Finnish politics commentator and French basic income pioneer Alain Lefebvre writes an in-depth article detailing Finland’s plans for a national UBI.
Alain Lefebvre
The central government in Helsinki has called on experts to put forward different implementation schemes that are consistent with the Finnish Constitution by March 2016, in order to make a final choice by November 2016 and then launch a nationwide pilot in 2017.
Lefebvre offers a range of insights into the Finnish initiative, which at present is placing more emphasis on cutting red tape and marginal tax rates for lower incomes, as opposed to ending poverty as such.
Alain Lefebvre, “Basic income: How Finland Plans to Implement The First Nationwide Project in the EU,” Finland Politics, 5 November 2015
I wish I could persuade the Green Party, which has had a Basic Income as [policy since 1974, of how central it should be to the recent debate about Tax Credits and the ongoing debate about Universal Credits. I have been pointing out that reducing marginal effective tax rates is the key..
clivelord.wordpress.com
NIT and UBI are pretty much the same thing[1,2]. The difference between funding NIT and UBI is significant. At similar taxpayer funding levels, an individualized working-age Citizen’s NIT is more effective as an anti-poverty program to reduce the informal sector[3] if minimizing taxes on the formal sector (or inflation tax), to fund it, is an objective. The advantage of minimizing taxes is to promote a more productive, profitable and competitive formal sector over the opportunity cost of the informal sector[4]. An increasing formal sector provides higher government revenues (or lower taxes). An individualized Citizen’s NIT including children reduces benefits for working-age parents [5] and financially incents non-zero-growth families. An advantage for government of an individualized working-age Citizen’s NIT is that the financial responsibility for children is placed squarely on the shoulders of parents, rather than government. Preschool child care benefits may further promote the formal sector for single parents or families where both parents work, further reducing the less productive, less profitable and less competitive informal sector. A UBI may have an advantage over NIT in highly advanced economies, where the formal sector is not at risk of being reduced by the imposition of additional costs to fund it and population growth is not an issue. This may suggest that NIT is a cautious stepping-stone to UBI that reduces the chances of getting wet from a single leap.
[1] Basic Income and Negative Income Tax: A Comparison with a Simulation Model | Pertti Honkanen | 12/2014
https://www.deepdyve.com/lp/de-gruyter/basic-income-and-negative-income-tax-a-comparison-with-a-simulation-xDklGJ0fhl
[2] The Negative Income Tax and Basic Income are pretty much the same thing
http://www.adamsmith.org/blog/tag/basic-income/
[3] A Classical Theory of the Informal Sector | Gibson | Manchester School | 1994
https://www.uvm.edu/~wgibson/Research/informal.pdf
[4] A Theory of the Informal Sector | Azuma, Grossman | NBER | 2002
http://www.nber.org/papers/w8823.pdf
[5] Press Release: Reform tax credits with a Negative Income Tax, says new report | Written by Kate Andrews | Monday, October 26th, 2015
http://www.adamsmith.org/news/press-release-reform-tax-credits-with-a-negative-income-tax-says-new-report/