Statements of support for the unconditional basic income for the European Citizens' Initiative will be collected from 25 September 2020 to 25 September 2021.

Now all doubts should be dispelled. The COVID-19 pandemic and universal forced quarantine have spoken for themselves. There is no good alternative to have a decent guaranteed standard of living for every individual.

Man is himself an economy. As a consumer, he maintains companies, is their employer. By ensuring the subsistence of the individuals, the state supports through them that part of the business, the work of which is essential even when whole society is quarantined. In fact - the whole business. A small family business will also survive and no employer will have to pay to their employees for not working.

In addition, life itself gives endlessly many examples of the need to ensure a person's independence from both the employer and fellow citizens, even family members. Leaving a violent relationship or spreading one's "wrong" mind must not be a risk of poverty. Unconditional basic income cuts through chains of dependency and does not allow anyone to be "canceled".

Basic income, citizen's salary ... Whatever we call it - the question of "whether to implement" is a thing of the past. All that remains is "how would be best to do it". Let this be the subject of Brussels' work. We support the initiative!

ECI official info

Start Unconditional Basic Incomes (UBI) throughout the EU

Subject Matter:
Our aim is to establish the introduction of unconditional basic incomes throughout the EU which ensure every person’s material existence and opportunity to participate in society as part of its economic policy. This aim shall be reached while remaining within the competences conferred to the EU by the Treaties.
Objectives:
We request the EU Commission to make a proposal for unconditional basic incomes throughout the EU, which reduce regional disparities in order to strengthen the economic, social and territorial cohesion in the EU.
This shall realize the aim of the joint statement by the European Council, the European Parliament and the European Commission, stated in 2017, that “the EU and its member states will also support efficient, sustainable and equitable social protection systems to guarantee basic income” in order to combat inequality.

ANNEX: definition, treaty on EU, fundamental rights charter, treaty on the Functioning of the EU

see - Att. 3 ANNEX V3-pdf

 

About UBI

Definition of UBI

 

Unconditional Basic Income is a guaranteed regular income aimed to cover people's compulsory expenditures and to be payed to everyone no matter he/she got salary for working or is jobless, company owner, pensioner or a child. 

The main goal of an UBI is to end the poverty fear along with poverty itself from our life, guaranteeing this way the life in dignity and personal freedom to maike life decisions for everyone. Nobody has to eat from anybody's hand - everyone will be unchained from from the employer's or family member's wallet.

UBI will replace most of the traditional social security instruments, transforming the social security system as "emancipatory" - nobody has to prove anything to receive this universal income.

About this film created in 2008 by Daniel Häni & Enno Schmidt: read more in "Implementation" section

Case 1: every legal resident

Unconditional Basic Income itself is considered as a human right being really fully unconditional. Anyone who lives in European Union as a legal resident would be egilible to the basic income paid from country's authorities. That means not only E.U citizens but also people from outside. 

Pro: very humanist approach

Con: attractivity for immigrants

Case 2: every EU citizen everywhere

UBI is considered as a civil right and restricted to the people who has obtained any EU country's citizenship. In any EU country, no matter from which EU member the resident is, he/hse is egilible for the public basic income in a local amount. 

Pro: encourages the free movement of workers inside EU, making the union less attractive for immigrants

Con: encouratges the "mixdown" of population that would lead to etnical and cultural assimilation; in case of unequal purchase power of UBI-s the richer countries would its attractivity for workers from poorer countries.

Case 3: only the current country's citizens

In each EU member country only this countrie's citizens are egilible for UBI. Employers needing workers who are other countries citizens (no matter from EU or elsewhere) should pay them salary in amount that would correspond to the sum including regular amount for this job and the amount of national UBI. Where a national minimum wage is available, there the minimum wage for strangers would be minimum wage + national UBI. 

Pros: keeping low the import of workers

Cons: hardest conditions for employers

Soft landing: no fear of poverty

Fear of poverty = fear of failure = stress = bad work

UBI is aimed to guarantee a soft landing for everyone regardless whether to a simple worker or entrepreneur. That would eliminate the fear of poverty, so anyone could be fully dedicated to the work and its results. In case of failure the soft landing pad just exists - no need to do anything special to get it. 

Fear of poverty = wallet chains inside family = keeping alive unsupportable marriage

Often it's very hard for the victims of family violence to quit their bad marriage because of the economical dependence of violent family member. UBI would break such wallet chains. 

Feeding enterprises via people

Principally, the Unconditional Basic Income means that the public sector would finance one part of national economy, funding particular kind of enterprises, but not directly - via the citizens instead. 

Those particular enterprises are providing goods and services that the people could not live in dignity and participate in society without - food and clothes production and selling, telecommunication services, housing related services and public transport. 

So the money's itinerary in national economy would have just one additional stop in the citizens' bank accounts. This is not any kind of black hole - anyone is consuming the necessary things, so the money will continue its way to enterprises, salaries and taxes.

General principle: enough for living in dignity

The general principle says that everyone should have an income that is high enough to allow them live in dignity. It's considered to be at least 60% of the median of national net income.

But in many cases the 60% doesn't fit the term "enough" as it won't actually cover all compulsory expenses, especially in most of so-called ex-socialist countries. The proportions between price levels and people's income aren't in 1:1 correlation in EU countries - gaps between income are bigger than between the prices of goods and services. 

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Case: sum of standard basket of goods and services

The amount of UBI would be a sum that depend on the total price of standard basket of goods and services in each country. This basket should be a general EU wide standard and contain

  • monthly basket of food
  • reasonable monthly expenses for clothes
  • expenses for an urban transport in capital city
  • reasonable expenses for phone, internet and cable tv connection
  • housing expenses (incl. rent) in 2 rooms+kitchen in capital city's suburb, in most common house type

For adolescents, of course, at least the housing expenses may not included.

Case: standard percent of GDP per capita

The possible amount of UBI could be considered also as some standard percent of national Gross Domestic Product per capita.

Equal percentage of GDP would make fit the UBI equally to each country's economy. But the purchase power will then be inequal between national UBI-s.

More equal approach towards citizens would be the same percentage in real euros from the GDP per capita in PPS. 

Possible model 2020 if implemented independently in Estonia (UBI 343 eur/m)

To make the picture clearer, let's use a possible sample model. The size of the citizen's salary in this model is the average standard expenditure per month per child. They were calculated in the study "Minimum needs-based aliments for children" commissioned by the Ministry of Justice and conducted by the University of Tartu. According to the study, the average standard cost in 2020 is 343 euros per month, the average cost is 388 euros per month. We assume that a citizen's salary is for a person from birth to death, and it is an equal amount. We also assume that the citizen's salary and the related additional tax layer only apply to citizens. NB! This possible model is described only to illustrate the effect on wages.

Net+343 vana TM = kogu netotulu, kui standardse tulumaksu süsteem viidaks endisele kujule, st loobutakse maksuvaba osa kahanemisest. 
Näide: bruto 4200, ühtekuuluvusmaks 25%*4200=1050, tulumaks 20%*(4200-500)=740, maksud kokku 1050+740=1790, reaalne maksukoormus 1790-343=1447 (34,45%), neto 4200-1447=2753
Võit-kaotus = kogu netotulu suurenemine või vähenemine juhul, kui tulud (nt töötasu) jäävad samaks, kahaneva maksuvaba tulu lahendusest aga loobutakse. 
Palgasurve. "Kaotuse" vältimiseks tuleks praegust 2100 euro suurust brutopalka tõsta 180 euro võrra. Kuupalka 8400 aga ca 3015 euro võrra. 
Palgakärpesurve. Kui miinimumpalka vähendataks kuni netopalga võrdsustumiseni kodanikupalgaga, siis saaks MP suuruseks 457,33 eurot kuus, MP saaja aga võidaks sellegipoolest 119 eurot kuus.
BP 2020 Net 2020 win-loose BP KP343 Net+343

Net+343
vana TM

584 567 +201 584 785 785
1000 900 +93 1000 993 993
1200 1060 +43 1200 1103 1103
1372 1179 +19 1372 1179 1198
1510 1274 0 1510 1240 1274
2100 1680 -81 2100 1499 1599
4200 3360 -607 4200 2653 2753
8400 6721 -1657 8400 4964 5064
  • minimum wage before UBI – 584 eur/month (2020)
    • foreign citizens amount - minimum wage + UBI amount, paid fully by employer
  • UBI- 343 eurot
    • not a taxable income
    • only for citizens and those foreign citizens which country has also introduced an UBI (not depending on their domestic amount)
    • for citizens from 0 years to teath 
    • UBI is a refund of taxes by its nature (until some income level you get more than you pay)
  • standard income tax 20%
    • allowance 500 euro/month
  • citizen's cohesion tax 25%
    • new tax covering partially UBI
    • only for citizens as they get UBI
    • without allowance, starts from the first euro
  • total tax marginal for citizens: until 500 eur/month 25%, since the 501-st euro 45%
    • we suppose that today's income tax model with the decreasing allowance between incomes 1200 ja 2100 euro/m (with a real marginal of 31,1%) will be rejected
  • real tax burden: paid taxes minus UBI
  • pension contribution 2%
  • foreigner's jobless insurance 1,6% 

Popular measure - rising the taxless income

Ideally and logically the amount of nontaxable income would be equal to the UBI. In most cases that would mean the raising of this free amount. When someone wouldn't be egilible for an UBI then he's/she's income would still have the same nontaxable part. 

Possible unpopular measure - rising of taxes

It seems to be clear that the appearance of UBI and rising of tax-free income part will need a rising of some tax percentages as well. In may concern in first order the personal income taxes. Althought people with low incomes may not even feel the change, the reaction may be negative, at least in beginning. 

The communists already tried to make all people equal

The basic income can't make all people equal. Generally, it reduces the inequality. 

But in some cases it could even ensure an inequality - where needed to keep alive people's work incentive. Namely, it ensures that the income of active and inactive working age people would remain inequal in favour of those who have job or enterprise. Current traditional social welfare systems could, in worst cases create a "reversed" inequality which means that receiving social transfers is more useful than having job. Literally, one has a choice - to stay home and receive social transfers 500 euros per month or to have a job and get 500 euros per month. With a basic income, the choice with the same numbers would be - to stay home and get 500 euros per month or to have and job and get 500+500=1000 euros per month.

Inversely, the communists tried to build a money-free society where all people would work according to their abilities and get the goods according to their needs. I other words the amount of goods would not depend on their work at all. The Commune of the Working People of Estonia, an unrecognized communist state with short lifetime (Nov 1918-Jan 1919) even found the salary being a "capitalist hangover" and therefore paid a "living wage" that depended on the profession (but not on the real work). In Soviet Union that tried to build communism, having a job was compulsory, people without job were punished with short term imprisonment. At the same time, people with job often spent their working time in queues fearing otherwise not to get different goods. Private enterpreneurship wasn't allowed, there were no concurrence and many other things that are usual in market economy. 

Unconditional basic income would still use the money and keep alive the market economy. 

Obvious decreasing of public sector

As due to the implementation of UBI there are no longer need for verifying the egilibility of people for social assistance, there will be no longer need for the officers whose job was related to this. So they would have to find another work or just "enjoy" the UBI: 

Work - not to survive but to get richer

While today people are working to survive, with UBI this would no longer be a motivation. However, job would mean much better life than just an existence as the salary would be paid along with UBI and its amount should be higher. 

That means also that the role of employer changes. They would be just partners, not someone who we have to be thankful for job. 

Good bye, alimony

One issue that will obviously remain in past - paying alimony for children after divorce and hunting those who don't pay. With UBI, everyone just pay them for every child and every child receive an UBI.

In case when the divorced marriage was accompanied with violence, it would be psychologially better that the victims would not have any relationship with the violent counterpart. Today however, the alimony is like unsolicited money bridge between former family members. With UBI they will get 100% free from this. 

Wage pressure up and down

Implementation of the basic income may trigger a pressure both for raising and cutting salaries depending on the wages before and how one's net income would change without changing the gross wage. Raising or cutting wages may have the following goals:

  • to preserve the competitiveness of the minimum wage and other wages for low-paid jobs and keep them motivating
  • to minimize or avoid the immediate raising of total labor costs
  • to preserve workers net income at least in the previous level
  • to keep the salaries hiararchy unchanged

Possible model 2020 if implemented independently in Estonia (UBI 343 eur/m)

To make the picture clearer, let's use a possible sample model. The size of the citizen's salary in this model is the average standard expenditure per month per child. They were calculated in the study "Minimum needs-based aliments for children" commissioned by the Ministry of Justice and conducted by the University of Tartu. According to the study, the average standard cost in 2020 is 343 euros per month, the average cost is 388 euros per month. We assume that a citizen's salary is for a person from birth to death, and it is an equal amount. We also assume that the citizen's salary and the related additional tax layer only apply to citizens. NB! This possible model is described only to illustrate the effect on wages.

Net+343 vana TM = kogu netotulu, kui standardse tulumaksu süsteem viidaks endisele kujule, st loobutakse maksuvaba osa kahanemisest. 
Näide: bruto 4200, ühtekuuluvusmaks 25%*4200=1050, tulumaks 20%*(4200-500)=740, maksud kokku 1050+740=1790, reaalne maksukoormus 1790-343=1447 (34,45%), neto 4200-1447=2753
Võit-kaotus = kogu netotulu suurenemine või vähenemine juhul, kui tulud (nt töötasu) jäävad samaks, kahaneva maksuvaba tulu lahendusest aga loobutakse. 
Palgasurve. "Kaotuse" vältimiseks tuleks praegust 2100 euro suurust brutopalka tõsta 180 euro võrra. Kuupalka 8400 aga ca 3015 euro võrra. 
Palgakärpesurve. Kui miinimumpalka vähendataks kuni netopalga võrdsustumiseni kodanikupalgaga, siis saaks MP suuruseks 457,33 eurot kuus, MP saaja aga võidaks sellegipoolest 119 eurot kuus.
BP 2020 Net 2020 win-loose BP KP343 Net+343

Net+343
vana TM

584 567 +201 584 785 785
1000 900 +93 1000 993 993
1200 1060 +43 1200 1103 1103
1372 1179 +19 1372 1179 1198
1510 1274 0 1510 1240 1274
2100 1680 -81 2100 1499 1599
4200 3360 -607 4200 2653 2753
8400 6721 -1657 8400 4964 5064
  • minimum wage before UBI – 584 eur/month (2020)
    • foreign citizens amount - minimum wage + UBI amount, paid fully by employer
  • UBI- 343 eurot
    • not a taxable income
    • only for citizens and those foreign citizens which country has also introduced an UBI (not depending on their domestic amount)
    • for citizens from 0 years to teath 
    • UBI is a refund of taxes by its nature (until some income level you get more than you pay)
  • standard income tax 20%
    • allowance 500 euro/month
  • citizen's cohesion tax 25%
    • new tax covering partially UBI
    • only for citizens as they get UBI
    • without allowance, starts from the first euro
  • total tax marginal for citizens: until 500 eur/month 25%, since the 501-st euro 45%
    • we suppose that today's income tax model with the decreasing allowance between incomes 1200 ja 2100 euro/m (with a real marginal of 31,1%) will be rejected
  • real tax burden: paid taxes minus UBI
  • pension contribution 2%
  • foreigner's jobless insurance 1,6% 

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