Introduction. The high tax burden on labor is a problem not only for Ukraine, but also for many European countries, negatively affecting the labor market, in particular, it is considered one of the reasons for relatively high unemployment and informal employment. In Ukraine, it is proposed to solve this problem by consolidation the unified social contribution(hereinafter-USC) and personal income tax( hereinafter-PIT)(in fact, by abolishing the unified social contribution). Problem Statement. Despite the fact that the implementation of this proposal is associated with serious fiscal and social risks, it has not been the subject of scientific debate, although it was first published in Ukrainian periodicals in 2018-2020. Purpose. To assess the abolition of the unified social contribution in the context of compliance of such a transformation with European guarantees of adequate social protection and the European social model in general. Methods. The methods used are comparative and statistical analysis, abstract logic, analogies and theoretical generalization. Results. It has been established that, unlike the proposal to consolidate USC and PIT in Ukraine, the implementation of which will lead to a decrease in the living standards of people who have already retired and will receive a minimum income from the state budget, which will be able to protect them only from absolute poverty, and reliance on future pensioners-participants of private pension funds of all risks related to their provision after termination of employment, principle 15 of the European Pillar of Social Rights emphasizes the right of older persons to adequate pensions and a dignified old age. The importance of achieving this goal is evidenced by the fact that every three years, the European Commission publishes a report that reviews the current and future adequacy of old-age incomes in EU member states in three dimensions – poverty prevention, ability to replace income received before retirement and retirement duration – and analyzes key reforms aimed at ensuring the financial sustainability of pension systems. Such reforms are carried out in two main areas: revision of social contribution rates and expansion of financing from general government revenues, in particular, property, consumption, and environmental taxes. Conclusions. It has been found out that the abolition of USC as a stable source of financing the social insurance system in Ukraine will result in either its erosion or complete dismantling of the welfare state. This may complicate our movement towards the EU due to the inconsistency of Ukrainian approaches to solving social problems with European ones.
