Unbiased Analysis of Today's Healthcare Issues

Is Finland ending welfare?

Written By: Jason Shafrin - Mar• 29•16

Maybe yes.  According to City Journal:

This year, the Finnish government hopes to begin granting every adult citizen a monthly allowance of €800 (roughly $900). Whether rich or poor, each citizen will be free to use the money as he or she sees fit. The idea is that people are responsible for their actions. If someone decides to spend their €800 on vodka, that is their decision, and has nothing to do with the government. In return for the UBI, however, the public accepts the elimination of most welfare services. Currently, the Finnish government offers a variety of income-based assistance programs for everything from housing to children’s education to property insulation. Axing these programs should free up enough public resources to finance the UBI. The bureaucracy that currently governs welfare payments will disappear. There will no longer be any need to ask for government help, nor to fill out forms or wait for the competent authorities to examine each dossier to determine eligibility…

Remarkably, every major Finnish political party has signed on. The Left is cheered by the socialistic idea of government-assistance-for-all. The Right looks forward to the unprecedented drop in bureaucratic control over citizens, an unheard-of extension of freedom of choice, and an unconditional restitution of part of citizens’ taxes.

Could this form of a negative income tax be implementing in the U.S? Certainly. Should it? Clearly giving away money increases the risk of fraud and corruption, but giving individuals the choice of what to do with their money, reducing the cost of bureaucracy, while ensuring a minimum standard of living is clearly an attractive option.

On a side note, GiveDirectly uses a similar, cash-based approach to charity in the developing world.

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One Comment

  1. Olli Markkanen says:

    Finnish guy here. It’s not going to be 800€, more like 550 or so. It will not be for every adult citizen, it’s just a test and there will very probably be just a sample of people getting it.

    Welfare services will not be eliminated, there will still be need of them, but they’ll probably do some restructuring, because most people can be responsible with the money. It’s not axing the programs that gives the money, though lots of the money would go through these programs anyway, so it’s not much more expensive. Lots of the bureaucracy will disappear, but not everything, as it doesn’t replace everything, like housing costs. There will be a lot of need to ask money for the housing, but that’s usually the easiest to ask for as it’s usually file and forget thing until situation changes.

    It’s not technically a negative income tax, but a true basic income, as the money is given first and then taken from the taxes if you actually had enough income.

    While it doesn’t solve all relevant problems, it’s still pretty great.

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