Comment by kriro | Hacker News Reader

Comment by kriro | Hacker News Reader

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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.

> 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.

> 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.

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.

> 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.

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...

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.

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.

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

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