will be funded by the productive

- non-citizens are inevitably going to be heavily penalised (otherwise the country becomes an migrant magnet)

- many advocates use BI as an excuse to push for middle-class squeezing flattening of the tax system, withdrawal of education and health subsidies etc.

- the cost of paying people who would really rather not work almost certainly vastly exceeds the cost of paying wages to people whose job it is to kick people who would really rather not work off benefit programmes. Throw in the fact that people who never had any intention of claiming benefits are now entitled to them.

Like every other reform to the tax or benefit system there are a whole host of winners and losers (including people you probably don't want to be winners like "slum landlords" and the indolent, and people you probably don't want to be losers like the owners of the neighbourhood cleaning firm and hardworking immigrants). It's about as far from the proverbial silver bullet as imaginable: it's reforming existing incentives that have (for better or worse) been tested and debated for decades with a blunt instrument.

thanks for the detailed reply

I imagine any sensible, practical proposal for basic income would start it relatively low, keeping many current benefits and gradually expand it if it is successful. That seems to be the option Finland proposal will probably take. This will give time to assess the impact and allow corrections/adaptions/cancelling it . No doubt basic income is a blunt instrument, honestly I think that's part of its appeal to me. It seems fair compared to a plethora of well-meaning but convoluted network of social welfare initiatives, that we call a social welfare system.

I will consider you points more carefully.

- obviously a lot depends on the level of basic income. and what is sacrificed for it. I had not considered the politics of people using basic income as an excuse to withdraw education or health subsidies.

- effect on wages can be mitigated in the short term by retaining a (perhaps lower?) minimum wage.

- I agree a lot of basic income will be swallowed in rent. but that will be because that is what is important to people with the money to spend.

- cost-of-living differences will encourage job-seekers to relocate to cheaper areas. this seems like a good thing. if inner city companies can not find the workers it needs, it will either relocate or provide company buses or something. that seems a much better solution than keeping job-seekers where they are.

- non-citizens is a very good point I hadn't considered. But then, non-citizens are penalized by requiring visas etc. plus EU nations will be restricted on what they can do to stop EU citizens claiming.

thanks again.

> massive skewing of wage payments away from younger people in many competitive areas of employment, because now that the taxpayer will cover living costs and assuming removal of minimum wages there's absolutely no reason to pay trainees, apprentices (or the likes of runners desperate to make it in television) any non-trivial sum until they've spend a long time "proving their worth".

That really only applies in industries where people would do the work regardless of pay ("passion" based industries like film). And even then it only makes sense for capital intensive roles (e.g. it wouldn't apply to music, software, painting, comedy, etc).

For most industries, in the face of steady demand (for workers) and a drop in supply (of workers), compensation for trainees, apprentices, etc will increase.

> regional cost-of-living differences and a guaranteed permanent income encourage former job-seekers to relocate to areas where their prospect of getting a job is minimal.

Good. It stops companies from externalising their costs onto the most vulnerable in society.

For example at the moment most companies in my city are located in the middle of town. Companies are happy with this situation only because they can externalise most of the costs.

For example most of the offices in my city are ~1.5 hours travel away from the poorer areas of town. But its where the jobs are. This means a lot of low income wage workers have no choice but to spend ~3hours/day in unpaid travel time. That is hardly fair.

Introduce BI and what happens? Low income earners refuse to donate ~3hours/day unpaid labor to companies. Companies will either compensate the low income earners (great outcome!), move offices closer to the low income earners (great outcome!), decentralise (great outcome!), or be forced into more automation (great outcome!).

> massive distortion of low-end wages, particularly for unpleasant, useful but not particularly revenue-generating jobs such as cleaning.

Actually, what we have now is a distortion of the market. BI would simply cause a market correction.

> a surprising amount of BI revenue will be captured by low-end rents, and other costs that people with more cash to spend at the bottom of the pyramid can't avoid.

Probably not, because like you mentioned above, you actually significantly increase the supply of land and housing available because its no longer tied to jobs.

And if you only doubled the amount of vacant housing you would send the property market into "free-fall" - aka back to affordability.

It's one of the standard arguments against a minimum wage. What follows is that by implementing it, you inadvertently hit the early-entry work force the hardest (in the US that would typically be teenagers getting their first jobs). Apart from the general arguments against price floors and ceilings I think the other major argument against the minimum wage is that in the current systems (which a cynic could call lobby capitalism), minimum wage laws actually benefit "well connected incumbants" in low wage sectors who can use them to make market entry a lot harder for the competition. German minimum wage in the postage sector could probably serve as a decent example if memory serves me well.

There's a chapter on minimum wage in "Economics in One Lesson" that picks up the argument of the parent post.

I am living in Germany, the removal of the German minimum wage in the postage sector resulted in effectively more companies providing post service, but for the end user, the price has not changed at all. But you see a lot of people bringing the mail in nearly destroyed cars, with the look of miserable people. I am all for competition, but in this case, the net benefit for the end users is zero and it created extremely low pay jobs.

The competitors of Deutsche Post are now using special structures not to pay the minimum wage to people (they are contractors) and this pushes Deutsche Post to do the same.

So, for this case, it was not good. In fact, the people in Germany pushed to get a minimum wage for all employees and the right wing government accepted. It shows you how bad the lack of minimum wage was for the people.

The government accepted, but with a lot of loopholes for companies.

Exactly. We as a society really do not need businesses whose sole competitive advantage consists of paying lower wages than existing companies.

The same thing is happening in Belgium. Once the post (Bpost) was profitable our elected overlords began selling 49% their shares in it to something-i-dont-remember and... the danish post.

I read a lot of great essays/articles by Marshall Brain. They're interesting, and have some interesting ideas how to fund it. I like the study of minimum income a lot since it involves questioning so many assumptions about our economy.

http://marshallbrain.com/manna1.htm

A friend has been really trying to get me to read this ^ and I just can't finish it.

Our world and species is not so noble as to roll over and quietly take it like the author's many many assumptions suggest. Nor would we be above being so petty as to start global wars to take what's AustraliaCorp's.

If you can read German, here is a really great article from an UBI supporter arguing against minimum wage: https://www.grundeinkommen.de/05/07/2013/warum-ein-allgemein...

Another point of view is that the wage of the labor (eg. $5/hr) is a subjective amount coming from the negociation between the employer and the employee, and consequently their respective bargaining power. So, for some jobs, the real wage is not $10 or even $5/hr, it is effectively "the lowest amount law let an employer pay someone", due to the dramatically unbalanced negociation. In this view, minimum wages protect the poorest and most exploitable job seekers from having to accept whatever the employer with full bargaining power is willing to concede. Of course, not everyone subscribe to it and it comes with its own problems too, but it is still an important part of the debate, in my opinion.

It is only unbalanced as long as there is an oversupply of people seeking these jobs. With basic income there is a real chance that shitty jobs simply remain unfilled until they improve and people consider spending their life energy on it acceptable.

For its supporters, it's a strong point of basic income: people, especially unqualified, won't have to accept pretty much any job just to get a roof over their head and some food in their plate. So this gives back some power to say "no" to the worst jobs.

Opponents to basic income argue, among other things, that this is too much power and some workers would become exceedingly picky, without the fear of not being able to pay for rent and food. There definitely is a moral aspect to the question, with "anti-cheater" emotions/reactions.

> For its supporters, it's a strong point of basic income: people, especially unqualified, won't have to accept pretty much any job just to get a roof over their head and some food in their plate.

I think that's important, and not just for those people: that they don't have to accept a minimal (and likely dead-end) job to survive also means that those who would be inclined to are not prevented from taking steps that prepare them for a better and not-dead end job, that is more useful both to them and society.

Also note that, unlike welfare/EI/disability programs today, a basic income isn't regressive toward those who want to work. You don't suddenly lose your basic income when you take that $2/hr job, so there's no disincentive to taking it.

The disincentive should be perceived by everyone, but it's not.

If I accept a lower pay job, I'm doing my part on lowering the pay for that job in the collective bargaining between employer/employee. You might think it's not detrimental for you, but it's detrimental for everyone who competes for that job. And, as your argument is truthful, it will become a spiral: no disincentive in accepting the $2/hr job, then no disincentive in the $1.95/hr job, then ... for n iterations until there's no disincentive in doing it for free, for the experience or the kicks.

And, of course, in the end the benefit will go the usual beneficiaries.

> until there's no disincentive in doing it for free, for the experience or the kicks.

You say this like it's a bad thing. Study after study show that people perform their best creative work when it's decoupled from extrinsic reward.

If basic income covers all of your needs and allows you to do what you enjoy for the sheer pleasure of it, what's wrong with that?

Basic Income should be quite a bit higher then; enough for a fairly comfortable life with no serious financial worries. But then, sure, I'd work for just the fun, the pleasure and the kicks. I probably wouldn't be freelancing for banks, though. Some jobs will always require pay in order to entice people into taking those jobs.

> what's wrong with that?

What's wrong is a potential increase in income inequality and worst wealth distribution.

A corporation or somebody from a upper class will be getting richer from the work being done while the guy(s) doing the work with the basic income will stay at the same level. I don't think we should increase our inequality metrics even further.

There's nothing at all wrong with wealth inequality if those at the bottom are having all of their needs met.

That's a fundamental premise where we disagree. Particularly in a society where most wealth inequality is due to inherited wealth, inequality - for me - should be the primary target of politics.

Is most wealth inherited? I thought it was fairly established that after 3 generations a personal fortune is usually lost.

Most wealth inequality is due to inherited wealth. I don't know if the fact you stated is true, maybe it is, but it's not the opposite of what I said.

http://inequalitywatch.eu/spip.php?article95&lang=fr#nb2

http://www.brookings.edu/blogs/social-mobility-memos/posts/2...

From the linked source in the second link you provided, it states that between 35-45 of wealth is inherited. Not to be overly contentious, but that is not "most". Is your point that inherited wealth is the majority of the unfair, and socially aggravating wealth inequality that angers a large percentage of society? Because that certainly seems believable.

By the way, thanks for the interesting links.

You're right, and not overly contentious at all: I should've said it's the biggest factor, not the major one. I had in mind values I saw somewhere for the U.S. and my country (Portugal), both around 60%.

Is there potential evidence you could imagine that would change your mind about that premise? I agree with GP that inequality is fine if the basic needs of everyone are met, I also go further and agree with Paul Graham that inequality is a sign of a healthy economy (http://paulgraham.com/inequality.html). I also find nothing wrong with inherited wealth because I love my heirs and want them to have an easier life than I did, I want them to have some silver lining if I pass, I'm in this for more than just myself. I thought about it for a few minutes and one piece of evidence that might make me reconsider your side is if you could show rising inequality (in an environment with an absolute basic-needs-met floor or not) leads to falling access of the basics like food, shelter, knowledge, and useful technology like penicillin. That would be a potential downside to increased inequality that I would care about -- I don't particularly care about the potential downside of increased inequality leading to increased envy since you don't treat envy by giving in to it.

Who gets to decide what "basic needs" are? Oh, "in a democracy"! That's ok then.

But I agree with you on the whole. The serfs should just be grateful I'm not beating them.

> potential increase in income inequality

you deal with it with progressive taxation

I think that, fundamentally and strictly speaking, progressive taxation doesn't qualify as "dealing" with the problem. It's not a solution, it doesn't even attemp to solve it. It's just a quick bandage; an attempt to minimize.

And, empirically, you can see it. In my country (Portugal), with a supposedly agressive progressive taxation, inequality measures (Gini and Palma) are increasing. And the amount of luxury cars too. :)

you fail to cover more than 90% of the jobs that just need to be done, and require 0 or less creativity.

as an example - what I do to earn money, while enjoying it mildly as abstractly creative process (software development) is vastly different from what I do in my free time (mountaineering, travelling, general wilderness adventures). You cannot buy my vote on this with some basic 1000 USD income, if you tax high earners like hell on the other side.

One thing I saw consistently all around the globe - people need motivation to give their best and try hard, only few deliver without it for sheer pleasure. It doesn't have to be monetary one, but this one is universal and quite well oiled principle. BI doesn't offer me anything - I want to work, I don't have an issue finding next job, and if there is anything between, we have working social system that helps me. What does BI offer to somebody like me?

> I don't have an issue finding next job

...currently. Things change, and you may one day find you do have an issue finding your next job. As someone who has been in that situation in the past, relying on a "working social system", I would much rather have guaranteed basic income to fall back on (in addition to universal health care, which is even more urgently needed where I live).

It's still work though. People usually don't trade their free time for pennies an hour if they have an alternative. Basic income provides that alternative, nobody has to work. This will probably lead to a increase in wages for jobs that are no fun, like cleaning restrooms in a bar, and a decrease in wages for jobs that people actually want to do.

And just to hammer the point home: this is a good thing!

There's a flip side to your argument. If I'm doing a job for close to 0/hr then if the job becomes crap or my manager is abusive then there is nothing keeping me there.

This means that in the overall collective environment jobs that are undesirable (garbage collecting is the normal example) will actually pay more than something like being an political intern. But people could do both of these jobs and still have money for housing/food/etc.

>so there's no disincentive to taking it.

Only if you assume one's time is worthless.

>Also, this is Finland a small, rich and homogenous country.

There are an unknown amount of reasons that would determine the success of a program like basic income, so I'm wondering why the size and homogeneity of a country are always quickly brought up.

Probably because they're the most obvious of the factors that could impact such a program.

Oh, shit! How come I always miss the obvious things? What am I doing wrong?

I don't know why you're being downvoted.

You're questioning economical premises stated as obvious in a tech forum (so, where no special economical knowledge should be assumed). You're doing the right thing - why are they obvious? If he who stated them as obvious can't answer that with solid references, then it's not obvious; it's just an unfounded preconception.

> I don't know why you're being downvoted.

Didn't downvote, but personally, I really dislike sarcasm used in this manner. It's not so much questioning as flat-out contradicting. And it does that in a way which doesn't help to bridge the inferential gap.

I'm sorry, why is that obvious, even in the slightest?

because if you bring in an influx of color and foreign diversity, you get people who have less in common, less shared values and don't look out for each other. Get a massive influx of brown muslims in your white country, then find out that you no longer cooperate with each other like you did before. It's basically the way in the U.S. that the two party system also uses race and immigration to drive another wedge between citizens. Believe me, you want homogenity. It's better for progress than diversity. Everyone tells the story that diversity somehow is strength. Nope, never has been, it's a story that just feels good but isn't true. The U.S. progresses in spite of diversity and conflict, not because of it.

At least the whole world is gradually becoming democratic and capitalistic. That's one form of homogeneity, at least in expectations if not ethnicity.

I don't think I understand what you meant by "expectations," and I don't know if you meant this comment to be anything but an ideological thought, but this is what I know:

Capitalism runs off of inequality of all sorts. Capitalism's entire history is filled with instances of the ruling class systematically serving up xenophobic and racially divisive propaganda (in order to justify expanding imperially, in order to justify inexpensive labor, etc.), with no sign of slowing down. As such, I can find no evidence that cultural tranquility is possible under the global capitalism. The inequality that capitalism continues to deliver breeds dangerous ideological heterogeneity between the people of the working class.

It's my belief that equality shouldn't be the goal of capitalism, rather a fair representation of talent and productivity.

Someone hard-working with a 130 IQ versus someone depressed or maladjusted with a 90 IQ are, in fact, in entirely different classes. It isn't "dangerous" to admit that, it's simply reality. Capitalism does a decent job handling those extremes.

The dangerous ideological heterogeneity I was referring to: see Ferguson, EU vs. Greece, US vs. immigrants... Regardless:

> Someone hard-working with a 130 IQ versus someone depressed or maladjusted with a 90 IQ

Capitalism doesn't do a "decent job handling those extremes," it does a fantastic job creating those extremes. The latter person you mentioned is either highly exploited and/or rejected from society and given a tragic, humiliating life. Our capitalism is divisive, unjust, and destructive.

What creates those extremes is genetics and poor parenting (considering that IQ is ~80% hereditary,) and in some infrequent cases environmental pollution (heavy metals in the government supplied water.)

Capitalism just deals with the results, in this case human capital.

in what way does having a diverse population pose problems to basic income specifically? you are just stating a general problem.

basic income has no effect on diversity or homogeneity. perhaps it might encourage people to immigrate, but that's hardly a reason not to do it. having a country that is so desirable others would like to immigrate into it is a clear indication of doing something right. besides I think its obvious you would only qualify for basic income as a citizen.

The advantage of basic income is that it's fair to everyone. Prejudices and nepotism have no effect on it, leading to the fact that its dynamics will be driven by "pure" market forces.

At least I can't figure out a way to "screw the system" which by definition just gives everyone an equal amount of money.

Yes, that's why Australia and Canada are such disasters. In both of those countries immigrants, the children of immigrants and the grand-children of immigrants form the vast majority of the population of the country.

And in those countries, experience shows that the grand-children of immigrants have far more similar values, desires, opinions and habits as their peers than they do to contemporaries in the original home of their grandparents.

The average black family in the United States has been in the United States for longer than the average white family. That blacks and whites in the United States are not essentially homogeneous even though they mostly went to the same schools, participated in the same economy, spoke the same language and experienced the same media is purely an artifact of deliberate exclusion.

I've always thought the argument was purely political.

Any social program is easier to sell in an homogenous country because the opponents wouldn't have the "these people would benefit" argument.

Beyond that, I still fail to see how it would matter.

> homogenous country

please stop with this homogenous country bullshit. Finland like any other western country has a significant amount of other ethnicities, more than 10% in the case of Finland. And it's not like people are the same if they are of the same ethnicity.

And even if it were especially homogenous, how would that matter?

Are you a Finn? I am and would definitely call this homogenous coutry. But I know Finns who would never agree on that.

>more than 10% in the case of Finland

Half of those are Swedish.

No, you cannot compare Finland to other western or even Scandinavian countries. It's very different.

I'm pretty left-wing (I consider myself a libertarian socialist), but I agree with Friedman. Once you have a livable basic income, you don't really need a minimum wage and progressive taxation anymore. Those things exist primarily to guarantee livable conditions for the very poorest, but Basic Income would guarantee those livable conditions in a far more simple and effective way.

Two important effects of this would be:

a) the labour market would become a lot more open and free. At the moment, employers wield all the power because employees need a job. It's not a free market if you can't say no to a deal. With basic income, people can say no if the offer is too bad. But if your alternative is starvation, a terrible job for too little pay is still better than nothing. Minimum wage exists to limit the employers' power to exploit people who have no option to say no.

b) It fixes the unemployment trap. For people with unemployment or disability benefits, getting a low-pay part-time job often means they end up with less money (or the same money and more costs) despite them taking the effort to work, because they lose the benefits. This discourages people from working. With Basic Income, you keep that income if you get a job, so you always get ahead by working, even if it's only a little. There's nothing fraudulent anymore about doing little jobs while unemployed.

I'd probably prefer both the basic income and the tax to be a bit higher than Friedman would like them to be, but that's part of the standard political-economic give and take. As long as the Basic Income is at least enough for decent food and rent, I'm happy.

If you don't have progressive taxation any more, you're either going to be unable to pay for the BI or seriously hurt the middle classes. If the rich pay lower [net] taxes, someone else pays more (assuming you're not on the right hand side of a Laffer curve)

I agree, I don't see the logic in removing progressive taxation.

Progressive taxation is a recognition that there is a disproportionate benefit in living in an ordered and lawful society for those with high income (and assets, though we seem to have lost the plot on taxation of assets). You depend on the efforts of a lot of people, each of whom has benefitted from the state's education and infrastructure. Your products benefit from the state's legal support, your money from the state's stability, and so on. Progressive taxation is a recognition that those benefits don't scale linearly: those at the highest incomes benefit not only from the linear support of their wealth, but the exponential support of society.

Progressive taxation is also a recognition that wealth has declining marginal returns. $1000 in marginal income generates less utility for the billionaire than it does for the poor working single parent.

Progressive taxation is also a recognition that most of anybody's income is enabled by living in a modern, safe, resourceful, co-operative and free society. Without a modern society and without the benefit of all that have come before us, we'd all be subsistence farmers. Bill Gates may have been the most successful subsistence farmer ever, but that wouldn't have made him rich.

Taxation is not theft. Society enabled you to earn that money. In return, it wants a cut.

It's true that most of those who receive the money taken from you in taxes will not have 'earned' it either. Most of those that built the society that you're benefiting from are dead -- the scientists that enabled modern technology, the industrialists who built the economy, the soldiers and politicians who gave us our free society -- the most important work was done by those who came before us.

We are all their heirs.

>Society enabled you to earn that money. In return, it wants a cut.

The "cut" society received is the benefit it gained that made it pay the person enough to make them wealthy.

>Progressive taxation is also a recognition that most of anybody's income is enabled by living in a modern, safe, resourceful, co-operative and free society. Without a modern society and without the benefit of all that have come before us, we'd all be subsistence farmers.

Are the citizens of Singapore, with it's 20% top tax bracket, subsistence farmers? Are all the people in the countries listed at https://en.wikipedia.org/wiki/Flat_tax#Countries_that_have_f... subsistence farmers? There may be moral arguments for progressive taxation but they aren't economic ones; non-progressive taxation is perfectly capable of funding a modern society.

>It's true that most of those who receive the money taken from you in taxes will not have 'earned' it either. Most of those that built the society that you're benefiting from are dead -- the scientists that enabled modern technology, the industrialists who built the economy, the soldiers and politicians who gave us our free society -- the most important work was done by those who came before us.

These who came before us chose to do whatever they did. Someone being born didn't choose to be born, so it's not fair to suggest they have some kind of obligation to the previous generation. A contract to which one party did not consent is not a valid contract.

Given that Singapore is a medium-sized city providing financial services for an entire continent, it's probably not a model of fiscal sustainability the rest of the world can readily follow

And yes, virtually all the states on that list are significantly poorer and have drastically worse social services than Western Europe.

I didn't contract with the government to accept their jurisdiction over territory (though every tax I've ever paid has been due to a free and fair decision to do business and make purchases on their terms), but then I didn't contract with wealthy people to agree to their ownership of assets they claim rights to stop me using or charge me for using either...

Contrary to propertarian mythology, both the institutions of property and government are imposed by a mixture of force and the likelihood of society being substantially worse off if they didn't exist.

>And yes, virtually all the states on that list are significantly poorer and have drastically worse social services than Western Europe.

There's a big gap between "significantly poorer" and subsistence farmers. As in, an order of magnitude of GDP in many cases from that list (e.g. Russia).

>Contrary to propertarian mythology, both the institutions of property and government are imposed by a mixture of force and the likelihood of society being substantially worse off if they didn't exist.

The difference is that government necessarily involves force, due to requiring involuntary taxation (an entity funded by voluntary donations isn't generally considered a government, it's considered a charity), while it's possible for a group of people to agree to trade together and respect some notion of property (be it the strong capitalist notion of property or the weak anarchist notion of "possessions") without requiring force.

Russia certainly isn't a subsistence state, but I'd hesitate to call it a "modern society" too. It's also a petro-state that enjoys the luxury of deriving around a third of government revenues from oil and gas. Most of Western Europe has to make up that gap with additional taxes even before it starts to provide its citizens with more support.

You can have a perfectly harmonious society where everyone within it voluntarily respects each others' possessions, but you're still going to need force (or the implied threat of force) to prevent outsiders who aren't part of that particular social contract and don't particularly want to be from making use of that property. The possibility that someone might not voluntarily accept a social contract over the ownership of property is an existential threat to property rights which can only be resolved through [implied] force. Hence de jure and de facto the basis of all property and trade is the coercion that enforces its rules, whether that's by a government institution or a group of friends with big guns.

Not that I'm against progressive taxation, but I never understood how taxation not being theft tells us exactly how much Bill should pay. Theoretically if you have defined objectives you ought to wonder how much is the right amount getting you closest to these objectives. "We're all their heirs" could very well mean that Bill should give everyone in the world $10-20, so an equal share to everyone. This kind of thing does not work very well, however.

No libertarian beliefs that rich people do everything by themselfs without society. Bill Gates used a waste laber market, world trade system and much else.

I hope you agree with me that society does not equal government.

I do not beliefe taxation is theft, but your argument for taxes simple is not good either.

Your argument only makes sense if you assume that:

  government == society

Government is not the same as society, but in a functioning democracy, government should be the tool through which society organizes itself.

If government exists completely separate and independent of society, something is wrong.

Another assumption:

  our government == functioning democracy

Our government's apparent interests and the interests of the population are only loosely correlated in most instances and diametrically opposed to the interests of the population in way too many instances. Consider: copyright and other IP laws, the current voting systems, the power of lobbyists, congressional insider trading, military contract approval, etc.

Additionally, the large majority of society's interactions happen outside of any democratic vote. The whole goal of the Constitution was to narrowly white list the functions of government so that the Civil Society could be left to operate as it saw fit thus maximizing individual liberty.

In general, not maintaining a clean separate abstractions for government and society is like having classes that try to have too many unrelated behaviors. They lead to unneeded coupling of functions and an inability to reason cleanly about the whole system.

Not my assumption. Well, our government doesn't function too badly as a democracy, but the US government is a corrupt mess where voter interests are mostly ignored.

The thing is, the moment you abandon the option of using the government as the tool by which society organizes itself, you abandon democracy. I'm not sure where else you can go from there, other than accept that you're never going to be free.

Progressive taxation is just negative feedback for earning more.

Most taxes are percentage based. Let's assume tax level is 20%. - one earns $1000 he will give $200 in taxes, - one earns $10000 he will give $2000 in taxes.

Richer person already gives more to the society than the poor one, taxing the rich guy with higher taxes is just a way of making them guilty because they made it. Progressive taxation here in Europe actually hits the middle class the most, as most of them are already in the highest tax tier (I'm not talking about the ridiculous French 75%) and as soon as you reach this level you are suddenly hit by a big tax. It makes you wonder, what you did wrong?

"Richer person already gives more to the society than the poor one"

Richer person also received orders of magnitude more from society than the poor one.

"taxing the rich guy with higher taxes is just a way of making them guilty because they made it. "

It is not, at least to a sane person. If you're the type of person that believes that saying "Happy Holidays" is persecuting Christians, then you might think that.

"It makes you wonder, what you did wrong?"

No, it doesn't. Not at all.

In Netherland, you have to be well above average to hit the highest tax bracket, and even then, most of your income will fall in the lower brackets. To have most of your income in the highest bracket, you're well beyond middle class.

Don't know how it's at your end but where I'm from it's the middle class that pays for the taxes. I'm middle class and in the highest tax bracket.

Rich people have money. Making money using money is almost not taxed here. So they escape the taxes.

Part of the problem is that most middle class people don't have excellent accountants and tax attorneys. So they're an easy target. Whereas, if you're truly wealthy, you will optimise your taxes etc more. Most also don't mind going to court to challenge the government on certain bits of the law, if the risk/reward ratio makes sense.

If you are paying 40-50% in tax, they're probably only paying 15-20%

That's why I'm a big fan of VATs (with a displacing BI).

Yes, they are regressive. So are income taxes, the only difference is that people lie (even to themselves) about those.

I think VAT is great, if we can lower overall taxes. For example, I wouldn't mind seeing a high tax on luxury items. But a balance needs to be found within existing tax systems. In general, we shouldn't tax investments and labour as much. Those both create value. If I'm actively investing and getting great returns, I'm helping the economy.

Personally I'm quite a big fan of the Estonian tax system. You pay tax once you take money out of the company (i.e. when you want to spend it)

Woah, Estonia has a Land Value Tax! Baller! Reading about it briefly, I like the simplicity of it. I guess that's what you get when you can start relatively fresh like Estonia did (see also their e-citizenship and e-government efforts).

Where are you from?

If you have flat income tax and BI, the net result is much the same as progressive tax and no BI.

Consider a BI of 100 with flat tax of 45%, and people with before-tax paychecks of 300 and 1000. First guy ends up with 265, second guy with 650. These exactly correspond to BI-less tax rates of 12% and 35% respectively. Second guy's taxes can pay for both their BI and then some. Their paid taxes total 485, just short of 5 BIs worth.

That assumption is probably wrong.

Progressive income tax is no longer a very relevant factor for financing BI, or anything, in Finland. The main purpose of progressive tax in Finland is no longer about collecting revenue; it is about punishing those who are doing too well. That is very apparent from the public discourse.

So yes, Finland is likely somewhere on the right hand side of Laffer curve, particularly for high earners. (For low earners, many countries are; that's where BI system might help).

Your location on Laffer curve is of course hard to prove because the world is such a volatile place -- you cannot experiment with different tax rates and see what happens, because all the other factors impacting revenue are changing all the time so no trial will produce consistent results.

But Finnish income tax progression is just about the tightest in the world. The highest decile (anyone earning more than €50k a year, gross) pays about 43 % of income tax revenue [0]. However, that revenue pales beside revenue from consumption taxes (VAT, which is now 25%, and fuel taxes, and vehicle taxes).

The country's tax revenue is higher than ever, but it is not enough when government spending goes up even faster. Public deficit is about 3.3 % of GDP [1]. Whatever we do with taxes is not going to fix that hole. Some control on the money-flow out will be needed.

Finland also does not spend as much as you would expect on health, schools, military, infrastructure, public security and just about anything you normally think of as the government's role. There is one major thing where Finland spends comparatively more than other developed nations: transfers.

The motto of government seems to be "if it moves, tax it; when it eventually stops moving, subsidize it".

And many people who are about to make a lot of money (e.g. sell the company they've grown) will run to Sweden as a tax refugee. Think about that. Run to Sweden as a tax refugee.

[0] http://tilastokeskus.fi/tup/suoluk/suoluk_tulot.html [1] http://www.findikaattori.fi/fi/44

Consumptions taxes hit poorer people much harder than rich people. A top rate of 43% isn't that high. The top rate in the UK is higher. Granted it kicks in higher but it's still set at 45%.

That's not the top rate. The top rate is a bit over 60 % of gross amount.

43 % is the proportion of tax revenue paid by the top decile. (10 % of taxpayers pays 43 % of revenue.)

The difference being that you don't pay income tax when you sell a business, you pay capital gains. Those are usually taxed at a significant lower rate (or not at all, depending on the country)

For wealthy people, income tax doesn't matter as much as capital gains

Exactly. Competition keeps capital gains taxes reasonable, but that doesn't apply to earned income tax.

CGT is a mildly progressive 30-33 % here. If the government were trying to get 60 % which is my marginal tax rate for earned income, their revenue would likely plummet because there would not be much sense in showing capital gains in this country. Anyone selling a business etc would move to that great tax haven, Sweden, for the year when they sell.

For us workers, the best tax planning option is to switch earnings to non-taxable form like working for ourselves.

E.g. if I want to have a new garden shed, I don't pay someone to build it. I take unpaid leave from work and build it myself. This way, the tax office pays most of my garden shed. This country has probably the most expensive carpenters you can think of...

Indeed. Income earners usually can't escape the income tax. Capitalists very easily can. Or they at least can defer it indefinitely and live off of investment gains (for example, by using holding and investment vehicles)

At the end of the day, it's simple math. Live in country X, pay 33% when sold. Live in country Y, pay 15% when sold. Live in country Z, pay nothing. When we're talking about millions in tax, Monaco/Belgium/Malta/the UK do become very attractive very fast. After all, you can always return a few years later and live like a king.

if running away from this country, why not to say Netherland, Malta, Monaco, Suisse etc. where taxes are not so ridiculous? Is there some bilat agreement for choosing Sweden, already ridiculous place tax-wise?

Sweden is slightly less ridiculous, particularly for the very richest. And it is culturally and geographically close - in case you want to visit that aunt, and want to set up a company, and whatever. The way society, legislation etc. operates in Sweden is familiar. (Some laws passed by the Swedish king in 1734 were valid legislation in Finland until replaced quite recently, 1996.)

But of course people are running elsewhere as well. Recently there has been fuss about wealthy pensioners moving to Portugal where they pay no tax.

If you see Basic Income as a negative tax, it turns a flat tax rate into a smooth progressive curve.

Let's suppose a BI of $1000/month and a 50% flat tax.

Someone without a job gets $1000/month.

Someone with a $1000/month job pays $500, gets $1000, ends up with $1500/month.

Someone with a $2000/month job pays $1000, gets $1000, ends up with $2000/month, paying effectively no taxes.

Someone with a $4000/month job pays $2000, gets $1000, ends up with $3000/month, paying effectively 25% taxes.

Someone with a $10000/month job pays $5000, gets $1000, ends up with $6000/month, paying effectively 40% taxes.

Note that I'm not opposed to keeping progressive taxation on top of the BI. I just think it's not really necessary anymore, and it could be used to convince conservatives to give this a try.

Progressive tax means that the marginal rate increases with income, so, no, BI plus flat tax isn't (even viewing BI as negative tax) a smooth progressive curve, its still just a flat marginal rate.

If BI is also excluded from taxable income in an otherwise "flat" scheme, it's effectively a two-tier progressive tax system (many proposed "flat" taxes without BI also follow this model), with a zero % bracket and one other bracket; still not a smooth progressive curve. A smooth progressive curve is when marginal (not total) tax rate is a continuous, monotonically increasing function of income (probably asymptotically approaching done limit.)

In this example, the marginal rate is indeed flat, but the result on the total income is absolutely progressive, and asymptotically approaches a limit (50%, in the case of my example).

It's absolutely worth comparing this to some progressive tax systems without BI (though that's a lot more work because those systems are a lot more complex), but I suspect BI will do reasonable well in that comparison.

My understanding is that "progressive tax" is more typically defined as a rising average tax rate, which would make "BI plus flat tax" represent a set of smooth progressive curves.

It's very much worth noting, though, that there are plenty of progressive curves - including those currently in use by many jurisdictions - that have no close approximation in that set. And in particular, if what you want is an increasing marginal tax rate, it does not do that.

Not really, the US has a nominally 'progressive' tax rate and there are several bumps when various subsides expire where the marginal rate is much higher than the top tax rate.

EX: The interest on student loans are only tax deductible under a specific income. So, if you pay 2.5k in student loan interest your effective marginal tax rate increases by ~16% from 65k to 80k. The top tax braket in the US is 39.6 which is less than the 25% marginal tax rate from 65k - 80k + 16% (25+16 = 41). On top of that the top marginal tax rate does not include Social Security or Medicare income taxes, but deductions don't apply to SS or Medicare taxes.

> Not really, the US has a nominally 'progressive' tax rate and there are several bumps when various subsides expire where the marginal rate is much higher than the top tax rate.

I'm not sure what the "not really" refers to. Its true that the US system is only progressive if you look at nominal income tax rates, ignore the different treatment of different sources of income, ignore the main tax on income paid by most working people (payroll tax), and ignore, well, lots of other things.

That's kind of irrelevant to the point I was making, which had nothing to do with the status quo US income tax system.

> So, if you pay 2.5k in student loan interest your effective marginal tax rate increases by ~16% from 65k to 80k.

Actually, that's wrong, because deductions are not credits. If you got a credit for 100% of student loan interest paid that phased out over the $65k to $80k range, that would be an effective ~16.7% additional tax over that range with $2.5k of interest paid. But its a deduction (which means it reduces your taxable income), so with the marginal rate in that range of 25%, it only increases tax liability by $625, which is a ~4.2% increase in effective tax rate. (Which still breaks progressivity, since the effective marginal rate of 29.2% is slightly greater than the next bracket of 28%, buts its not greater than the top bracket of 39.6%.)

> deductions are not credits

Good catch, I read "You can reduce your income subject to tax by up to $2,500." as "You can reduce your income tax by up to $2,500."

Thanks.

Thats assuming you get your money from income tax. Thats the wrong assumption. The whole premise is that there will be less and less jobs until there are almost none left. So you need to find other means to pay for it whether thats by giving every employee a share in the automated workforce, taxing money that sit idle and so on.

You will always need progressive taxation because it's "baling out the boat" since money when left alone flows towards the rich. It needs to be constantly clawed back to minimize inequality (which may be more important than absolute income amount). That's assuming you aren't gonna make big changes like phasing out money.

Luckily the scenario of "employers wield all the power" you describe is so far from reality as to be irrelevant. In theory, employees need a job but they don't need this job. Turning it down is and taking a different job is always an option - that's why virtually no jobs actually pay the minimum wage.

You are somewhat right, however - a BI will give people the ability to turn down all jobs. E.g., in the last BI experiment, work effort was reduced by 13% - more than double the effect of the great recession.

A much better solution is the Basic Job. You get a Basic Income (which pays less than any job in the market economy) but you need to work for it. You spend a lot less money (anyone working in the market economy doesn't get paid by the basic job), you have minimal disincentive for getting a job, and you get some productive output (e.g. parks have less trash).

> that's why virtually no jobs actually pay the minimum wage.

What? Most jobs pay less that minimum wage.

> E.g., in the last BI experiment, work effort was reduced by 13% - more than double the effect of the great recession.

Because 13% didn't feel like being slaves anymore.

> A much better solution is the Basic Job.

That's slavery.

Less than 1% of people in the US earn minimum wage.

http://www.bls.gov/opub/reports/cps/characteristics-of-minim...

I'm going to ignore your blatant misuse of the term "slave".

3.9% of people paid hourly wages earn at or less than minimum wage from that link.

Your figure of 0.9% is for people over 25 who earn exactly minimum wage (1.6% in that line earn less than it)

Edit: Also, if you're not paid hourly (i.e. flat salary), you'll not be included in those tables. So if you're salaried at minimum wage, but work unpaid hours (which seems to be common in the US), you're earning less than the minimum wage, but not "Officially".

There are 3 million Americans earning minimum wage or below / 318 million Americans = 0.94%.

You can change the denominator if you like, that doesn't change the substance. Regardless, 0.94% or 3.9% is far less than "most" (which is what mrottenkolbar claimed).

True, but you do need to change the denominator though, as under 16's and retired people don't earn, so those ~105 million people[0] need to be excluded (otherwise it's mis-representing the facts).

[0] http://www.wolframalpha.com/input/?i=age+histogram+of+the+US...

I said "1% of people" which is correct. You could also say "1.4% of working age people" or "3.9% of hourly wage workers" - these are correct too.

The only incorrect statement anyone has made is "most".

>>Turning it down is and taking a different job is always an option

That's simply not true. There are plenty of regions (many rural places) where the inhabitants have one option of where they can work due to a small number of employers and the individual's skill-set.

Yeah, we should really do something about this ban on internal migration. It's quite unfair that a person born in a rural area requires a difficult to acquire internal visa to shift to a location with better work opportunities.

Meanwhile, outside of China...

But like, how are you supposed to move when you have no car, no job, no computer, are 20 miles from the nearest city with things like libraries in it, and use up enough a fraction of your parents' monthly income (or whatever other source that lets you physically live day-to-day) such that they don't have much in savings to loan you?

As 'successful' people we can see many ways out of these arbitrary situations, even if you tie our hands behind our backs with something like "and no plan that involves your current professional skills like acquiring any old computer and doing software dev". We can also execute on our plans. For us, being poor is a choice, many of us started out that way to begin with and chose to do better than our parents. For a lot of others, it's really a lack of capability in not only seeing ways out but also precisely following instructions someone else gave them to get out. As the saying goes, you can lead a horse to fresh water... All the opportunities in the world are useless to you if you don't have the capacity to see them or execute on them.

So... move?

Are you going to pay their moving bills? Are you going to guarantee them a job when they get there? If not, then quit acting like it's the solution.

And that's why I moved from the rural area I grew in to the city, even though I would have preferred to stay there.

> " that's why virtually no jobs actually pay the minimum wage."

This may be true in some parts of the world but here in the UK the minimum wage has become a standard wage for all kinds of jobs.

This is because we have a tax credit system designed to make up the difference. What's happened over time is employers are gaming the system by offering jobs on minimum wage and the minimum number of hours required for the tax credits to kick in.

Often the hours offered result in someone working part time but on hours, such as 10 - 3, that make it impossible to get another part time job.

Employers that used to pay overtime now employ extra workers instead. So we have a country where unemployment is relatively low but where a lot of people don't have any disposable income.

Efforts by the current Government to address this problem are , predictably, meeting a lot of resistance.

This seems like an excellent system - you are getting productive output from more people than we do. This sort of contradicts the impression I have of the UK, namely council flats full of people who haven't worked in years. (Admittedly, I lived in the UK less than a year and don't know the stats.)

In the US most of our poor folks don't work - do you have stats showing differently in the UK? I'm very curious now.

I find it very difficult to describe that as an "excellent" system...

A GOOD system is the one which helps hard workers to lift themselves from being poor in any meaningful way (less bureaucracy, more help with kids, less taxes, more subsidies etc.) rather than one that prevents an easy improvement. What OP described ain't that good, unless your primary goal is to have nice low stats for unemployment.

This is true. Someone in a low paid job used to be able to work overtime (often at a premium) or get a second job.

The current system disincentives old fashioned hard work as any extra money earned equates to a drop in benefits received.

According to the ONS (May 2015) the 'employment rate' was 73.5%

However, the 'unemployment rate' was 5.5%

http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/m...

http://www.bbc.co.uk/news/10604117

* A person is classed as unemployed if not only out of work, but also actively looking for work and available to start work within a fortnight.

* The unemployment figure is higher than the claimant count as many job seekers do not or cannot claim JSA (Job Seekers Allowance)

Keep in mind that the other ~27% of people who are not "employed" also includes retired persons, students, stay at home parents, disabled people who are not able to work, in addition to people who have just given up on job seeking.

> that's why virtually no jobs actually pay the minimum wage.

I thought this statement might be due to the crazy-low federal minimum wage in the USA, so I looked at statistics here in NZ where the minimum wage is closer to reasonable (although still only 75% of the living wage [1]). 2.4% of people in employment earn minimum wage [2], and 39% earn less than the living wage for their main job [3] (about the same if you look at total income). All statistics and values I've collected are for 2013.

[1] http://www.livingwage.org.nz/about [2] http://employment.govt.nz/er/pay/backgroundpapers/2013/mwr-2... [3] https://d3n8a8pro7vhmx.cloudfront.net/nzlivingwage/pages/129...

Theoretically that may be right. But the goal isn't just to make the math work. Its also to make the most good for the most people. And as automation proceeds, making fake jobs for people is not helping them. You'd have one guy spreading trash, and another picking it up.

Once automation actually replaces all the jobs lets rethink things. At that point a BI will be so cheap to provide that few people will have any objection. (Similarly, a 1900-level BI is already very easy to provide.)

We aren't close to that point yet.

What is unemployment at right now? If we're not there with automation, we're headed there like a freight train.

Meanwhile people without jobs are suffering. Lets fix that right now, with a BI.

Unemployment is currently 5.5%, i.e. it's a solved problem. If it goes significantly lower the fed will need to raise rates to slow things down.

We can also fix the problem of people without jobs by giving people jobs.

"Luckily the scenario of "employers wield all the power" you describe is so far from reality as to be irrelevant. In theory, employees need a job but they don't need this job. Turning it down is and taking a different job is always an option - that's why virtually no jobs actually pay the minimum wage."

Yeah, you've clearly not been going outside the past 5 years.

It is a nice idea, but it does not work at least not in EU.

It is also a nice idea for personal freedom, but not for the benefit of the society.

Minimum wage is a way much better thing.

For a) The EU has the property, that any citizen has the freedom to choose freely his work place and to choose freely his living place. People are using it and this is good for one and bad for others.

For example here in Germany, we have many people from Poland, Hungary, and other such countries working in jobs for cheap, at least cheaper than a German works for. Jobs are like health care system, construction work, butcher, and even in Amazon Fulfillment centers and alike. For them it is still a lot of money, because their and their families living place are their home countries. It is way cheaper to live in those countries than here in Germany. (I think the same is true for the Netherlands, Belgium and others.) So those people live here in Germany for cheap, because they consume here in Germany few to none services and goods. They bring their goods from their home countries with them. So that they can save money for the family support at home. That leads to the situation, that the money is removed from the circulation within Germany. Little to few services consumed means, no jobs for others, means also no taxes for the country.

That is not changed with BI. It is even more, local people (or people who decided to have their living place in that country) will benefit from BI and decide not to work for that low income. That is not a problem for the companies, because we have lots of those other people, who will work for that money, which will not qualified for BI. So basically, with BI you will introduce an even lower class/society.

Versus with required minimum wage the country, the society can set that to a level, which supports to live in that country. So that people are willing to work for that income. That means, that the money will no be removed from the country by people from abroad. The money will be used within the country to consume services and goods and as such will support other jobs as well. That will lead to an healthy economy.

For b) BI is not for people with disabilities. Do you really think, that people with disabilities should have the same amount of money? People with disabilities have way higher costs of living. They need special support in terms of (medical) device, re-fitted living space, re-fitted mobility requirements, and much more. So that people with disabilities have an equal quality of living, they need more support. But all ideas, I have seen so far, consider also the budget dedicated to people with disabilities as budgets to be usable for BI. That is like a kick in the ass to the people with disabilities.

In a common labour market like the EU, the sensible thing would be to introduce Basic Income in the entire EU. Having completely different economic systems in a union that lets people cherry pick their favourite element from each country, is not going to work. That has nothing to with BI, and everything with needing some degree of homogeneity in a system like that.

The mismatch between forced homogeneity in some areas (like currency) and not in others (fiscal policy) is what contributed to the Greek debt crisis.

For people with disabilities, you can add an additional income on top to reflect their additional costs. And as far as I'm concerned, if they do manage to get a job, even temporarily, they keep the extra income.

I used to know a buy who was seriously spastic. Easily 100% disabled. Nobody would ever expect him to work. But inside that spastic, uncontrollable body, he was actually very smart and good with computers, and he got a job as programmer with an employer willing to accommodate for him. Then the department he worked got downsized, and all his coworkers got unemployment, but he didn't, because he was disabled. So he registered for regular disability pay, but didn't get it because that was for people who got disabled during their working life, and his was a birth condition. There was a separate kind of disability pay for that, which he also didn't quality for, because that's for people who couldn't work at all, and he'd clearly worked.

With BI, that wouldn't have been a problem.

Erm, aren't you contradicting yourself? With minimum wage , it either has to be high enough that local workers are interested, people come and bring their own goods, so money gets removed.But that also happens with the higher minimum wages, since it is even more attractive. Just more competition. And if the minimum wage gets to low, you still have the "problem" of guest workers. Without a minimum wage, but with basic income, companies can now lower the wages such that they no longer are attractivene to people living here and only to the guest workers. However, they are also free to lower them to almost match the guest workers home country, if their primary form of labour comes from their. So the companies benefit, the country with BI benefit from increased consumption, social stability and more people taking risks like entrepreneurship and extended education and the only ones shafted are the guest workers. Which still sucks, from a solidarity point of view.

You probably need progressive tax system to fund a basic income; they aren't alternatives to eachother. Sure, if you can afford a sufficient BI, you can probably do without the minimum wage, though.

Everyone in this thread is writing as though this has never been tried before.

It has been tried at least five times (three in USA and twice in Canada). The results have been re-analysed in recent years and show that the reduction in peoples willingness to work is very slight.

Of course if Finland does it over the whole country then this will be a much larger experiment than the US and Canadian ones.

I think that there are good reasons to believe that it will have a very positive effect. It also gives greater bargaining power to the lowest paid so that it should help to prevent the reduction in wages that is becoming a feature of the low end of the employment market.

Could you link to the analysis you mentioned?

This search string

canadian basic income experiment statistical analysis repeated

on Google got me a lot of hits including these that refer To Dr. Evelyn Forget's analysis in 2009:

http://www.huffingtonpost.ca/2014/12/23/mincome-in-dauphin-m...

https://en.wikipedia.org/wiki/MINCOME

The reduction in work effort is 13% - double the effect of the great recession.

http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf

It also gives greater bargaining power to the lowest paid so that it should help to prevent the reduction in wages that is becoming a feature of the low end of the employment market.

If supply of labor is significantly reduced then prices for labor will rise. Didn't you just claim that won't happen?

You keep throwing out this 13% as if it is a bad thing, with no comment on the context mentioned in your link. So I'll add it here for others to view if they don't want to wade through a pdf to find it:

1: The 13% decrease in work effort is per family unit. This is an important distinction, because it led to the following 3 points

2: The primary wage earner in the unit reduced their effort only slightly, but this had a large result due to them making the majority of the cash

3: The secondary wage earner, who was usually the spouse reduced their work effort to stay at home longer after having a baby, and to do more work around the house.

4: The tertiary wage earner, in most cases an adolescent male, had theIr work effort reduced by the fact that it entered the workforce later. This may have been due to them continuing their education.

So I think - IMHO - the 13% reduction represent a net benefit for society - dad doesn't have to do so much overtime, mum can spend more time with her baby, and your kids stay in school longer and become qualified for better jobs...

And as a result we get less productive output, making us all poorer.

If you want to argue that making us poorer, but having more leisure is a good thing, go ahead. But don't claim the effect is "slight" unless you also consider the great recession to be "slight".

"And as a result we get less productive output, making us all poorer."

This is not necessarily the case. "Work effort" is not fungible. In the case of tertiary workers, a highschool drop-out working now is probably giving us less productive output over time than had they finished their education.

Are you really jumping to that conclusion from a single number? Not only that, are you saying that reduced work effort leads to reduced productive output?

If I follow your logic, and what the study showed, if I start working at 16, but you go to university, and get a masters degree so do not the start work until you're 25, I have put in more work effort, and you are now making us all poorer.

> It's not a comfy lifestyle by any means, but could get people off the streets who otherwise would not have the means.

It's not like there is a large problem in Finland with people living on the streets. Rent is subsidized up to 80% if you are unemployed or without income. Unemployment benefits and/or social assistance cover the remaining 20%. If you become homeless, you will be provided with temporary housing.

Any homeless problems are usually due to larger underlying personal issues. Some people, such as alcoholics and junkies, will not or cannot adhere to basic living rules and will rather choose to be, or forced to be, depending on how you look at it, homeless.

Besides, for a bit of morbid humor, homelessness is a self limiting problem in Finland due to winter.

Without income you can get rent support up to 80%, but there is also an absolute upper limit which is much lower than the rent in large towns like Helsinki. So you can't just rent a 1000 € apartment and expect to get 800 € from social security -- the reality is around half of that.

Any homeless problems are usually due to larger underlying personal issues.

Is that claim supported by any facts?

From litterally the first Google result:

"Long-term homelessness is a case of prolonged or repeated homelessness , which is often associated with poverty, in addition to severe psycho- social problems such as substance abuse and mental health problems , crime and violence . This group is estimated to comprise about 40-50 percent of all homeless people living alone."

http://www.asuntoensin.fi/asunto_ensin/asunnottomuus

BI is just a huge subsidy for employers. Competition in the labour market will absolutely crush salaries if everyone gets a basic income irrespective of whether employed or not.

Now given that income taxes > (or even >>) corporation and dividend taxes even if those reduced wages translate directly into increased corporate profits the net tax take by government will fall, whilst their liability goes up from BI obligations.

All BI will do is enrich the business elite and drive further inequality.

A semi test case of BI is being inadvertently conducted in the UK with tax credits. Thanks to effectively subsidised wages by the state, wages have remained stagnant or fallen. As wages have fallen more people qualify for tax credits, further subsidizing wages in a negative feedback loop. Net result: the cost to the state has ballooned to 30bn/year from an originally projected 2bn/year with over 50% of working households now in receipt of them, coupled with ever increasing equality gap.

Far from harmonising wealth and reducing inequality, basic income will have exactly the opposite effect.

> Thanks to effectively subsidised wages by the state, wages have remained stagnant or fallen.

What's the evidence for this?

It makes perfect sense. Each person has an income need, X. If they get B basic income, employer only needs to pay X - B whereas without basic income he needs to pay X.

That's a poor implementation of basic income. If each person has a need X then B should be set at X. That way if they work for someone everything on top isn't for need but want. Gives them the ability to choose more.

Agreed, look at it this way - most people don't earn minimum, but more. They will still work to keep their standards (paying rents, mortgages, cars, kids, lifestyle they are used to etc.). Employers are not dumb, they will reflect this immediately.

A healthy society should always motivate people to WORK and produce products/services, that's what keeps society running. If main goal of BI is to remove that motivation, I fail to see it as a step in right direction.

If B < X then B is not a basic income. It's like you said, an salary subsidy.

If B >= X then employees can walk away from any job for any reason. It inverts the labor market. Instead of employees competing for jobs, employers compete for labor. Portions of tech industry exhibit this inversion. Saleries, benefits, working conditions are off the charts compared to say Walmart line workers or Amazon pickers.

You seem to be missing the fact that no one needs to work anny more. Why should you work a shitty job for shitty pay, if you don't need the money?

You seem to be missing the fact that there are other people from other EU countries who will still work and need to work for that shitty job with that shitty pay.

>It may also be a bit early, as automation isn't in its stride yet.

I'm curious as to how you would judge whether or not automation is efficient enough to do this?

Buckminster Fuller, former president of the Mensa society, argued that we passed that invisible line back in the 1970's:

>In technology's "invisible" world, inventors continually increase the quantity and quality of performed work per each volume or pound of material, erg of energy, and unit of worker and "overhead" time invested in each given increment of attained functional performance. This complex process we call progressive ephemeralization. In 1970, the sum total of increases in overall technological know-how and their comprehensive integration took humanity across the epochal but invisible threshold into a state of technically realizable and economically feasible universal success for all humanity

-Buckminster Fuller, Grunch of Giants, 1982

Interesting to read another YC article from top page - http://www.theguardian.com/us-news/2015/nov/12/beattyville-k...

Some opinions there describe welfare as evil thing, removing any motivation for people to even try to get a better life. maybe not applicable for Finland, but interesting nevertheless as coming for 1st-world country (although they describe themselves as 3rd-world one).

Let's not forget that for every hard-working individual there is X slackers looking how to get as much out of system with as little effort as possible, by any means necessary. I fail to see how BI would motivate those people to get better, and contribute to our society.

Hopefully in this case, road to hell isn't paved with good intentions as usually...

People doing regular work have to do physical labour, cognitive labour, emotional labour. People getting welfare or charity generally still have to, at minimum, do emotional labour, looking suitably pitiful before the handout and then suitably grateful after. And often physical and cognitive labour as well, filling in forms, schlepping to mandatory signing-on, etc. This is why welfare is demotivating. People reasonably feel they have already done the work, they as feel drained as if they were in a job. They know that if they don't do the things, the welfare vanishes.

Whether it's a job or welfare, everyone in our current system is scrabbling. And so everyone is stuck in a scarcity mindset.

Basic income is different. There is no scrabbling needed, not even emotional work, it just arrives. And so I expect that will flip people from a scarcity mindset to a leisure mindset. They won't be slacking, because slacking is a way of scrabbling. They'll want to do something, although without the need for a day job any more, that might be more towards the creative side. Some will "retire" on BI and write their novel or go back to university. Others will want to work to make more than the BI.

Expect a period of labour shortage, manufacturing turning to robots in reaction, a surge of cultural product such as has never been seen, and mass education with a broadening of the scope of people's interest into "blue sky" non employable fields.

It would straight up fund criminals in the US. Kinda like welfare currently does. (mostly drug dealers)

> Also, this is Finland a small, rich and homogenous country. Whether their model can be adapted [Japan] is to be seen.

Isn't Japan also a homogenous, small, rich country? Seems like an excellent place to try this, to me.

The only explanation I can think of is that you meant "small" as in their population, not geography.

Basic income idea always resambles me a lot Lex Frumentaria introduced in ancient Rome by Gaius Gracchus. The idea was exactly the same - give people "basic income", that is alomost free grain. Was Gracchus successful? Not really, he died in a rather miserable way.

In addition Rome was weakened by that law. First of all even if budget could not afford free grain, there was no way to put end to that law (Rome was a democracy, croud wanted free grain). The other unwanted effect was migration of people from villages to the city (hey, there is free food there, so what's the point working hard).

I encourage every supporter of basic income to learn more about that Roman law and how it affected Rome.

When we start giving money we need to think about a number of issues:

1. Someone needs to earn these money, someone will have to be taxed and that someone will not be happy. Rich people tend to know how to avoid taxes. So it may turn out that in a few years it will be hard to provide money for basic income, unless a given country has sufficient natural resources to finance basic income.

2. How basic income will affect inflation (if it is going to increase it, it may happen that basic income becomes worthless shortly)

3. How basic income will affect democracy - I can imagine a party which main program point will be "increase basic income" (Gaius Gracchus was outbid by his competitors) - a croud might vote for a random wacko without thinking about further consequences.

4. And, at the and, as there is a question if basic income is ethical. We take money from X to give that to Y, this does not sound good when we think about things like ownership, justice - obviously that depends on ethical system one prefers.

If it turn out that basic income caused economical problems in a given country (higher inflation, high taxes, capital escape, budget deficit) then who will have to pay for that failed experiment?

It may happen that potential beneficiaries of free income (economically weaker, poorer people) will have to pay for it much more then they got.

Bravo. In the long run the people most harmed by the full implementation of these schemes will be the underclass they purport to aid.

The people that are supposed to pay for all of this are by definition the people who are clever enough and powerful enough to figure out how to avoid paying for it. Raise taxes enough on those juicy Silicon Valley salaries and you'll see large tech companies decreasing salaries while compensating with corporate housing, transportation, and stock that is taxed at a lower rate. The money simply won't be there, not in the amounts needed or anticipated.

Unfortunately I don't think this is going to work as long as there are any other benefits paid on an "individual basis", eg some cultures here get extra money for their traditional dresses paid for by social security! And if you have kids and have spent all your "basic income" then you will still get new strollers (top of the line) etc for your babies, or cellphones for yor self and your family, with paid plans. Or your electric and internet bills paid. The left will never agree to ditch these subsidies.

And the biggest issue is that housing is also paid for spearately under this plan (as per the article). Nowadays the situation living in helsinki center is that only rich and unemployed people can afford to live there. You know, "close to where the work is!".

They should pay you a lump sum and you would live where you wanted using only that money. Too bad if you can't afford the most expensive place to stay where "the work" (=pubs and bars) are.

In more remote places (but still cities) you can have a studio appartment for probably 200 euros per month.

They could tweak it so you get your basic income, if you forgo other forms of subsidies (as Milton orig. proposed). Also, Russians can't just cross the border and become eligible as it appears it's citizens only. And I wouldn't begrudge Laplanders, life up there is austere.

If they choose this, then "rational" unemployed would move to the outskirts and rent cheaper properties till they could afford more expensive apartments (via new jobs). Hope they can keep it free of interference so it can be gauged for success or failure.

>citizens only

No it's not. Currently all wellfare in Finland is based permanent residence. But if you don't have permanent residence, the social services will get you one if you just are in Finland "permanently". Which happens if you can claim that you have no other safe place to go. Or if you have family here. Or if you have no other citizenship.

Russians can't come over the border right now. But if there is ever a civil war in Russia, then we are fucked. If Russia starts to move Syrian refugees through russia just to fuck with us, we are in deep shit.

Some people are really worried about immigration. While it's not a problem right now. Some people are really worried that we are not perceived as fascist. Some people are really worried about refugees who are here. Nobody gives a fuck about Syrians in Syria.

Getting citizenship means you have to do military service, but you gain nothing from it. Currently it is punishment really.

That's a lot of assumptions and scaremongering that have nothing to do with the article.

Could you explain me what there is assumtions? And what there is scaremongering?

"if there is ever a civil war in Russia", "If Russia starts to move Syrian refugees ..." and "Nobody gives a fuck about Syrians in Syria" are assumptions.

Scaremongering: the process of saying or doing something in order to deliberately make people feel worried or frightened [http://www.macmillandictionary.com/dictionary/british/scarem...]

I assumed that I was talking to international crowd. Who don't really care too deeply about Finland, but would appreciate perspective. I really didn't think anybody would be scared, save maybe other Finns.

I started those two sentences with the word "if", making no judgement on how likely they are. Do you suggest that in HN it's not cool to gauge options and speculate?

"Nobody gives a fuck about Syrians in Syria" This is admittedly my personal perception. The only article in finnish so far that actually suggests political action to help Syrians in Syria, that I have read was also written by me.

I have a hunch that you are too a Finn. And that you read between lines bit too much.

> That's a lot of assumptions and scaremongering that have nothing to do with the article.

I beg to differ. In Norway we are getting lots of "refugees" which has been safely in non-warring European countries[1], seeking asylum here, simply because its a known thing we have higher "wages" for asylum-seekers than other European countries.

It may be cold hearted, and it may not be a popular opinion, but my take on it is that these people stopped being genuine refugees 4000kilometers ago. They are now welfare-shoppers. I honestly don't see how anyone can argue anything else.

We're getting a flood of people right now, and the result is that our asylum institution can't scale to handle them all.

All historical data suggests that they will all be non-working, non-integrated people, living on government benefits for years to come, and for those who manage to become a productive part of society, they will still be less productive than regular citizens, for a multitude of reasons. Historical data also says most of them wont return, but still will have the same rights to government provided benefits, pensions, etc. Nothing personal, nothing racist, but they will be a net loss for the national economy.

All these things accounts to a massive increase in government welfare-related obligations, costs and spending. Now and in the future. Our "future budget" is already too big to handle, accounting just our regular citizens. With this flood we're facing future bankruptcy.

To avoid that means taking away future pensions. It means we stop maintaining infrastructure like roads now. It means cutting costs all over. The costs are very real.

And now Finnish people may fear that such an offer like this will land them in the same situation: That they too will become a "too sexy" target for welfare-shopping ex-refugees. It's not fearmongering. It's a very realistic scenario. I can't say I would blame them for thinking that way.

[1] http://imgur.com/YDegTCn

Finland already has high rate of refugees compared to Estonia or France(?). I don't think UBI changes that picture at all, as the refugees already get any money citizens would.

At very least the perverce incentive of wellfare to non-citizens should be acknowledged. But that's not politically correct at the moment.

I don't think it's good for the refugees themselves either in the long run. Their children could have been doctors, lawyers and engineers in Syria, Egypt of Turkey in 2050. Now they are destined to be third class citizens in cold and dark north.

careful, there are some hard facts (or more like hard-to-argue financial projections unless never-before-seen miracle happens), but they tend to go against common socialist sense here on HN.

I mean, I think I understand them. They are very clever, see what is wrong with this world (and there is plenty), and aim for biggest obvious culprit (be it 1% topic, evil corporations etc.) and say "if we fixed this, all will be good from now on". Well, life, economies or markets don't behave like that. People are aholes, lazy, selfish, greedy, messed up, not caring about anything but themselves.

I like solutions to problems just like the next guy, but only those who factor these basic built-in human flaws, so they can work long-term outside the paper they are written on. All other are just a hidden additional financial (and other) cost to all of us.

I'm gong by the article which states: "as indicated by Kela’s Research Department Director Olli Kangas. It is considered that all Finnish citizens would be paid an untaxed benefit sum free of charge by the government, 800 euros"

So, not sure if that would change in implementation.

With regard to perceived fascism nations typically act in self interest. This is why they go to war. Neither China nor Russia typically much care about what anyone else thinks, whether it's human rights orgs, etc. Actually, most places don't care. It's mostly Europeans who are afraid to look nationalist. You really don't experience doubt of identity in most other countries.

Now, I get it that one day we will have to transcend the idea of nations and embrace global globalization and beyond internationalism, but we're just not there yet. Maybe another couple of hundred years.

My impression is that this "permanent recidence" stuff is justified with Finnish constitution.

It states that everyone how can't earn enough money to live on it, has right to wellfare. This "everyone" is basis for recidence based wellfare. How it's not basis for enormous levels of development aid beats me.

Which cities have you seen those 200 €/month apartments in? When I was studying in Joensuu (a city of ~75k), a 25-30 m^2 apartment there cost around 500-550 €/month (unless you're lucky enough to get one of few student apartments from the city). I'm a bit skeptical that you can get a (non-subsidized) place for 200 € in a city, and having to have a car will bring the cost up anyway if you move to the country (good luck finding work without having to commute to the city).

Well ok a bit on the low side, but it is possible (especially if you share the appartment).

http://www.vuokraovi.com/vuokra-asunto/kankaanpaa/keskusta/k...

Why do you have to commute? Take the bus to the interview, it's not like you have to commute every day to the city centre to find a job.

And further, I believe the high rent prises are in large part because of the subsidies. If people actually would pay just what they (themself) can afford then the prices would be lower.

I don't see how this can possibly work.

I'm reasonably well paid, and pay a lot of tax. I can save quite a bit. I could afford to live for 5 years from my savings without working. But not forever, so I still work.

But if someone was to give me 800 euro a month then I could live of my saving for maybe 20 years instead. Certainly long enough to get to retirement....

So why would I work? I wouldn't. So not only would this cost 800 euro a month directly but also the 4000 euro a month in taxes I would have paid.

It doesn't take many people to do the obvious thing...

Why don't you take a part time job at flipping burgers or at bartending? I've no idea what you do but I'm assuming there are plenty of part-time, low wage jobs you could take right now that are less stressful than whatever you do now and, because they're part-time, would give you a lot more free time.

Why don't you do that? They'd pay enough for you to be able to live off your savings until retirement age, by your account.

Most people don't pay 4000 euros a month in taxes and can't live for 5 years from their savings.

Your personal situation is far from representative and can't be used to assess the usefulness of universal basic income.

4000 euros is a lot; most people who make enough to pay that have had their tax advisor 'restructure' things so they pay less. If you are paying that after restructure I would think you can save enough to add 3 years per year (you might have to live slightly more frugal than you do now).

People don't work just for money. The idea is to free people up so that they can use their natural human creativity to grow as individuals.

Not everyone works for money. In fact most people I personally know (no, I'm not sure that's a good representation) don't. What is quite common though among large groups of people is that they get extremely bored and lonely without their jobs. It is frightening to talk with people and find out that they would have nothing at all to do if they would not have their jobs; their hobbies (if they have them) don't give them enough satisfaction to do them longer than a few hours a week.

I don't have to work but I find myself working more as I enjoy it even though I have hobbies to keep me busy.

most people around me work exactly for money. even when they like their job (ie I do), there are roughly 1 gazillion other activities that are just better, and life is too short. also, if you have children, you want to spend as much time with them as possible, there is no upper limit on that.

You would think that, but most people who retire early get really board in around 6-12 months.

Often your friends are working so they just don't have a lot of time to have fun on week days. TV is much worse in the middle of the day. Sure, it seems like adding 40 hours a week of free time would not change much, but it often feels like 4x as much free time due to all the unnecessary activity's around work that suck up time.

Finally, many things are fun while your tired at the end of the day / week to unwind, but get boring when your wide awake and full of energy.

I have had 5 people die shortly after retiring (early); stress (was this all?), depression (suicide) and general boredom which leads to depression. I do not think you realise how much time you really have on your hands when you are not in the ratrace and how few people deal with that well.

I'm sure it wouldn't take long to find someone willing to work for that salary so you wouldn't pay income tax but someone else would (and that someone else would also take another step on the social mobility ladder, etc). If you were to quit, you would have some money invested, you would continue helping the economy by buying things, and someone else would take your job and eventually be better off. Sounds like a win-win for the society/economy.

I think both of you are wrong -- he wouldn't quit his well paying job just because he got a basic income of 800 euros, BUT, SHOULD he quit, it would not be so easy to replace him. Sure there would be people willing to work for that salary, but would they be able to? If he would be so easily replaceable, would he still earn a high salary?

We are not talking about Cristiano Ronaldo here. This person does seem to have a very good salary but it doesn't mean he isn't replaceable. About it being easy, I'd say it depends on a lot of different things but based on his salary, I would say there are more people qualified for those tasks.

If that's what you actually want to do, why don't you negotiate with your employer to work 1 day a week for 1,600 euros a month? You'd have twice what this basic income pays and you'd have 80% of the free time you want. That has to be a good deal, right.

The fact is, there are very few people in your position, and fewer still who'd give up their considerable income in order to not work. Very few of us work just to live; we all want more than that. The number of high earners who'd quit their jobs is minimal. However... The number of low earners who'd quit is much bigger. That's the problem that society will need to deal with - the cost of things like retail and domestic services like cleaning will go up considerably because people won't do the work unless it pays relatively well.

not entirely, market will find its way around in long run, ie immigration (legal or illegal), illegal employment etc. all net loss for state.

people want to pay as little as possible to get as much as possible, that's natural to all of us.

people want to pay as little as possible to get as much as possible, that's natural to all of us.

I'm not sure about that. There are plenty of businesses that do very well selling less at a higher price - there is perceived value in buying an ethical, artisan or luxury good. Perhaps people wouldn't mind paying a bit more if it meant society was better off if they could actually afford to. The notion of doing things for the "maximum possible happiness", even if it means you're worse off yourself, isn't new. Jeremy Bentham was writing about "felicific calculus" more than 200 years ago - https://en.wikipedia.org/wiki/Felicific_calculus

>So why would I work? I wouldn't

But most people would. It's not that I buy into the "people don't just work for money". I could be creative, do interesting things and meet people without a job.

What I do believe is that most people are greedy and lust for stuff. Most people want a new car, a bigger house, a bigger TV and a new phone every year.

Basic income would cover my needs and your needs. For most people it won't be enough to get the level of comfort and luxury they want.

I'm glad someone tries it but remain very skeptical.

If you take the proposed eventual 800 Euro and assume every single citizen will get it (roughly 5.5 million in Finland) that would be 52.8 billion Euro/year. For comparison the net domestic product of Finland is 216.9 billion (bad indicator but one i could find with a quick search)

I think if you do this, every citizen should get the base income and only income above it and corporate income should be taxed. Currently the average income in Finland is about 3.1k/month. So on average that's 2300 Euro taxable income (once again grossly simplifying). You'd need to tax that at roughly 35% to refinance the base income. Not sure if the corporate taxes and hiking the 35% to say 50% (+savings on all the stuff that is now covered by the 800 like unemployment, retirement) can make up for all the other costs (infrastructure, education, health care, police, military etc.)

There's also the standard questions of "why not ask for more" and "what will people do with the free time, why should they work". Which are the interesting questions that an experiment could help answer.

Remember that basic income displaces payouts from other social programs. How much do social welfare and unemployment programs pay out in Finland?

Also remember that, although everyone theoretically gets an equal slice of a basic-income pie, there's nothing stopping a government from making taxes more progressive to claw back the wealth transfer from anyone who was living comfortably on their own income and didn't really need the help.

I wonder about non-payout social programs, especially those aimed at children, like Head Start or SNAP (food stamps) in the USA. Will basic income enable recipients to make more efficient choices? Or will recipients squander it, diverting money away from nutrition and child development?

Now you've got me imagining children receiving their own basic incomes, with the government getting to decide how some proportion (30%? 100%?) of their monthly allocation gets spent, and the parents getting handed the rest.

Something interesting with basic income is that it erases the traditional "income flow" that makes it make sense for parents to have one bank account that they own, and pay for all family members out of it. Under basic income, I could see each family member defaulting to having their own bank account to receive deposits.

You could go way more wild in the "enforcing spending on childen" with that setup than anything food stamps do. You could require that e.g. the government gets to audit the expenses on all "child" accounts to ensure they're for the child; and additionally require that parents only buy things "for" their children by first transferring money from their own account to the child's, and only then spend what is now the child's money on the item.

Such an audit scheme would introduce huge bureaucracy and cost immense amounts of money. It also opens the door for all kinds of corruption. Who decides which things are ok to spend money on "for children"? Lobbyists?

Without audits you also get corruption. Some parents are quite willing to pick their children's pockets.

It's far from clear why you want to give our most vulnerable people absolutely no protection from the corrupt. We could also save money by abolishing the SEC, FINRA, and the EPA - do you also favor this?

If everyone in the country gets the income, children have a government ran bank account which the money pays into (possibly with interest?) until they reach 18, then they move the money into a normal account of their choosing.

That way they have a sizeable amount of cash to start their adult lives with (Uni, buying a house, starting a business, travelling the world, etc).

That doesn't make sense. The children's basic income is really meant for their living costs.

If you don't trust their parents with this amount of money, perhaps you should take away the children from them altogether...

> Under basic income, I could see each family member defaulting to having their own bank account to receive deposits.

This is in fact already very common in Finland. As a rule, each family member indeed has their own bank account.

Each parent also typically manages their own money and then common costs like housing and car maintenance are agreed upon; sometimes this leads to habits that are perceived as totally weird by foreigners. E.g. parents splitting up the bill after an extended family dinner at a restaurant, and rent splitting agreements where a complex formula is used for deciding what is the fair share of each parent as their incomes are not the same.

Children's benefits are paid to accounts assigned by parents (typically they go to the mother but some families are able to save them for a nest egg which the child gets to keep when turning 18).

There is already an unconditional child benefit (approximately 95 € for one child, the per child amount increases so that for five children it is altogether 665 € per month.) However, this is under constant attack because "rich people don't need it".

There is no child deduction whatsoever in taxation.

The "enforcing spending on children" is generally implemented by having a daycare system at low cost to parents.

> How much do social welfare and unemployment programs pay out in Finland?

Minimum of 485,50€ and 705€ per month respectively. So 800€ isn't much more than any unemployed would get anyway. If you have any previous employment then your unemployment benefits will be (much) higher.

> Remember that basic income displaces payouts from other social programs.

That's the marketing speech, but in reality, I doubt it.

There is a very large sector of government and GONGO employees who will argue how for each of them, the particular payout they are handling is very important and the basic income should not displace that particular system, or the sky will fall on all of us.

I don't believe the basic income system will displace the housing support, for instance. Same applies to many other kinds of social assistance. The trade unions will howl about the unemployment funds that they control but are financially maintained through taxes. Etc.

And there's a lot stopping a government making taxes more progressive. For instance, the fact that revenues might actually decrease. Finland is already having a very very high tax wedge.

One might assume that marginal taxes at the higher end of the spectrum will go up to compensate?

The average income will also rise, people who make 3.1k/month now will make 3.9k.

Probably not. Either companies will pay workers less, or the government will tax people more (so yes, they would have higher gross salary, but around the same net salary).

Basic income doesn't create more money, it's just a more efficient and simpler social security net.

You need to subtract underage people (~1 million) from that 5.5 million (as well as non-citizens ~200k). I think some ~1.5 million people will also pay enough taxes to offset their own basic income (assuming the taxes will be set so that the average worker ends up with the same amount of money as they do now).

I'm not sure if Wikipedias numbers[1] are accurate, but they claim that social security already cost 57 billion in 2011 (of course not all of that would be replaced with the basic income).

[1]: https://fi.wikipedia.org/wiki/Sosiaaliturva#Sosiaaliturvan_t...

We can consider the effects this will have on the wages and national competitiveness though. E.g. if you subtract 800 out of that €2300 average income, it translates to much lower payroll figures for the employers. It also puts Finland in very competitive position, compared to e.g. Germany or even Eastern Europe.

A few points that I thought would be worth making here. I read through all the comments a little while ago and was surprised no one was pointing these out. Maybe they're too obvious, but I think worth the space since many comments seem to contradict these:

1) I think you can't just consider the implications of how people will behave as employees once they're earning a Basic Income. How employers will simply take advantage of the system and force people to work for less. If anything I think it will put more pressure on businesses to make sure they're paying enough, otherwise they won't have the manpower to grow their business. Then there's the argument about automation. There will be only a few companies who can do automation to compete in this new economy. If anything I think it's worth mentioning that not only will it make it easier for large corporations to attempt to take advantage of people, but I think it will make it far easier for regular citizens to become employers. For example, I think people will be far more willing to accept terms that pay only equity in a company than they would be today.

2) With regard to "what will people do with all of their spare time". I think perhaps the dystopian future many people imagine will happen for a few weeks where people celebrate, get drunk and party all day because they don't have to work. Eventually I imagine that life will catch up to most people. They'll have hobbies, they'll start businesses, they'll contribute to non-profit efforts. And one of the most important I think, they'll have the time to engage with their government to ensure it remains loyal to its citizens and not to special interests.

NOTE: And to clarify I think these points are made with regard to a "Basic Income" and not a "Minimum Guaranteed Income". Basic Income IMO is the far superior choice. Minimum Guaranteed Income seems to give all the benefit to the large corporations and little to no benefit to the average citizen besides guarantee that they'll remain out of poverty for their entire life.

We can hope they find hobbies, instead idle minds tend to destructive habits. Let alone all those idle people are ripe for exploitation by political groups and the like.

The hard part with a BI is finding incentive for many to do more than the minimum required to survive. We might be creating that dystopian future simply by defining through law the minimum required to keep people from rising up. In other words, we create a permanent lower class whom we keep just happy enough they don't take out stuff.

I think BI is an interesting idea but the dangers are too high unless you find something for people to do. Don't wait for them to find it, most never will try. BI needs to come with some public service at the minimum if not employed

Here's one thing I don't understand: isn't this just going to inflate prices?

If I have an apartment for rent, and now I know everybody is getting, unconditionally, a $ 800 paycheck, what keeps me from raising the price by the same amount? The people who do work will still be able to pay my price, and there'll be demand for it.

In most Western European countries rent is tightly controlled so it's not possible for landlords to make big increases overnight.

Ok: what keeps me from raising prices, period?

Also, rent was just one example. In the long run it seems inflation will just go up unless there's heavy regulation of the market, at least on basic goods and services (housing, food, clothing, etc).

Nothing keeps you from raising prices. However, just because people have more money does not mean competition will stop. In fact competition might increase and prices go down, as there is more money to be made and risks/costs go down.

Is it? As far as I've understood, rent control is quite rare in Western Europe nowadays, and at least Finland doesn't have any.

no it isn't, and where it is just causes havoc, ie you cannot beat market forces of many well-earning people wanting to live close to work with some law

If your income goes up 800€ and your taxes go up 800€ then your disposable income does not increase.

For those near the poverty line who will pay less than 800€ in new taxes still need to eat, so they cannot pay 800€ more in rent.

An aspect greatly overlooked in this discussion here is, that an UBI would rid us from a ton of bullshit jobs people are currently forced to do, just to get by. So in a way, an UBI can lead to degrowth eventually, which decreases pollution, traffic jams, energy consumption, waste a.s.o.

I'm looking forward to see what people are going to do with the spare time.

As a Finn, my primary concern is whether or not basic income will just inflate rents.

Why would they? Would people in general be "earning" more money from basic income than current benefits? I mean you can't increase rent past the point people are able to pay.

> I mean you can't increase rent past the point people are able to pay.

You can increase them past the point that people on lower wages/basic income can pay, driving them out of desirable or semi desirable areas to cheaper areas. See London as an example.

Yeah but that already happens with the current system; the worst case scenario is that nothing changes and people on lower wages keep being pushed out from more desirable areas.

But I don't see why you need to live in London? You might like it and want to live there, but then you need the money to be able to.

Like I could move to Helsinki if I wanted to on my current salary, but I see no reason to do so. I live in smaller city (or maybe it's even considered a town) and I have plenty of extra money left over after my rent.

I don't need to nor, personally, want to. However, the people already there have a right to be there, especially those born in London, who grew up there, who have families, jobs, community involvement etc.

It would probably drive some up and some down. People who have very little money have no bargaining power so they must pay what the landlord demands even for substandard accommodation. Such accommodation would probably go down in price if a basic income were instituted at a reasonable level (high enough for a reasonable life rather than just enough to avoid starvation) because people would be able to afford something a little better. This of course would drive the price of the bottom end of the good accommodation up. But the equilibrium would probably be at a point that was more comfortable for the tenants and landlords would have to work harder to attract them.

You can put limits on rent increases through many means. For example limiting the increases per year, and limiting increases to when the landlord actually improves the building (with concent of the occupants). You can put taxes on landlords, you can ban things like AirBNB. You can make many areas nice to live in. You can construct affordable housing. You can make it almost impossible for landlords to evict tenants. There's lots of other ways that are used too.

I think you will probably see lower rents, when they remove the housing benefits. At least if housing benefits are implemented the same way as in Sweden. When I was a student, the state payed for the part of the rent that was between €300-€450. So when I chose which apartment I wanted, I obviously chose the more expensive one, since I had no incentive to do otherwise. The people to owned the student apartments eventually caught on, and raised the price of all student apartments to around €440. (not the exact numbers, just to illustrate the point)

I can't really take an article seriously when it refers to Milton Friedman as a Libertarian. He's most certainly not. He was a leading Chicago school adherent.

https://www.youtube.com/watch?v=QmeeMYrnweg

Words in English are frequently polysemic. There are well established philosophical, "left" and "right" meanings to "libertarian" which seem to have evolved in that order. https://en.wikipedia.org/wiki/Libertarianism#Etymology

Friedman is clearly closest to the last camp and even self-identified with it. https://en.wikipedia.org/wiki/Milton_Friedman#Libertarianism...

Obviously for an article pitched at a general audience, rather than an academic one, some people won't know Friedman so it's not unreasonable to expect them to clarify. I presume that's why they added the following lines immediately after calling him a "libertarian economist".

"Friedman believed that it should be accompanied by an end to any minimal wage system and any other system of social protection. Friedman also believed it should be as low as possible and financed by a flat income tax (which means that the tax would be universal and at the same rate for all). So in reality, what Friedman was pushing for was a system which would provide employers with people ready to work for lower salaries at no additional cost to employers."

I can't see how any reasonable person could read that and then claim the article was putting Friedman in the wrong camp or being misleading or inaccurate regarding that point.

It's worth noting that the word "libertarian" can have a lot of different meanings, including some pretty extreme ones in the US.

A lot of people discuss UBI from two angels.

Either "people will mostly work but it's a better way to secure those who do not or cannot" Or "a lot of people become lazy and don't want to work, why would they when they get money for just sitting on their hands"

However thats the wrong perspective for this.

UBI is a potential solution IF you believe that most jobs will be gone which also means that most taxation schemes like income tax will be gone to. If you are still thinking about this as a solution to getting jobs back or there aren't enough people to pay for it then it's already a dead discussion.

So the key premise for this discussion is not whether it will solve our job problems or whether people will be lazy and not pay income tax. The key premise is that the productivity gains and price decreases by automation is used as some of the leverage for society to build a self sustained ecosystem for humans to live in. Where technology is a kind of photosynthesis that allow for the distribution of goods and wealth even though everyone mostly ended up working with producing said good.

> "a lot of people become lazy and don't want to work, why would they when they get money for just sitting on their hands"

Every person in Australia over 22 and under retirement age can get extremely generous welfare, forever. It doesn't matter if you've never had a job, etc. etc.

A single person gets $1046/mo

With children is $1200/mo

http://www.humanservices.gov.au/customer/services/centrelink...

Are Australians sitting around on their hands? Some are, sure, but the vast majority don't want to live the life that ~$1k/mo buys.

It's not my claims I was talking about what a lot of people say when it comes to this discussion.

Yep, I was backing you up.

I think the only way for basic income to work is a very clear definition of what is and is not luxury. I think a lot of the issues with minimum wage and welfare debates stem from different people having different definitions of what should be paid for by those services.

We see this with the minimum wage debate -- everyone's definition of a "living wage" is different. Does basic mean house, car etc in a nice area or does it mean that if you're not working you can afford to live only where the cost of living is low? I think this needs to be really clearly laid out so down the line the intention of the money is clear.

If it's clearly laid out ahead of time, then in the US situation for example, someone complaining that they cannot afford an apartment in an expensive area without working is not evidence for a need to raise the basic income, it's evidence they need to move or find a (better) job.

It may sound weird, but this is not that big problem in Finland. We don't have too much that sort of arguments. Our politics is lot more consensus/compromise based than U.S. politics. This means people disagreeing in quantity can be sorted out. But the big parties can veto this stuff for no apparent reason what so ever.

Our left is more communist than U.S. left. Some of them don't give a shit what is "living wage". They think government should give them all excess money possible. And if there is no excess, then take loan to support some arbitrary standard of living for everybody. "You don't have to pay debt" "tax the rich more".

But people don't really believe them. Most Finns still think that "average Finn is somewhat sensible person". The whole multiparty system can exist, because we mostly agree on stuff. It's just the details that are different. When I go to vote, I don't think "how to save the country from the evil Kokoomus". I think what party could nudge the system to better direction.

Being cohesive small nation state is cosy. But the hivemind can be scary at times. Currently police is trying to pass internet surveilance legistlation and it's not much protested. Because "average Finn is somewhat sensible, they would not do this if they didn't really have to".

A living wage is also strongly dependent upon family makeup. Two childless individuals can survive on far less per adult than a single parent with three children.

So for starters, do the BI scale per individual, and if so, how? Assuming it scales flatly, it gives an incentives to have children because of economies of scale (this is not to say people will have dozens of children, as this is a single incentive among many, many of which are incentives to not have children).

What are the schools of thought regarding inflation? It seems to me that any mass handout would quickly raise the cost of living and nullify any benefit.

Finnish social security already pays out handout that is comparable to proposed basic income. If basic income is implemented, poor people don't get significantly more and the basic income is taxed away from those who are wealthier.

The benefit from basic income in Finland is reduced bureaucracy and welfare trap removal https://en.wikipedia.org/wiki/Welfare_trap It's beneficial to work even low wage job part time when your wage is not reducing your basic income.

Why would it raise the cost of living? This measure does nothing to increase wages, it has tendency to do the exact opposite in fact, as per described in the article.

Why does it seem that way to you?

"Cost of living" in basics like rent and food is what people buy anyway. How is having a basic income going to change that, unless you had like a huge homeless/starving population that can suddenly now get homes/food?

I admit that I don't know that much about basic income but had assumed that everyone would be "better off" by the same amount. Others in the thread have kindly informed me that is not the case, and that taxation will take out the benefit for higher earners.

I must say that doesn't sound very "universal" to me.

Even if we give $30,000 to EVERYONE, the poor will be more better off than the rich because $15,000 to $30,000 is a much bigger jump than $400,000 to $415,000. But the price of basics is not going to change that much because everyone buys them already.

The "universal" part is that this is a universal floor on living standards that applies to everyone.

It will raise the price of staples because people don't need to be frugal about those things anymore.

What on earth makes you say that? If I buy one bag of rice a week, I'm not going to just randomly start buying 2 bags if I get more money. I'd rather buy some spices.

People will be frugal because they'll want to spend money on other things. Imagine a poor person as a person just like you: he has wants outside of basic survival.

People who cannot afford rice will start buying rice instead of noodles. And yes, they will probably buy spices also. Both are staples which could see a price increase.

I don't see how there would be a price increase. Regardless, we can subsidize it to keep cost down. Problem solved.

I would like to point out that several EU countries have minimal basic income. It translates as 'minimal liveable income' and is paid to people who have no other income. It is about 60 euro/month in Czech republic. In Germany it is about 300 euro/month, but can easily go up to 1000 euro/month with all extras.

Problem is that one has to prove he does not have any other income. That could be problem for some people, for example illegal foreigners. Or divorced fathers who have income on paper, but everything gets confiscated for alimony.

> ... and is paid to people who have no other income

So, are we talking about unemployment benefits? Because one of the things a guaranteed / universal basic income aims to do is eliminate the so called "welfare cliffs".

An example of a welfare cliff would be: let's say you can get 300 euro / month being unemployed, or 310 euro / month working 60 hours a week. Does it make sense to get the job? With a UBI scheme, you'd get the basic salary, and you'd go do the job as well, kind of a win-win. Of course the overall picture is much more complex than that, but that's the idea.

Wouldn't it just make the money worth less? Right now every one starts at $0, after the change everyone will start at e.g. $1000, so you just move the axis, at some point prices in stores will increase because people have more money and this will eventually lead to the point where $1000 is worth almost the same as $0 where we started.

I realized this a long time ago about the problem with poverty: zero times anything is still zero. So no, $1000 will never be the same as $0. Yes, the system will adjust via inflation, but not to $0. In fact, a proper BI would act as a kind-of self-correcting cornerstone for the rest of the economy.

To some degree, I'm sure - it may indeed have secondary effects like lowering of the average salary, or increasing of average prices, etc. But I don't think it can get to the point that you're specifying, simply because prices will always be determined in a way to maximise profits, as opposed to simple price fixing.

But other, potentially larger secondary effects is that overall productivity and efficiency of the economy should increase, driving prices lower. Essentially, what we're talking about is that people below a certain threshold are not free enough to pursue paths which would give them the most benefit in the long run. E.g. they cannot enroll in a university, or whatever, because they are living day to day. By giving financial independence to everyone, you are giving them the freedom to achieve these long term goals. It'd also give more people the freedom to get into the startup scene, and I think HN agrees that innovation is an overall net win.

Also, clearly the money has to come from somewhere in the short term, and this would likely be a form of taxation which would come from richer people and companies, and it'd redistribute this wealth to the poorer ones. It can be argued that the current (and seemingly near future) distribution of wealth is rather one sided, and things would be better if wealth was distributed more evenly. Of course, that wealth would be re-injected into the economy rather rapidly, so arguably little would be lost.

I would like to point out that several EU countries have minimal basic income

Sort of, but that different from the unconditional income for all adults, which is what the article is about. For one there's what you mention yourself, but afaik there are also countries where you have to be able to prove you are actively looking for work/follwoing courses/... in order to continue to receive it. (btw one reason unconditional income might in the end be cheaper for a country lies in getting rid of the administration to deal with all these rules and execptions).

Apart from that there are the social aspects, here's one: I know enough people who tend to look down on others who are not working and receiving that income. That might fade away if both groups get the same income, as the offenders will quickly realise they would be looking down on themselves.

Basic income is typically called "Bedingungsloses Grundeinkommen" (unconditional basic income) in Germany, to indicate the difference between what we already have and what BI aims for.

The social security tier you seem to refer to (Arbeitslosengeld II, ALG II, also known as Hartz IV) has all kinds of conditions, eg. personal wealth above a certain value needs to be used first; significant others need to chip in first (and for people younger than 25 also their parents, and if you live in a flat share agreement, overzealous officials may try to exploit that fact); there's a cooperation requirement on seeking jobs (and the officers in charge to deal with that can mess with you in plenty ways).

The "father who has income on paper" (and presumably a job) scenario is the smallest problem, by the way. Alimony is capped at a living income (which happens to be defined as "enough to not receive social security benefits").

But it seems to me that the system is not very efficient to get people back into jobs, even though that's its basic premise: Continuing to receive ALG II can be a full-time job in itself.

The "promise" of unconditional basic income is discussed somewhere else on the page: you get the money, now you're free to live with that somehow or find a job on your own terms. It gets rid of the busywork, both for the recipient and the social security sector.

In France it is 524€ per month with a usually undisclosed Christmas bonus.

This is an unemployment/disability benefit, precisely the kind of thing basic income is supposed to eliminate.

I'm all for a UBI but I'm very skeptical of the feasibility of implementing one based on the dollar or any paper based monetary system that is not an actual standard and scientific measure of resources, and none of them are to my knowledge.

An efficient UBI would be implemented using a computer based mathematical measurement system.

We've already got a surplus of food, water, and shelter to take care of all humanity, we just haven't figured out how to measure and distribute it properly.

Technologies such as machine vision and video/image recognition could keep a real time measurement of the global resource stockpile. Feed that into an open source distributed ledger for all to see, and then distribute it based on a demand algorithm using solar powered drones for maximum efficiency.

No problem Mr Asimov.

Also from today: http://qz.com/548985/whats-wrong-with-finland/

>The Finnish economy is 11% smaller than its 2008 peak, making it look more like Italy or Spain than the stronger “core” countries of the euro zone. According to the latest monthly estimates, Finland’s economic output shrank by a daunting 2.6% in September versus the year before, the worst result in more than two years

Kudos to Finland! I think their BI may be a bit high (the trial amount seems about right), but inflation will adjust to the amount so it won't really matter much.

I think it is wrong to think of BI as an income one could actually live comfortably on, as this article seems to. That would provide too much disincentive to be unproductive. Rather a BI should be just enough to keep people from starving and freezing and enough to bootstrap a life with.

Not sure about Finnish example, but where I am right now (Switzerland), social security does exactly that, without major costly experiments with god know what results.

In fact, system is so effective that if you end up unemployed, for one year you'll be given 80% of your former salary (capped, but to 120,000 CHF!) so you are not burdened with looking for cheaper accommodation etc which is very hard here. If you cannot find anything in 1 year, then other services kick in, of course with much lower cash flow. It works remarkably well.

There are some propositions for calling 'basic income' a 'technological dividend'.

Changing the name changes the debate about it in a manner that is, maybe, more appropriate for the modern times.

At the end of the day, a basic income it's only possible in affluent societies, and it's technology what makes a society affluent.

Here in Cyprus we have guaranteed minimum income benefit of 480 euros since 2014 http://ec.europa.eu/social/main.jsp?catId=1105&langId=en&int...

That's not the same though, I believe most countries have a guaranteed minimum income (520 euros in France) but unlike basic income, minimum income is not unconditional.

It disappears if you earn money from a job, which creates (some) disincentive to find a job, and requires elaborate rules to reduce this disincentive (like reducing the benefit progressively relative to the total income, etc).

Basic income on the other hand is unconditional, so whatever job you have you won't feel like you're losing on benefits (at least, that's the idea).

The title is misleading, since all the Baltic countries have basic income for like 20 years. If anyone's interested - in Lithuania it's 305euros, in Latvia 350, in Estonia, if i'm not mistaken it's something about 400

We are all interested but some references would be handy. Are you sure that you have not confused this with a CONDITIONAL minimum income? That is one that is only available to people who don't have an income, a means tested payment.

Also even in the Baltic states EU400 is surely not much for a month.

You are mistaken. You are referring to the common welfare system that western countries tend to have which could be thought of as a minimum income but which leads to lots of bureaucracy due to the requirement for means testing. Basic income is different because it is unconditionally paid to everyone without any means testing.

I want to think basic income is a good idea.

But how the "bonus salary" will be calculated in the case of political jobs (to legislate) and above all army? Is there any texts on this subject?

I assume "current salary" - "basic income" = "bonus salary" would be a good place to start.

This makes sense only if we are getting rid of all other welfare.

The article says it will replace some other benefits that Finns currently have. If the project works then I assume other welfare programs will be folded into the basic income over time.

Yes. That is a smart thing to do but generally there is a strong resistance from different branches of government responsible for delivering those welfare schemes. The arguments tend to be "but that person will spend it on drugs".

This is going to be hilarious.

Finland, you so silly.

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