Finland attracted international attention when they announced plans to run a pilot program to test the effectiveness of a basic income for citizens. The country is now scrapping the plan altogether, admitting it was a failure.

The program paid 2,000 random unemployed Finnish people a monthly check of €560 ($685). The payments will continue until the end of this year. A report by USA Today was used for all of the information provided in this article.

Good intentions

The pilot plan called for paying citizens who could not find work, regardless of whether or not they were actively seeking employment.

The idea was that the extra cash would help people while also contributing to the economy as a whole through purchases and innovation. A big hope was that the financial relief would spur job creation as people would be less averse to the risks of starting their own business.

However, a study by the Organisation for Economic Co-operation and Development called into question the many flaws surrounding the plan.

For starters, a 30 percent increase to the income tax would be needed to fund this program if it were to be launched nationwide. This type of tax increase, in a European country that already has high taxes, is just untenable. They suggested that moving to a credit-based system could be beneficial and feasible though.

The premature scrapping of the plan in whole, though, likely means that this issue is dead in Finland for the foreseeable future.

Could this plan ever work?

While it is a popular plan among the low income or unemployed, Basic Income is something that is incredibly difficult to implement. Taking care of the less fortunate is something most would agree is the right thing to do, however, how to do it is where the disagreements begin.

Any plan that would drastically increase taxes is almost always sure to fail. Convincing people to chip in extra for the other guy has to be a subtle negotiation. People want to feel like they are helping, while also not hindering their own situation.

In Alaska, they have a sort of basic income that comes from the oil revenues.

Residents of the state receive a yearly payout as part of their share of the state's oil sales. As you can see, the funds for the plan come directly from oil revenues so there is no need to increase taxes. The amount isn't enough to live off of but it is a nice bonus for those living in the harsh Alaskan conditions.

The rest of the United States has debated extensively as to what a basic income plan would look like at home. Without raising taxes sharply, though, other entitlement programs would need to be eliminated.

There may be a perfect balance of a basic income and how to fund it. We just haven't see it yet.

Don't miss our page on Facebook!