PROBLEMS WITH 130-YEAR-OLD SYSTEM
• Leads to a reduction in production throughout the economy due to the limited effectiveness of state services compared to countries with fewer state services like Switzerland, the USA and countries in Asia
• Creates a government bubble that will reduce effectiveness even more and cause economic backwardness in the long term (high number of laws created, populism and ignoring the principle of subsidiarity)
• Increases citizens' learned helplessness and lack of skills in a market economy – no socialist state has ever been able to maintain competitiveness with other countries
• Distributing wealth as helicopter money based on averages is not solidarity
ECONOMIC EFFECTIVENESS
• Low effectiveness of state services (education, healthcare and social security) based on a centralised command economy:
o "free" services are used more than necessary
o services also go to people who don't really need them for free
o If the money doesn't belong to the client or the service provider, neither party pays attention to the economic effectiveness of the process
o The decision-making rights and money for developing the service both belong to the state; the citizen has neither. Therefore, the client cannot shape the service in accordance with their local and actual needs. The citizen avoids criticism, because it may result in the procurement of the service becoming even more difficult. The client lacks the incentive to limit spending and innovate.
CREATING A DIGITAL SYSTEM OF SOLIDARITY
• The distribution of wealth through services must be replaced with the distribution of wealth through money
• Labour taxes will be redirected to citizens as an addition to their salaries and they will pay around 50% of this additional amount to the state as a "citizen's tax"
• The Ministry of Social Affairs' distribution system will put this money in transparent bank accounts for people who need help
• The recipients have the right to decide how they use the extra money (but the purpose of their use will be pre-determined)
• People who are able to work can buy the services they need with the addition to their salary
• The state will continue to provide healthcare for all citizens
BENEFITS OF DIGITAL SYSTEM OF SOLITARY
• Economic efficiency. The freedom and resources for citizens to make their own educational, healthcare and social decisions within the free market will provide them with the incentive to be economically efficient, take responsibility for their choices and learn to overcome their mentality of dependency. Citizens are more resourceful and economical with their own money than with public money.
•
Reduced state bubble effect. Balancing voters' wishes against
opportunities. With the new system, a citizen's desire for goods is balanced
against the economic considerations of whether the goods are worth the money
that would have to be paid for them. Citizens are better able to make these
decisions than the state. If a citizen needs a carer to help them with these
decisions, they must need a carer now as well.
• In time, an effective distribution curve meeting the needs of the people will form. Estonia could become the first country in the world to de facto eliminate poverty.
• Flexibility in terms of time and size. Algorithms can manage distribution according to actual needs in seconds rather than years. The algorithm itself will be approved by a democratically elected government.
• A radical increase of the tax base. Officials and state service providers can move from state expenditure to state revenue, into the private sector, as actual tax payers.
•
New private sector businesses will hopefully export more than
state service providers are currently exporting due to the lack of incentive.
• Businesses will perceive a reduction in their tax burden without harming solidarity in society.
• Net wages will grow significantly (ca 20-25%) and citizens will feel wealthier because they have a larger amount of money with which to make decisions.
• Private limited companies will decrease in number and nearly half the black market will disappear, ca 50% of which constitutes tax evasion. GDP will increase by 5-10%.
• People who actually need help will receive more, because less money will be spent on the process of distribution and distribution will be better suited to their needs.
ACTION PLAN
• An agreement between all parties for reforms
• An expert group approved by the government which includes people from all sections of society and leading experts to develop the first algorithms for distribution and continue improving them thereafter
• The government will approve every change in the algorithm in order to ensure just distribution
• Voter pressure is necessary for influencing parties – the majority of voters must understand that change is good for everyone