4 ms·

The problem in those countries is taxes and social contributions. You need to make 10 in order to bring home 5, that kills work, completely. Now the basic incom

by kfk 11y ago

The problem in those countries is taxes and social contributions. You need to make 10 in order to bring home 5, that kills work, completely. Now the basic income, so basically we want the State to manage even more of the economy. If past experience would prove this effective, then OK, but it just proves the opposite! Let me do some back of the envelope calculations for you. In Europe we pay around 40% of income tax. On top we pay at least another 8% for pension, which we will never see, and another 8-10% for health insurance, which is not great at all. On top of that, companies have another 30-40% of cost, _on top_ of the bruto salary of an employee in taxes and similar to pay to the state. Bottom line: more than half of your cost to the company goes to the government. It's just incredibly bad. If you have a 10% unemployment the most effective way to help people is to bring that down to, say, a 3%. That will help most definitely. But for that to happen you need to bring down the cost of labor, which is just too high. And don't let me start with pension. Europe is basically starving an entire generation, you don't see it now, you will see in 30 years when the young of today will start to go into retirement age. There will be no money to pay a real pension to everybody. You know how much you need to have a very comfortable pension? At a 6% rate, about 500 euro a month for 40 years. That's it, that's all you need. Right now we are paying close to this amount for a public pension, will we see that money? Absolutely not. Bottom line: they have to fix the economy. That's the only long term solution and the only way to bring people out of unemployment and poverty.

hliyan 11y ago
We should do more back-of-envelope calculations for countries, along the lines of: (cost of healthcare + pensions + welfare + welfare bureaucracy + corruption) / population > basic income ? If the value is greater or equal, basic income makes sense right off the bat.
- pjc50 11y ago
  I hope you're not proposing that basic income is a replacement for healthcare? They're two completely different things.
  - TeMPOraL 11y ago
    While of course basic income is not a replacement for healthcare, the health spending cost reduction under such scheme is an interesting topic. A country could probably save a lot on psychiatric hospitals. It's not rare that a person attempts suicide (or looks like they're going to attempt it) because they're poor and in debt, barely holding to a low-paying job; they get put on an observation (during which they'll probably lose their job), stuffed with medication and then thrown back to society at large. The hospitalization itself can cost more than the debt the patient has is worth. I think such cases are making benefits of BI hard to estimate - because it could eliminate some percentage of costs across so many different aspects of public spending that it's getting hard to keep track of them all.
    - RobertoG 11y ago
      And don't forget the reduction in crimes.
    - notahacker 11y ago
      Basic income is not going to prevent people from taking on unsustainable debts. Arguably it's less likely to do so than a conventional bureaucratic, means-tested system, since (i) such systems usually directly subsidise things people tend to get into debt for (housing, education/training, and medical care) and have a more flexible, living-costs-related approach to the size of the subsidies on offer and (ii) predatory lenders can chase the indebted far more aggressively when armed with the knowledge their target has a cash income of at least $xx per month and therefore could easily make the payments if they stopped paying for their house, food and health insurance...
_petronius 11y ago
> If past experience would prove this effective, then OK, but it just proves the opposite! Can you cite some examples? I'm interested, because I seem to read a lot about how experiments with basic income actually tend to work out very well. (It certainly does in Alaska, although that isn't much money[0], as well as other examples[1] cited in this thread.) > Europe we pay around 40% of income tax. On top we pay at least another 8% for pension, which we will never see, and another 8-10% for health insurance, which is not great at all. On top of that, companies have another 30-40% of cost, _on top_ of the bruto salary of an employee in taxes and similar to pay to the state. I don't know how much you earn, or where you work in Europe, but I have never paid this much. Income tax and social security (including NHS contributions, so all my health insurance) in the UK was never more than 30% of my salary. It's about the same for me in Germany right now, if anything a little lower. Maybe you're in a really wealthy income bracket, though, in which case -- congratulations? [0]: https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Permanent_Fund_Dividend https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Permanen... [1]: http://www.cbc.ca/news/canada/manitoba/1970s-manitoba-poverty-experiment-called-a-success-1.868562 http://www.cbc.ca/news/canada/manitoba/1970s-manitoba-povert...
- deleted 11y ago
  [deleted]
- Radim 11y ago
  The Czech republic, for example: For you to bring home 2,000 EUR net, your employer has to dish out 3,740 EUR. That's about 46.5% taxation -- very close to OP's 50%. (and that's not counting VAT and other consumer taxes, we're talking income only here) This is not the "high income" bracket either, that attracts an additional "solidarity" income tax. Like the OP said, nobody really expects to see any pension, and to get good health care, you have to pay private again for that.
- throwaway12309 11y ago
  If you are in the UK, 50k a year (above average but honestly, if even remotely close to London, not that much) will bring you a tax bill of around 38% (19k) if you consider employee NHS contributions ( data from http://www.listentotaxman.com/50000 http://www.listentotaxman.com/50000? ). So you are already at 38% and you have council tax (probably another 2k or more a year) plus VAT (21% or something?) on stuff you buy. I don't remember other taxes I paid while in the UK but these were the big ones. It isn't hard to get to the end of the year and see that you(+ employer) paid around 50-60% in taxes. I live in Portugal, and if I consider VAT+income tax+social security contributions (self employed so I pay both parts or approx. 33% in social security) and ignoring other extra taxes (property, road tax, etc) 62% or so of the money I earn goes to the government (this was for 2014, my accountant did the math). I could probably get this lower with some creative accounting I guess.
ousta 11y ago
except for the public pension that is a shameful tool invented to satisfy one generation of privileged people, I disagree with you. The problem is not the % of income tax. tax is fine if the system works. take a simple example in many european countries education is free. in USA even in a community college, going beyond two year studies will cost you 10K$ per child, then if you do not have a good company insurance it will cost you an arm to insure your family. id rather pay tax to subvention education. the only problem is that salaries are not going up since the early 00s, tuition costs are going up, consumer goods prices are going up, accomodation price are so crazyly high (especially in cities where there are lot of jobs) that you won't get a house before 30-40 years of debt. Hell people even thought their greatchildren will work two days a week and earn more than them but the sad truth is that the payroll of a qualified worked in today's world will buy you less than a blue collar in the old days. this is the great failure we experiencing right now, tax just did the right thing, they went up, like everything else but our salary. This is the only thing to fix in the world right now. a company shouldn't make 400K$ profit per employee.
Matumio 11y ago
The thing with a tax for basic income (as opposed to other taxes) is that the money doesn't go to the government, it goes directly to the people. The government cannot decide how this money is spent, so it's not a "fat government" thing. And what is this "past experience" you refer to? If you are referring to communism, this is in some sense the very opposite of an unconditional basic income - unconditional means the government cannot tell you what to do (nor can employers, as long as you don't want to own a car, have a nice home, etc.). Yes, "fix the economy". But how? Basic income is actually a proposal how to fix it, I think.
rue 11y ago
You always pay for it. The US does have a lower tax rate, for example… but then you pay for health insurance, schooling, etc. etc. that in other places are handled through the higher tax rate.

by kfk 11y ago

hliyan 11y ago

We should do more back-of-envelope calculations for countries, along the lines of: (cost of healthcare + pensions + welfare + welfare bureaucracy + corruption) / population > basic income ? If the value is greater or equal, basic income makes sense right off the bat.

pjc50 11y ago
I hope you're not proposing that basic income is a replacement for healthcare? They're two completely different things.
- TeMPOraL 11y ago
  While of course basic income is not a replacement for healthcare, the health spending cost reduction under such scheme is an interesting topic. A country could probably save a lot on psychiatric hospitals. It's not rare that a person attempts suicide (or looks like they're going to attempt it) because they're poor and in debt, barely holding to a low-paying job; they get put on an observation (during which they'll probably lose their job), stuffed with medication and then thrown back to society at large. The hospitalization itself can cost more than the debt the patient has is worth. I think such cases are making benefits of BI hard to estimate - because it could eliminate some percentage of costs across so many different aspects of public spending that it's getting hard to keep track of them all.
  - RobertoG 11y ago
    And don't forget the reduction in crimes.
  - notahacker 11y ago
    Basic income is not going to prevent people from taking on unsustainable debts. Arguably it's less likely to do so than a conventional bureaucratic, means-tested system, since (i) such systems usually directly subsidise things people tend to get into debt for (housing, education/training, and medical care) and have a more flexible, living-costs-related approach to the size of the subsidies on offer and (ii) predatory lenders can chase the indebted far more aggressively when armed with the knowledge their target has a cash income of at least $xx per month and therefore could easily make the payments if they stopped paying for their house, food and health insurance...

_petronius 11y ago

> If past experience would prove this effective, then OK, but it just proves the opposite! Can you cite some examples? I'm interested, because I seem to read a lot about how experiments with basic income actually tend to work out very well. (It certainly does in Alaska, although that isn't much money[0], as well as other examples[1] cited in this thread.) > Europe we pay around 40% of income tax. On top we pay at least another 8% for pension, which we will never see, and another 8-10% for health insurance, which is not great at all. On top of that, companies have another 30-40% of cost, _on top_ of the bruto salary of an employee in taxes and similar to pay to the state. I don't know how much you earn, or where you work in Europe, but I have never paid this much. Income tax and social security (including NHS contributions, so all my health insurance) in the UK was never more than 30% of my salary. It's about the same for me in Germany right now, if anything a little lower. Maybe you're in a really wealthy income bracket, though, in which case -- congratulations? [0]: https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Permanent_Fund_Dividend https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Permanen... [1]: http://www.cbc.ca/news/canada/manitoba/1970s-manitoba-poverty-experiment-called-a-success-1.868562 http://www.cbc.ca/news/canada/manitoba/1970s-manitoba-povert...

deleted 11y ago
[deleted]
Radim 11y ago
The Czech republic, for example: For you to bring home 2,000 EUR net, your employer has to dish out 3,740 EUR. That's about 46.5% taxation -- very close to OP's 50%. (and that's not counting VAT and other consumer taxes, we're talking income only here) This is not the "high income" bracket either, that attracts an additional "solidarity" income tax. Like the OP said, nobody really expects to see any pension, and to get good health care, you have to pay private again for that.
throwaway12309 11y ago
If you are in the UK, 50k a year (above average but honestly, if even remotely close to London, not that much) will bring you a tax bill of around 38% (19k) if you consider employee NHS contributions ( data from http://www.listentotaxman.com/50000 http://www.listentotaxman.com/50000? ). So you are already at 38% and you have council tax (probably another 2k or more a year) plus VAT (21% or something?) on stuff you buy. I don't remember other taxes I paid while in the UK but these were the big ones. It isn't hard to get to the end of the year and see that you(+ employer) paid around 50-60% in taxes. I live in Portugal, and if I consider VAT+income tax+social security contributions (self employed so I pay both parts or approx. 33% in social security) and ignoring other extra taxes (property, road tax, etc) 62% or so of the money I earn goes to the government (this was for 2014, my accountant did the math). I could probably get this lower with some creative accounting I guess.

ousta 11y ago

except for the public pension that is a shameful tool invented to satisfy one generation of privileged people, I disagree with you. The problem is not the % of income tax. tax is fine if the system works. take a simple example in many european countries education is free. in USA even in a community college, going beyond two year studies will cost you 10K$ per child, then if you do not have a good company insurance it will cost you an arm to insure your family. id rather pay tax to subvention education. the only problem is that salaries are not going up since the early 00s, tuition costs are going up, consumer goods prices are going up, accomodation price are so crazyly high (especially in cities where there are lot of jobs) that you won't get a house before 30-40 years of debt. Hell people even thought their greatchildren will work two days a week and earn more than them but the sad truth is that the payroll of a qualified worked in today's world will buy you less than a blue collar in the old days. this is the great failure we experiencing right now, tax just did the right thing, they went up, like everything else but our salary. This is the only thing to fix in the world right now. a company shouldn't make 400K$ profit per employee.

Matumio 11y ago

The thing with a tax for basic income (as opposed to other taxes) is that the money doesn't go to the government, it goes directly to the people. The government cannot decide how this money is spent, so it's not a "fat government" thing. And what is this "past experience" you refer to? If you are referring to communism, this is in some sense the very opposite of an unconditional basic income - unconditional means the government cannot tell you what to do (nor can employers, as long as you don't want to own a car, have a nice home, etc.). Yes, "fix the economy". But how? Basic income is actually a proposal how to fix it, I think.

rue 11y ago

You always pay for it. The US does have a lower tax rate, for example… but then you pay for health insurance, schooling, etc. etc. that in other places are handled through the higher tax rate.