Impact on the salaries

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

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% 

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