Universal basic income: challenges to the Finnish model

*Original article published on argentinian newspaper, Infobae, on 17/05/2018. https://www.infobae.com/opinion/2018/05/17/el-ingreso-basico-universal-desafios-frente-al-modelo-finlandes/

Finland's decision to cancel its program entitled "Basic income" is extraordinary. This demonstrates its capacity for change and reaction. The reaction of Finland is correct, because it did not reduce general taxes and did not eliminate the burdens on work and did not oblige to use that public aid for specific purposes and, in fact, it destined public funds for a statistical information of consumptions in order to know what a small number of unemployed people would spend money on.

It was an expense without any specific obligation in a country that already provided health insurance, free education and generous subsidies.

Basic consumption statistics are already known, including percentages by income, age or gender: food, health, housing, education, communication, transportation, public services, clothing, and leisure.

But the greatest confusion is that it was not a universal assignment because it was destined to a fragment of the population (amplitude: two thousand people, segment: unemployed and ages: between 25 and 58 years) and, therefore, did not include the entire population without distinction of gender, age, economic capacity, social situation or geographical location.

The universal assignment, the universal credit or other denominations is the inevitable consequence of state reforms on taxes and social security that lead to the unification of the different public aids.

The discussion is broadened by the treatment of central issues such as the elimination of labor taxes and the significant reduction of all taxes. On the other hand, as a consequence of these lower resources, the necessary state efficiency in the technological distribution of taxes with social destiny is required.

If work is important for people and society, it is being altered by imposing specific taxes on labour, since the pocket salary is not equal to the nominal salary. Social security in almost all countries receives more and more general taxes to cover cash deficits, but the benefits received are less and less.

An approximate third of the taxes collected is destined to public administration, security, Justice, payment of debt and promotion of the economy, and the rest has a social destiny.

Poverty and limitations to development in people with fewer resources still exist, despite the effort that is made with the thousands of programs, plans and actions that are implemented in the national, provincial, municipal and even companies and state entities.

The reduction of taxes will impose a single efficient distribution system for all holders of identity documents, with one or two monthly accreditations to cover basic consumptions already established.

State aid or social security is for the entire population, which will have the benefits of a very small banking accreditation for certain consumption and the immediate double personal effect of reducing taxes on personal income and the reduction in the price of acquisition of goods or services.

Let us hope that in the short term there will be a true universal assignment.

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