Finnish Welfare model

[jsgolfer]

Would this work in the US? Give all adults, regardless of current tax bracket, a monthly stipend (whatever amount that is) and abolish most welfare services?  I like the idea of getting people to take more responsibility for themselves, but have we raised too many people that are dependent on welfare to survive to do anything like this?  I'll be interested to see how this works out.

http://www.city-journal.org/html/finnish-model-14302.html

" 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. "

 

[pganapathy]

Honestly, this is a much better and simpler plan than subsidizing a hundred different things.  The only question is what all services get pulled.  For example, do medical costs now go up to crazy amounts for just going into a hospital.  Plus this forces people to be responsible for their own lives and to not blame the government.  Big thumbs up

[Jeremie Boop]

I don't think it would really work to look at other countries' plans or systems of welfare/public assistance/etc because the difference in population, cost of living, and average annual income rarely, if ever, are close to what it is here. If you went with this sort of plan, people who received the funds and spent them unwisely would say either they need more or that it's unfair for one reason or another.

[saevel25]

59 minutes ago, jsgolfer said:

Would this work in the US? Give all adults, regardless of current tax bracket, a monthly stipend (whatever amount that is) and abolish most welfare services?  I like the idea of getting people to take more responsibility for themselves, but have we raised too many people that are dependent on welfare to survive to do anything like this?  I'll be interested to see how this works out.

This was much inline with part of the Fair Tax promoted by Neal Bortz.

Quote

The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or "prebate", of tax on purchases up to the poverty level

There would be no income tax, but a tax on the final sale of a product or service. I think this is similar to what the Finnish are doing, but I don't think the they are getting rid of the income tax system for a national only sales tax?

28 minutes ago, Jeremie Boop said:

I don't think it would really work to look at other countries' plans or systems of welfare/public assistance/etc because the difference in population, cost of living, and average annual income rarely, if ever, are close to what it is here. If you went with this sort of plan, people who received the funds and spent them unwisely would say either they need more or that it's unfair for one reason or another.

A better way would be to mandate states to implement a system. Then they can develop their own tailored to their own states and local needs. Also you then get 50 test cases on what works or not instead of just jumping feet first into one system and hoping it doesn't bankrupt the country.

 

[Jeremie Boop]

Just now, saevel25 said:

A better way would be to mandate states to implement a system. Then they can develop their own tailored to their own states and local needs. Also you then get 50 test cases on what works or not instead of just jumping feet first into one system and hoping it doesn't bankrupt the country.

 

I agree that systems should be managed by each state because they are much more knowledgeable about what would work for them as opposed to a one size fits all style program.

[14ledo81]

In theory I like it.  I don't think it works though.  On the one hand it can possibly increase incentive to work because you won't be "cut off" from benefits if you earn to much.

The problem (I think) comes in when someone makes poor decisions with their stipend.  They are still going to complain or people will wind up paying for them some way.

[Patch]

I don't think giving a single adult, with 2 children $2000.00 a month would be enough in the USA. 

[Jeremie Boop]

6 minutes ago, Patch said:

I don't think giving a single adult, with 2 children $2000.00 a month would be enough in the USA. 

2000 on top of whatever they are making working isn't enough? Even at minimum wage that works out to close to $40,000 a year.... I find it hard to believe that isn't enough to make ends meet considering it's just over 2.5x the annual income at the minimum wage of 7.25. The only way it wouldn't be enough is if they spent their money frivolously. Which is, of course, the problem.

Edited March 21, 2016 by Jeremie Boop

[newtogolf]

Any system likes this fails because ultimately many people are too stupid or irresponsible to properly manage their stipend and will place themselves and possibly their family into a situation where their well being is at risk.  We being a humane society (suckers) we will want to make sure they are taken care of and once again they will end up as wards of the state or government.  

Until the leeches are forced to deal with the full consequences of their actions or lack of we will never rid the system of them.  

[Patch]

Just now, Jeremie Boop said:

2000 on top of whatever they are making working isn't enough? Even at minimum wage that works out to close to $40,000 a year.... I find it hard to believe that isn't enough to make ends meet considering it's just over 2.5x the annual income at the minimum wage of 7.25. The only way it wouldn't be enough is if they spent their money frivolously.

I was talking of the folks on welfare now with no income other than a stipend. 

[jsgolfer]

21 minutes ago, saevel25 said:

This was much inline with part of the Fair Tax promoted by Neal Bortz.

There would be no income tax, but a tax on the final sale of a product or service. I think this is similar to what the Finnish are doing, but I don't think the they are getting rid of the income tax system for a national only sales tax?

A better way would be to mandate states to implement a system. Then they can develop their own tailored to their own states and local needs. Also you then get 50 test cases on what works or not instead of just jumping feet first into one system and hoping it doesn't bankrupt the country.

 

I really like the Fair Tax idea, have for many years.

[saevel25]

13 minutes ago, Patch said:

I don't think giving a single adult, with 2 children $2000.00 a month would be enough in the USA.

Someone did a calculation and found the average food budget for a family of four was $750-$1000 a month.

I think $2000 is pretty good when it covers your food for a month and you have $1000 left over. That can cover rent and utilities on a decent size apartment in some states.

So you have food and housing taken care of. That is pretty solid.

6 minutes ago, jsgolfer said:

I really like the Flat Tax idea, have for many years.

Same here, though I like it more on a national sales tax. It's a bit more unstable for the government because it's based on consumerism. Yet it would be more beneficial for the government to then promote helping businesses grow so people can buy more.\

 

[SavvySwede]

29 minutes ago, saevel25 said:

This was much inline with part of the Fair Tax promoted by Neal Bortz.

There would be no income tax, but a tax on the final sale of a product or service. I think this is similar to what the Finnish are doing, but I don't think the they are getting rid of the income tax system for a national only sales tax?

A better way would be to mandate states to implement a system. Then they can develop their own tailored to their own states and local needs. Also you then get 50 test cases on what works or not instead of just jumping feet first into one system and hoping it doesn't bankrupt the country.

 

 

10 minutes ago, jsgolfer said:

I really like the Fair Tax idea, have for many years.

Isn't that sort of backward though? I would think a high sales tax would kill the economy because it discourages spending. I'd cut out the sales tax and property tax (on any residential property under a certain acreage) and make taxes income only.

[Yukari]

18 minutes ago, newtogolf said:

Any system likes this fails because ultimately many people are too stupid or irresponsible to properly manage their stipend and will place themselves and possibly their family into a situation where their well being is at risk.  We being a humane society (suckers) we will want to make sure they are taken care of and once again they will end up as wards of the state or government.  

Until the leeches are forced to deal with the full consequences of their actions or lack of we will never rid the system of them.  

This +1. 

If everyone knew how to manage their finances and are responsible, many wouldn't be on welfare in the first place. 

[Jeremie Boop]

1 hour ago, Patch said:

I was talking of the folks on welfare now with no income other than a stipend. 

Even without a minimum wage job that is $24,000 a year. Which is equal $11.53 an hour for someone who isn't working at all. Is there taxes coming out of that $2000 a month? If not then that $24,000 a year spendable money = probably closer to around $29.000 of taxable income or about $13.84, which, again, is for not even working. Either way, I again say, if that isn't enough to make ends meet for a family of 3 then there is a definite issue with spending somewhere. Would it provide an income that allows for buying extras and unnecessary items/services? Probably not, but it absolutely shouldn't do that. Public assistance isn't supposed to provide for anything other than what is essential.

[Hardspoon]

I've seen several articles recently discussing the idea that ever-increasing automation will eventually require a "minimum living wage".  Not sure I necessarily agree, but it's interesting that while most people think about minimum wage increases driving automation, it's not often thought of in reverse.

 

[jsgolfer]

2 hours ago, SavvySwede said:

 

Isn't that sort of backward though? I would think a high sales tax would kill the economy because it discourages spending. I'd cut out the sales tax and property tax (on any residential property under a certain acreage) and make taxes income only.

If you do a consumption tax, then in theory you catch all underground money, thereby increasing revenue (not sure if it would stop spending, people would have more money in their pocket, stuff would just cost more).  But because it would have to be so high, ~20-25% it will never happen.  

So a flat tax would be better than what we have now.