Finland is going to test Universal Basic Income (UBI) or so the news say. Finland is going to be choosing some 2000 people at random, irrespective of their financial or educational backgrounds in the working age group (25-58) to receive $581 each month through the end of 2018.
The idea of UBI is fairly timed, with some of the discussions dating as back as the 18th century (Thomas Paine seems to be the person to bring it up apparently). The idea here is that every citizen receives an equal pay, NO QUESTIONS ASKED! You can still keep your job(s) and get the Basic Income.
What caught my curiosity was HOW, just how would it work? Who’s going to pay for all that money. We’ll it’s all grounded in a theory and we’ll get to that. But before that let’s settle the question of the numbers. As it turns out,
- Social Justice Ireland estimated that it would be affordable with a 45% tax rate.
- Charles M.A. Clark estimates that the United States could support a Basic Income large enough to eliminate poverty and continue to fund all current government spending (except that which would be made redundant by the Basic Income) with a flat income tax of just under 39 percent.
Doable, huh! Now, now, before you go on ranting about an even higher tax rate, let’s get the theory straight.
The original theory behind UBI is that nature was created equal for all. Over time, privatization has left more natural resources with a select few. So with a UBI scheme, the “holders” of the resources will, through taxation, share the resources with the rest. UBI will enable anyone and everyone to have the absolute minimum to sustain basic life. Moreover, as more and more jobs start being replaced with automated versions, unemployment might be heading upwards. UBI would reform social security to make it equal for everyone, no discrimination.
Here’s the sequel on the possible consequences, pros and cons of the strategy.