Finland Will Give Some Unemployed Citizens a Basic Income (theoutline.com)

Next month, the Finnish government is going to try something completely different to help its unemployed citizens: give them free money. From a report on The Outline: On Jan. 9, 2017, a randomly selected group of 2,000 unemployed citizens in Finland will receive a check for 560 euros (about $585) with no strings attached. They'll continue to receive that check every month for two years straight, even if they find a job or continue to remain unemployed. This is part of an experiment to see what happens to people's participation in the labor market after they've been guaranteed a certain amount of money.

Comments

I predict a lot of misunderstandings about BI

[serviscope_minor]

I suspect this thread like the last will have a lot of misunderstandings about BI.

The biggest misunderstanding for the general principle is that you take the existing system as-is and simply give everyone 10k per year or something. The numbers are clearly absurd so that causes people to dismiss it.

That's not how it works.

Basically what you do is modify (increase) the tax so in most cases, people get net more or less what they do now. That way the numbers come out more or less the same as they are now but in practice on the low end people do get extra money. Most people won't see much of a change.

Re:I predict a lot of misunderstandings about BI

[bluefoxlucid]

I encourage you to take a look at the spreadsheet labeled "WageTax", and the one labeled "EmploymentCost".

Single individual making $150,000 takes home $3,932 more per year; employer cost is roughly $9,300/year cheaper (assuming a low 18%-of-salary cost of employment, although it's usually 25%-40%). Buying power difference is estimated here as a 9% increase, although that's again a conservative estimate.

Single individual making $60,000 (about median) takes home $6,289 more per year; employer pays roughly $3,720 less. Buying power difference is about a 19% increase.

For married households, it's bigger, although the costs to the employer don't change (they drop by the same amount).

Taxes don't need to be raised on the highest income earners; they can be lowered on businesses, notably on payroll (tax taken based on how much wages you pay).