GST?

Murray, if I squint really hard while reading your article I guess it makes sense. Just forget that the GST, which is now down from seven to five percent, is a highly regressive tax.

full agreement - almost

Except for the main point, I am in full agreement with your article, Murray Dobbin. To further your arguments in your article, all of us should be able to recognise that once the rest of the world hits bottom, Canada's resources will be exceedingly valuable - about 20 years. We have plenty of resources and technical expertise in Canada to take care of ourselves and a good many of the world's poor, if we would just quit giving everything away to heartless, selfish "corporations" and those who run them - international corporations and their CEOs, of course, being the most offensive. And, how can something be considered to be made alive, incorporated, if it doesn't have a heart?

Now to that one point:
The problem is that no one in the constellation of Canadian progressive groups, including national unions, seems willing to take up that gauntlet.... It is long past time that civil society organizations, especially national unions, take up the challenge presented by massive reductions in government revenue.

(Who are these national unions? What are their names, anyhow? How much money has their membership given them? And who are these other goups that help take up the gauntlet?)

Let's not bash the national unions for not doing what you say they should be doing: they have been bashed by the right wingers to near extinction as it is. I do not believe the national unions to be as powerful as you think/claim. And, unless you belong to a large and powerful national union that you have convinced to lead the charge, Mr. Dobbin, you have no right to tell free citizens who belong to their unions what they ought to be doing. The people in unions are not part of "the government". Citizens, themselves, need to band together. If the unions decide to join in great: they have infrastructure that can help in a class war.

Except for you and some of the other writers at The Tyee, where is the press and other media media in this mess? Don't newspapers etc. have a duty to provide unbiased points of view in equal measure. What are your brothers at the Sun and the Globe and Mail doing. Phhhh!

Tax cuts

Tax cuts - especially at the upper end of the scale make things worse. Much worse.

To the point where a billionaire like Warren Buffett could say that the rich are waging class warfare on the poor and the middle class.

Time to change the parameters and get the free loaders at the high end of the teeter-totter to pay their share.

Thanks Murray - you've put your finger on it - and exactly why we can't call ourselves a decent society any longer.

agreement almost - continued

Provincial politics:
Though it was the NDPs job to bring down the Campbell government in the last election, we know that it was the work of the teachers', nurses', health care workers' and government employee's unions that made the biggest dint in the Liberals' election performance. It was those volunteer union people working the phones and contacting the voters that almost created Campbell's "perfect storm". The corporate toadies certainly didn't donate to the NDP. Carole James has done next to nothing to acknowledge, support, or protect the union people who are dedicated to the common good - the ones who very nearly helped her become Premiere. The NDP is the political party with the platform that has traditionally supported the needs of the common person and the disadvantaged. The union memberships have been losing trust in Ms. James. Though I will never be a Liberal, I have given up my provincial NDP membership and quit my donations.

Nationally, where is the NDP? There are three right wing parties, the NDP, and the disorganised Greens that are neither left or right. The NDP should be able to take the day in a federal election with the right's vote being split by the other parties. Why doesn't it?

here's your chance, Murray

A professional journal article that talks about newspaper ownership in Canda being concentrated to a few. Perhaps you and your brothers can take up the fight. We certainly know that the teacher's union put their money and their hearts in the bullseye when they presented their "award" to Campbell for singlehandedly destroying education in BC.

http://muse.jhu.edu/login?uri=/journals/labor_studies_journal/v029/29.2stanger.html

Don't Forget Public Transit

Millions of people across Canada are facing jam-packed buses and trains with winter weather quickly approaching. Not a great way to greet people who are trying to do their part to fight climate change.

In a recent poll, 78% of Canadians stated that their view of Stephen Harper would improve if "... significantly more money was put into urban public transit.

Never hurts to write Prime Minister Harper and your MP know you support more funding for transit and not tax cuts:

Right Hon. Stephen Harper
Prime Minister of Canada

But...

I'm all for cuts to personal income tax. When I lived overseas, and paid virtually no tax, I was able to save thousands of dollars in a very short time- keeping me 100% debt free for three years straight, feeling very secure and confident, and allowing me to save my money how I felt fit (not put in a pension plan that will all be depleted when I 'retire').
I had health care and my rent was half what it is here. I'm not saying I disagree with all the points in the article, but it is very disillusioning to see such huge deductions off each pay cheque. We're simply not getting the benefits here that Northern European countries get for their high taxes (FREE university education, for instance) and so where is all this money going?? If it's not being used properly, bring on the cuts and let people fend more for themselves.

Fii - where?

Fii, where did you live with cheap rent etc.?

More Revenue

Tax cuts produce increased revenue for the government.
I know this fact is hard for some to take, although I don't understand why.
I can only imagine the benefits that will occur once the money starts rolling in.
Perhaps more tax cuts and even more revenue.
Oh, is there any end to it?
The time is here, when government doesn't really need us as a source of revenue in the traditional sense.
We provide a far greater value as being labour that is necessary to run this economic machine.
The Govt. won't take much from us in the future, as we now what taking is in todays context. Royalties and other commissions taken will decrease our pennance.
It's all good.

The problem with taxes..........

........is that politicians treat it as 'free' money and squander it on any vote getting gambit they can.

RAV - costs at least three times more than it should.

Convention Centre - Cost overruns about double of that of the.....

FastFerries - cost double than originally projected.

Needless highways projects.

Blacktop politics.

A pampered bureaucracy.

Even more pampered politicians.

And so on.

Because the people do not have a say how tax money is spent (I do like the American referendum and initiative voting) the only way to curb proliferate spending is to decrease the tax rates.

Until I can vote on how the money is spent, I should pay only the bare minimum in taxes.

Accurate and compelling

Great article Tyee and Mr. Dobbin. I am finsihing the last chapter of Naomi Klein's articulate book Disaster Capitalism, wich I HIGHLY recommend to anyone interested in social justice and global analysis. The neo-con agenda to erase government and collective behaviour and replace it with corporate control is well under way around the world, from Sri Lanka to Russia to Poland to the Maldives. All face inexorable pressure from the IMF and World Bank to privatize, deregulate and diminish government. Harper is an avid devotee of this plutonium club and craves US recognition. Very sad for a "leader" of Canada, a great society built on social justice. Keep up the great writing!

The problem with the

The problem with the business and political elite in this country is that they never look outward on how other countries 'do business'. This country is a joke; we have European tourists who come here and see all our natural wealth and are stunned when they learn what we do and don't do with our natural wealth. To quote a German tourist that I met in Port McNeill 3 summers ago; "Vat, you send your logs to America for them to make it into lumber?" "Are you Canadians really that stupid?" This "New Conservative Government" with their "old Conservative attitude" is driving this country downward even faster.

Murray

To be fair, this money didn't go up in smoke. Some of it (I don't know how much) still stayed in the Cdn economy purchasing McHappy meals and condos. Its not a straight loss of $250 billion. In fact I would only count money that left the country as being lost.

Again, is this what we lost? I'm not so sure. We were led by right-wing governments that entire time. Would they have put that $250 billion into child care and pharmacare and so on? Is there any reason for us to even think they might have? In my opinion, it would have gone to debt reduction and corporate hand-outs at best. In fact, if I had the option of giving my money to Paul Martin and Jim Flaherty or keeping it in my wallet I know which I'd choose.

What we need is to elect governments that care about the same things we do, that will spend our taxes on those things and unfortunately that simply isn't the Conservatives or Liberals.

I appreciate the article though.

When foreign nationals look

When foreign nationals look at moving to countries, they look at income taxes, not things like the GST. If we start slashing the GST and eventually need to raise income taxes, will immigrants with special skills still come calling?

Andrea
http://www.consultantjournal.com

Wrong again, Murray

The same could be said about another misguided article from Murray. Since 2003 government revenues in Canada have increased by $100B, http://www40.statcan.ca/l01/cst01/govt01a.htm
about $7500 more per year is now taken out of the pockets of the average Canadian taxpayer with no appreciable benefit in our quality of life. The problem is not tax cuts, the problem is runaway government spending that robs every one of us of our productivity and the freedom to decide how we want to spend our money……

More of my money

I sure wouldn't mind keeping more of my paycheque. Maybe I could then actually afford to put some money into a retirement plan.

I have to take issue with a national child care program. My wife and I made sacrifices so she could stay home and look after our pre-school-age daughter, while I work at a job that pays ho-hum wages. Why should I also have to pay more taxes so a single mom who's made some bad choices/hooked up with some deadbeat dad can get free baby sitting while she works?

The wonderful thing about taxes.

You can cut them or you can increase them as need(not) be. They never go away.

A concentrated effort should be made to see that our money being collected is not misspent.

Blaming, on the other hand, is just plain unproductive.

NLN

Especially since 2000 the tax cuts have been enormous - especially for high income brackets and corporate earnings.

There simply is no relationship between tax cutting and government spending. To suggest the contrary is pointless - there is no connection.

Tax cuts just make things worse because big government simply moves into deficit financing to keep the pot boiling.

Total US debt - as of today - is $9,080,768,607,099.67

Despite Bush's tax cuts the debt figure has risen every year since the fiscal years ending in 2000 and 2001 when it actually went down.

Aw shucks

There can be no argument that if we were to increase the ranks of bureaucracies throughout the country social distress would disappear and quality of life would increase in proportion to public service wages, benefits and pensions. Governments have proven to be so effective in devising programs and services and so remarkably efficient in implementing them that it only makes sense to strive for a reduction in productivity in order to better provide for enhanced personal and national well-being. A healthy system requires that goods and services be provided to citizens, not purchased by them, and that public administrations at all levels be supported in their worthwhile endeavours by cheerful tax obeisance. The risk of implementation of foolhardy policies by right-of-centre administrations can and should be countered by popular movement to a collective centre-left where an elightened and concerned populace accepts the wisdom of coalescing around a single benevolent Party. We surely know which Party that must be, so for God's sake, and that of his or her children, let's get on with it. Aw shucks, Murray, just wish I could have said it as well as you have.

GJW

Why should I also have to pay more taxes so a single mom who's made some bad choices/hooked up with some deadbeat dad can get free baby sitting while she works?

Having been someone who has had to pull himself up by his own worn bootstraps, I have some empathy for your position. However, it is not the single mom I am as concerned about as her children. If the children's mother can't afford to work, then they will grow up in a house where nobody works. How will they ever learn to value work if they are not exposed to it in their home? The cost of living continues to rise yearly, but the minimum wage stays the same. One way to alleviate the extra burden that continues to be placed upon the poor is to help them afford to be employed.

Not everyone has the strength of character and or stamina that you have exhibited in your life. Let's look to the vast amount of money that the top 5% of the people earn and the few dollars in taxes they pay on that money. They have tax shelters and write-offs that many can't begin to imagine unless they are accountants or are also in those huge income brackets. Those people can afford to have a nannny and then write-off the miniscule wage they pay her while earning her wage through "investments" that are tax deductable because they are creating jobs.

Most posters (except for NLN) have stated that it is time for the wealthy to pay up. They have been stealing from people who work hard (such as yourself) for far too long.

I doubt that you work any less hard than a good number of people (Paris Hilton, Jimmy Pattison, Gordon Campbell), so why should they be wealthy and not you? Do they live a more moral life?

Foreign nationals

When corporations look for a place to set up a branch operation, they must like Canada.
After all the Government of Canada looks after a lot of things that they don't look after elsewhere.
Universal medical care, universal Employment Insurance, universal CPP, OAP pension plans, low taxes, accommodating existing infrastructure.
Canada has it all.
Who wouldn't you want to business in Canada?
Perhaps we have too many other stupid regulations, but these can be overcome.
But not by Jack Layton and his NDP Party.
They still haven't figured out that lower taxes equal higher revenues to the Government.
Can anyone explain how this socialist doctrine is relevant in Canada today, or any day?
I love the position of Dionne.
"If I'm elected I will raise taxes."
When are you socialists going to cry uncle?
Is there any other angle you have to win the hearts and minds of Canadians?

IAMC

Who wants companies from offshore coming in to make money off of Canadians? They don't come here to to make things better. Those multinationals need to be taxed - and more agressively. If they want to sell manufactured products here, they must build them here. If they want raw materials, those materials must have value added before leaving the the country. This is how you get what you need in a world that is moving toward resource depletion. If they want energy, they must pay through the nose. Once the oil and gas is gone, it won't return, so we had better get a good return on the natural resources that belong to all Canadians - the resources do not belong to the oil companies that are making record profits.

Bush

Bush is a socialist. Spend some time reading Doug Casey, Paul van Eeden and Ron Paul. Better yet, go to the Precious Metals conferences they hold in Vancouver and you'll learn more than you'll ever want to know about the U.S.'s bankrupt financial system.

Mr. Casey is a fiscal conservative - a capitalist. Most true capitalists in the U.S. absolutely hate Bush and the Republicans. They've lost it. I spend a fair bit of time in the U.S. - in fact, I write from Austin as we speak. Trust me when I say that Bush is loathed amoung capitalists.

He has increased spending at all levels. His aid (domestic and foreign) packages have far outstripped anything any democrat would table. He has increased social spending five-fold and invested heavily in medicaid.

He has provided the illusion that he is capitalist through his tax cuts which have been financed by increased debt creation and increased monetary inflation. It is a pretty easily sell to most of middle america. Karl Rove will go down in history as perhaps the finest spin doctor.

GW

I give you more credit than that….since (almost) no Canadian jurisdiction is running a deficit the increase in spending is directly related to an increase in revenue. The increase in revenue is rising dramatically faster than the number of taxpayers therefore, us average taxpayers are paying higher taxes now than we were 5 years ago. “Tax cuts” is a misnomer as long as government revenue (and spending) increases at a rate greater than the number of taxpayers does.

And don’t deflect my response on the basis of the range of taxes collected. The majority of tax income is fuelled by individuals regardless of where in the chains it’s collected.

Socialist?

Bush (Dubya) is a Socialist? In a way, I suppose. He's the same kind of "Socialist" that we had in Germany in the 1930's, the National Socialists (also known as Fascists, or Nazis), who collaborated with the industrialists and bankers to create the world's biggest army and invade helpless countries for their mineral wealth.

We called it WWII, and it was enabled by a "terrorist" bombing of an important building (the Reichstag), and led to the Enabling Act (the Patriot Act in our lexicon) which reduced civil liberties and increased the power of the Police State. He then invaded more countries with the Blitzkrieg (which is Teutonic for Shock and Awe).

Sound familiar? There are differences: For example, Hitler was actually a war veteran, unlike Dubya, and he wrote his own speeches. And the alcoholic in Hitler's family was his step-father, not the "leader" himself.

Now, if we can only find a minority group to scapegoat and make them the central focus of all that is wrong, we’ll have it. (Mexicans?)

Other than that, I hear the sounds of George Santayana warning us about something. What's he saying?

NLN

You simply don't understand the tax system - I tried to explain it to you before but it hasn't sunk in. If you're paying more tax on your income now it's because you're making more money...the rates have gone down.

There is no link between tax rates and government spending - as the American example points out in spaces - as to Canada's finances and the situation in the provinces - you clearly don't know much about that either. We're talking about income taxes - not taxes on discretionary spending.

And, you haven't even addressed the US situation where deficits are at record levels, and taxes are, and have been, lower than ours for ages.

G West

You aren't entirely correct:

You can't really use the US as an example. Why? Because the US Dollar is still the world's currency reserve. I bet it won't be one decade from now, but that is another argument. The US has a major trade deficit and its trading partners hold a boat-load of its cash and t-bills in reserve. This acts to artifically decrease the supply of USD and prop-up the dollar. Its trading partners don't want the dollar to devalue because it makes the costs of their exports more expensive.

So, the US can spend, spend, spend and simply create more money! Why, because the other Central Banks are holding the currency in reserve. China owns over 1 Trillion of US Treasury Debt and that is expected to quadruple over the next 5 years.

In Canada, we have a different story. Our currency isn't held in reserve. The more the government spends, the more we have to borrow. We don't have the same type of suitor's for our bonds. The value of our dollar plummets.

This U.S. for now can do both. We in Canada, cannot.

gkam

if you've ever read my posts, i've NEVER talked fondly about GWB. I am not an apologist. The American definition of "Conservative" is different that it is in Canada. Much like the word "Liberal" in Canada carries a different meaning.

I am not scurrying anywhere. I feel like our government, especially provincially, is on the right track. In 20 years, we'll be a vibrant economy with close ties to our Asian trading partners, we'll have cut greenhouse gas emissions, we'll have much improved infrastructure and hydro power generating capacity. we in Canada, thanks to the work of Paul Martin, are in the position of paying down debt, tabling balanced budgets and cutting taxes.

G West

I am always amazed at how you miss the point. NLN isn't arguing that tax rates have gone down. He knows they have.

He is saying that provincial revenues have increased because people are making more money. This is true. We in BC, are making more money than we ever have.

I pay more and more tax every year. I do so because the original tax cuts allowed me to reinvest more. That reinvested income has its own earnings capacity. We were overtaxed to the point it suffocated our capacity to grow our economy. Obviously, you get to a point where each successive tax cut reduces tax revenues. For example, if you ultimately eliminate taxes - your tax income can't increase.

We aren't even close to being there yet!! Bring on more cuts!!

Tax The Wealthy...

The quote from gkam above, simply because I agree with it so goddamn much. :-)

Other than that, the late seventies to the present have been all about shifting more and more of the tax burden from the ruling class onto the lower class stratas. And the consequences of that are all around us in the shattered lives of the poor, the increasingly anaemic public health care system, and the declining availability of public services and the quality of working working class life-, while military and police state budgets are exploding. All of which has been a part of dismantling the "regulated" welfare state capitalism secured by the pre and immediate post war working class militancy.

In its place we are being force marched back in time, by the reconfigured neoconazi "corporatist conservatism" (fascism) to something pre-organized labour and closer to the "every man and woman for themselves" capitalism of the 18th Century Industrial Revolution-, which included forcibly driving the then peasantry from the land and into the new urban slums of the new rising city centres of the nascent capitalist class system.

Continued Next Post

Tax The Wealth II

From Previous Post

To which there is all a certain inevitability as the working class forgets its own class history in the later post-war, and capitalism finally reaches the limits of its potential "progressive" development, over-populating and undermining working class economic and democracy share, over-developing and destroying the planet with the endless growth development imperative built into it. (Being why "the system's" supporters are so desperate, like Holocaust Deniers, denying the realities of global warming and planet systems destruction-, for if it is true, then people really need to more critically examine the assumptions of "popular opinion" that are essentially supportive of capitalism.)

Taxation is, of course, another one of those boot heels with which capitalism endlessly seeks to bear down and sleight of hand increase its share of the economic product of society, and hoodwink the working class. (Remember when 98 cents for a litre of gas was outrageous. Now we think its great. The same essential process goes on around taxation grabs, and then penny cuts to working class taxation.)

When what is need to more fundamentally restore the class share balance in society, if that's what you want to do, and not just rid yourself of the goddamn system once and for all, as I would advocate, then is to cut working class "personal" taxation rates and, at the same time, increase "more equitable share distribution" taxation on the ruling class and their "management/CEO" minions. At least restoring the old "regulatory balance" to the old, now history, postwar Prosperity Period Capitalism. (Capitalism always works better for most, relatively, when it is closely regulated, rather than increasingly "deregulated", as is its current course.)

Because of the new Neoconazi Capitalism's global reach and determination to move forward, I doubt like hell it can at least be easily done, for they will fight like Hell to prevent a reversal to this, I think, by now irreversible course-, but even the "trying" would educate working class folks of that and increase the development of a more revolutionary, or if that word makes you nervous, transformative social consciousness. Also, even if this new, more working class and poor friendly tax regime was successful, the other planetary destruction realities of capitalism would still remain unresolved.

Continued Next Post

Tax The Wealthy Final

Continued From Previous Post

Dealing finally with capitalism, in my view, cannot much longer be put off, in any case scenario. It and the average mentality thinking is still at the heart of the growing global crises, whether we are talking the economy or nature.

Whether we are talking taxation or whatever, the new, actually very old "corporatist conservatism" (fascism) is currently in its ascendancy phase, and likely still has a ways to run. The crash likely only comes after it has exhausted all its potential and naively believable schemes to breathe new life into its own dead horse carcass. It is the valuable role that the neoconazis are playing for us revolutionaries and serious social reformers currently marginalized on the sidelines. :-)

Bring it on. [OFFENSIVE BARB REMOVED. -MODERATOR.]

Re: More of my money

Quote: "...Why should I also have to pay more taxes so a single mom who's made some bad choices/hooked up with some deadbeat dad can get free baby sitting while she works?..."

Your argument is cyclical - the single mom's choice would not be a bad choice if child care was funded. And...what if she's single not by choice but because the baby's father has died, or was injured in a car accident and cannot work? Should a civil state not support her to make sure her child does not grow up to become a criminal, possibly dating and getting your underage daughter pregnant?

And...deep down, I wonder if your wife resents you for making her give up her job to raise a kid?

The system is not the problem

It's the incompetents that run governments that are the chief source of all our tax woes. Tax rates can be adjusted up, down or sideways and you will still have inequities if the money is not spent properly.

A flat tax or fixed proportionate tax may sound like a panacea but a new system, alone, will not solve any of the problems that you so strongly identify with. Clear goals and good fiscal management are the only way to ensure this. A more equitable tax system could still be achieved but would not require a full system overhaul to bring it about.

Any method of simplification would sure make life easier at tax time though, no doubt about that. The accountants and tax lawyers would also have to find work elsewhere which could be a bad thing.

Continuation of the Canis Latrans' line

Not only are the poor being taxed, it is the wealthy who are awarded government contracts for fighting wars: providing arms and fuel, etc. It is the wealthy who our current provincial government develops P-3s, or awards contracts to build and maintain highways, hospitals etc.

Case in point:

The company that maintains the Coquihally was struck by its grossly underpaid and overworked employees. Practically nothing got done over the summer - the roads are in terrible shape, but the government continued to pay the company its regular monthly check. The workers suffered the loss of income, but the company continued to receive income and yet had very few expenses. That same company just announced that the purchase of several millions of dollars worth of new equipment.

I can't help but believe that we paid for that equipment with our gasoline taxes and tolls charged to us. Even if that company does not get the contract in the next go around, it will have the equity in the brand new trucks and plows.

A proud Global TV announcement of the purchase was made. The company said it bought it so they would be sure to keep the highways open next winter and not get fined like it did last year. That fine last winter cost the company nothing: they didn't give their employees the usual Christmas bonus. The employees hadn't been called out to keep the roads clear, or they would have been cleared. Someone in management let the snow build up and the emplyees paid for it with their bonus. Also, in the past, they have too few empolyees on the payroll, so they end up working their drivers to near death driving plows for countless hours in hear-blizzard conditions. No wonder they struck.

It must be noted that during the strike, the top mechanics left the company to take better pay elsewhere. The company had no decent mechanics left to deal with aging equipment anyway.

Cappy

S'funny, my economics text defines consumption taxes (GST) as marginally regressive, in that the the ability of the poor to pay them is less than that of the rich, even though the abolute amount charged is the same.

In practice, in Canada, GST is not charged on necessities such as food and rent, so the poor, in practice, receive significantly less benefit from a reduction in consumption taxes such as GST than do the wealthier, as they spend a higher proportion of their income on those necessities.

Here, I'm with Flaherty. Yves Fortin's argument against the change in rules on taxes amounts to "You [Revenue Canada] weren't collecting very much from corporations in income taxes anyway, so why alter the rules now?"

The excessive mobility of capital is one of the conundrums of our modern society. It acts antithetically to the aims of a just society (regardless of how you define that) by maximizing selfishness. If corporations were ethical creatures, they might not mind so much paying taxes in order to support a just society (this might more truly be the example that neocons have been looking for to support the notion that "a rising tide lifts all boats") so that all could profit, and create more wealth for society....da-da...da-da.....da-da.... you know the cant.

Instead we've been trapped into this scarcity model of reducing taxes to reduce services, so we can keep a little bit more of a little bit less total wealth, so we can reduce taxes, so we can reduce wealth...da-da....da-da...da-da....

And the psychopathy of corporate structure is the greatest barrier to Jeremy Bentham's utilitarian model "The greatest happiness for the greatest number of people". I'd truly like to get rid of the irresponsibility of the corporate structure, and make everybody personally accountable again.

Any problems with that?

Ideology

This is the typical leftie mantra, that taxes are good so the intellegencia (namely them) can spend it for the Good of Us All.

As pointed out above, Canada has faced some pretty serious tax hikes in the last decade. We now have a situation where wages are rising at twice the rate of inflation and unemployment is at a 33 year low. With the balooning surlpluses various governments have no excuse but to give some back.

We can wail about the "poor" and the rich not paying, but a family of four making less than $40k a year receives more in benefits than they pay in income tax. That is almost completely financed by people making more than $80k a year.

That is fair. While I do not agree with the GST cut, which is simple populism, the government did reduce the two lowest tax rates, raised the personal exemption retrocactively and introduced a $2000 credit per child.

Next Wednesday, there will be only one leftie government left in Canada. I am sure it all a "neo-con" conspiracy.

People are working, wages are up the stores are full of people buying, something must be going OK for most people.

short-term thinking

Is Working Man taking credit for successes of previous governments? Looking at things short-term does not always show a true picture, especially in a system with many variables, most of which take years to change and stabilize.

I suggest that instead of looking at whatever short-term measure that supports your view, you somply look at history.

Perhaps Mr Working Man would lie to cover the $10,000,000,000,000 bad debt run up by his fellow conservatives in the US.

NLN

No siree, Bob! We need accountability on the part of government. I think his eminence Mr. Harper promised such a thing.

Flat Tax Is The Way - and no discrimination!

A set percentage (say 5%) on gross income (means no deductions of any sort) of all citizens, regardless of income. And this would include corporations, which very much like the notion of being considered an "entity".

I could give some examples of how this would ultimately put more cash in government coffers, but it's fairly easy to work out, for those who care to.

Proof is in the pudding!

I have not much to add, but need to point out that the present state of the US economy proves exactly that they were on the wrong track!
All these history lessons we read here merely explains how it happened.
With luck we can ditch Harpo before he gives the country away?

no flat tax

The flat tax implies a flat or level playing field, while we al know there isn't one. For example, none of us had a rich and very powerful Daddy to put us into Yale, the Governor's Mansion in Texass, and the White House, let alone get us those sweetheart deals that got Dubya sole access to offshore drilling in Dubai (Arbusto, his first failed company).

Progressive taxation works because it reduces the natural advangages of the rich in connections and the ability to find professionals to work all the angles for them. As, as we have seen, it hasn't stopped the rise of billionaires, has it? Maybe it's not progressive enough.

Don't fall for the regressive flat tax - it's another right-wing talking point, like exemption from estate taxes.

These tax cuts are great!

The household savings my wife and I will realize has allowed us to book the trip to Cuba that we have always wanted. Further, we will be using our tax savings to take advantage of our current economic strength by taking extra trips to the USA for some bargain shopping.

Sweet!!!

In all seriousness, the country should be using this revenue money in much more progressive and creative ways than a simple tax cut.

The dollar

First, I don't think any of us would dispute the point that Canada is a trading nation.

However, let's face it, a lot of us are suffering from the suddenly high dollar. Logging, manufacturing, exporters of all types. Lots of businesses and workers are taking it on the chin.

Seems strange in a time of a growing economy to talk of job losses but that's the effect the currency is having. Many exporters are just hanging on.

Canadian consumers benefit from the high dollar in general and it'll be interesting to see if those benefits outweigh the losses caused by the currency rise.

My own feeling is that its a good thing the gov't finances are in good shape. And its of great interest to note that most job gains are currently in the public sector.

However, if the dollar continues to rise there's going to be a lot of ex-business people and their workers looking for new jobs and I don't think that there will be enough public sector jobs to take them.

On the other hand, baby boomers will continue to retire and their jobs will come available.

Only the future knows how it will all work out.

To: Sharing is good~

I lived in Taiwan for three yrs. Yes, it is true Asia isn't for everyone, and you have to teach or be an engineer to find work outside the big, more expensive cities, but it grows on you. After a time all I really missed were friends and family (and they weren't about to join me there :) and clean air. That's really all, ha. I had a good life and lived debt free and comfortable. I've been back here for several years but I still miss it often. I miss little things like pulling up to a fruit stand on the side of the road and having the guy blend me up a fresh juice on the spot, for $1.50. I miss the ordered chaos and the lack of rules, and I really miss my cheap rent!

I think our tax system is great, in theory, but there is not enough input from us citizens as to how to distribute that money. I'd like some of my tax dollars to be going to the guy on Pender who begs me for a coffee everyday, because you know what? I would gladly buy him one EVERY day if I didn't have such huge deductions coming of every cheque. Why is he on the street? I'd like to see some of my tax money going to support the SPCA because if I had that money in my own pocket that's what I'd do with it (well, I donate anyway). Our society is too controlling, and I don't think our tax money is managed as effectively as it could be.

capitalist dollars to cuba!

I find it very ironic that Tbarnston wants to take Harper's capitalist kickback dollars so he can burn buckets of jet fuel to enjoy Fiedel and Che's utopia, then spend the rest to help prop up the American greenback - not funny, just ironic.

Gkam

As just a simple example of why I think a flat-tax will not be regressive, would be the banks. Imagine how much tax a bank would have to pay, if it paid 5% of it's gross.

Also, a flat-tax wouldn't need hordes of accountants, tax lawyers, or civil servants. Speaking of myself as a self-employed person (corporation or not), I collect a cheque from customer, send in 5%, and voila! -- done deal. And it really wouldn't matter at all what my expenses were or weren't. The ONLY thing that mattered would be that gross........

Can't see the regressiveness, quite frankly...........

Yes, Fii warmer climates are cheaper

You know, A number of years ago, I lived on the Big Island for most of a year. I found cheap rent and good cheap food. What I also found was that most people weren't in my income bracket. Most people couldn't afford the things I could afford, but they could still have a good life beause there were no mosquitos and all that most really needed was a few groceries, a thatched roof, and some bartering skills.

In cold climates like ours, everything costs more, and we must build and maintain warm housing, an infrastructure, and have an education system that allows a society advanced enough to make it through winters without living like peasants. That infrastructure takes tax dollars. That infrastructure is falling apart and the wealthy are sucking us dry using whats left of our legacy from the 50s, 60s, and 70s.

Now is the time for the government to be investing in a national high speed rail. Now is the time for the government to be training more doctors and developing the health care facillities we will need when the boomers are all 60+ years old. We need to develop community gardening plots and low polluting transportation systems. We need our government to develop, train technicians, and make readily available alternative energy sytems and off-the-grid systems so that average Canadians (who won't be able to afford their own oil and gasoline manufactured from their own tar sands) can be self-sufficient and keep this country strong well past the age of oil.

RickW

As I mentioned in my post above, I wasn't addressing business income and/or corporate taxation - just personal employment income.

I think most flat-tax proposals tend to focus on that category and it represents the majority of income earners. I understand where you're coming from as a small businessperson and I appreciate the advantages of such a system for its simplicity.

However, given the vast differences between the types of enterprises and the various cost and overhead variations that would exist between types of business operations I can't see how it would be possible to simply arrive at an amount (you've suggested 5%) that would be appropriate for all types of businesses.

This would be especially problematic for enterprises that are price takers and not price setters - farmers, fishermen, that sort of thing and also pretty difficult for retailers who operate on a very low margin and make their profits according to the number of times they can turn over inventory in any given period.

And, it would be very difficult for new operators to enter an established field if there were no longer any way for them to amortize their capital costs - this would mean that the costs of entry into any particular field (especially one requiring capital equipment and plant) would be out of the question.

My objective really, in terms of tax reform, is to attack the inequity of the current system, which has led, and is leading to more and more inequality between high-income earners and the poor and the middle class.

In the end, if one were starting a new country with a totally new economy from scratch, it might be feasible to set it up with a flat-tax structure. Given that we're already in the middle of the game, I don't think it would ever work - Former Eastern Bloc countries that have established flat tax regimes don't seem to have been all that successful either – the temptation for corruption was just too great.

Smart and Dumb Taxes

Yes some taxes are essential to civilized society, no question.

But some taxes have heavy unpleasant side effects, and others do not, or at least have less heavy ones.

Over-reliance on income taxes is dumb. Taxes should be shifted to a significant degree from income to resource depletion, pollution and consumption.

The correct role of income tax is simply to correct such social regressiveness as may result from those depletion, pollution and consumption taxes, not to carry most of the burden of raising revenue. We can't live without income tax, but we shouldn't depend so heavily on it.

Our present system relies far too much on income tax, perhaps, because the politicians and voters are too preoccupied with the "income effects" of taxes (which are obvious) and all too often not economically or ecologically aware enough to notice the disastrous "substitution effects" of inadequate taxation of depletion, pollution and consumption in general, as well as of the "dedweight costs" of income taxation.

Hopefully, awareness of the potential for tax shifting to "smarter taxes" is growing.

Michael Barkusky

Taxes, Economics and Politics

Reducing personal taxes and some corporate taxes will in certain circumstances increase economic activity and thus the overall amount of government revenue. Grow the pie so everyone's slice is larger.

At the same time giving government more money does not always result in more or better services. Politicians love stuff like convention centers and Olympic Games and fast ferries. So the argument for raising taxes, or at least for not lowering them, has to claim that politicians will spend my money more wisely than I will. (And, yes, there are neighbourhood effects and free rider problems; but it is at the margins where politicians waste the most money.)

The problem with left wing parties in this mix is that they have become beholden to public service unions. Which means they have little incentive to run lean or efficient governments. Similarly, within the public service where there is no profit and loss discipline, executives' status and influence is measured by the size of the budget and the staff they manage.

Unfortunately, even with this most recent round of tax cuts, the CPC is still committed to keeping government size constant relative to GDP which means that government will grow 3-4% this year for no particularly good or bad reason.

As usual Dobbin treats us to a "progressive" shopping list of what our foregone tax revenues might buy. An alternative list: significantly expand and re-equip the Canadian Forces, create a fully mobile, rapid deployment, special forces arm (no more Rawandas or Darfurs), fund basic scientific research, create Federally funded competitive scholarships to universities, create a federally funded initiative to fully examine the "science" underlying "global warming" (hire Steve McIntyre as the program director), fund the creation of an "Anglospheric alliance", provide increased funding for the trade side of External Affairs.

However, long before we get to either shopping list, it would make a great deal of sense to alter the existing incentive structure in the civil service, both federally and provincially, so that managers and workers are rewarded for doing much more with a little less rather than simply building empires which grow at the rate of the GDP.

At that point paying tax would look less like throwing money away and more like vlaue for service.

I don't think so Jay Currie

No it wouldn’t.

These are clearly the words of someone who doesn't know much about the provincial civil service.

I haven't been associated with the feds for a while but the provincial service is lean and mean and squeaky clean... No one - apart from a coterie of OIC appointments - is doing anything but working harder and longer than at any other time in the past 25 years. Civil servants up to the deputy level wouldn't even consider doing anything but pay for their own meals at office lunches.

You're already getting fantastic value for your money - the product often suffers because various ministries are horrendously understaffed - but that's another question entirely. As for incentives...these people just want to do a good job and keep doing it - and be paid fairly for it. There's no need for incentives of any kind – in fact, they would be a really BAD idea and interfere with true professionalism.

I hope someone will bring us up to speed on what's happening at the federal level.

federal money -doing work

One of my best friends works in Ottawa for the Feds: Human Resources Canada (formerly Canada Manpower). If ever there was a place for possible corruption or mismanagement, this might be one of those places. I can only speak for my friend and the people he manages, who in turn, manage people who deal directly with applicants for training and work experience projects. I have never known a more honest, insightful and caring individual. He has survived years of cutbacks, downsizing, and changing from paper-driven to computer-driven accounting, collecting and information distributing systems. He, like anyone who works for a new boss, has had to shift focus every time a new party sets new polices and priorities. He hates to waste any taxpayer money and he makes sure that his middle managers are keeping their frontline managers in line.

Nearly everything is done via email and video-conferencing. A flight to anywhere means that someone has made a screw-up with taxpayer dollars, and they will probably be canned. Those flights never happen. In the past, nearly all of the money he dealt with went to private companies putting together training programs for employees or communities who are building structures that will employ people for the common good - like community centres with daycare, health and wellness iniciatives. Some funding supports public institutions that develop programs for retraining unemployed millworkers, miners, auto assemblers etc.

These are vital programs that he has spent your money funding. Driving a wedge down a vein not far from MBCGA's, it is a shame that the heartlss corporations that amass capital through extracting or manipulating our country's biological and geological resources don't consider it their responsibility to retrain these people whose sweat has made their fortunes - but they don't. Therefore, we must do something, as the sooner we put the workers back to work, the healthier they and their families will be and the less EI (that has been overfunded and robbed from for years) and possibly welfare will be spent on them. You know, The old teach a man (person) to fish... adage.

Jay

Unfortunately, it never happens that "everyone's pie" gets bigger. Instead, any increase in the size of the pie will go to those who already own most of it. Anything else would be assailed as being a socialist plan to "redistribute wealth".

The problem with right-wing parties is they are so closely tied to the managerial class of business. They have no incentive to change how business works and therefore the goals of business remain focused on profit as their role as citizens declines.

The day when right-wing parties are not so closely tied to business has not yet dawned and therefore we live in a situation where nobody cares about the public good. On the one hand you have business itself which is focused on profits and to whom the "public good" is nothing more than a phrase that means taxation and on the other hand you have right-wing governments that think handling the concerns of business is in fact the public good.

Its why we're in the mess we're in and why disbelieving climate change and poverty is a growth industry requiring thousands of individuals employed in think tanks trying to prove they don't exist.

G West

I suppose what I am driving at is equitability. What I am also driving at is some mechanism whereby the tax base cannot be "fiddled" with. I object to the use of taxes to encourage and/or discourage certain areas of the economy - to allow governments to do so only invites corruption.

Given all that, were this country to adopt my version (vision?) of a flat-tax in one go, yes it would prove disasterous. But to gradually head that way..........? I think it could be made to work -- notwithstanding governments' universal animosity towards making inroads in this particular powerbase.

RickW

I'm not adamantly opposed to eventually moving in that direction. What I'd like to start with is the adoption, with whatever changes are necessary to bring it up to date, of the Carter Royal Commission Report on Taxation from 1966. By not adopting many of those recommendations then, we set ourselves on the road, ultimately, to where we are now with increasing concentrations of wealth in fewer and fewer hands AND the growing power and concentration of large commercial entities to the detriment of new start-ups, real competition and small business.

The 1966 report asserted that fairness should be the primary objective for the taxation system; Carter concluded that the system was too complicated, inefficient, and under it the poor paid more than their fair share while the wealthy avoided taxes through various loopholes.

The report said that the same tax be levied on increases in economic power of the same amount no matter how earned - Carter put it this way, "a buck is a buck." Had the recommendations been implemented nearly 50% of taxpayers would have their taxes reduced by more than 15% the upper 10% would have faced increased tax liabilities of more than 15%, the remainder would be about the same. The wealthy - although they would pay more tax - would no longer require all the expensive expertise to get their deals and the whole system would have been much more efficient and simpler.

Opposition came from some provincial governments, the oil and mining sectors and some business groups - especially banks and financial institutions. The Trudeau government retreated from the 1969 White Paper supporting implementation and the chance for reform was lost. The new Income Tax Act when it came out was full of special exemptions and incentives - exactly the kind of thing Carter had criticized.

It even removed the federal Estate Tax Act, which had (prior to than) been a brake on increasing concentrations of wealth in the hands of the few.

I came across a 1990 thesis from a McGill prof named MacCrae that you might enjoy looking at.

It addresses the agriculture industry primarily but it has some interesting things to say about taxation and tackling corporate concentration as well.

This is a link to the most applicable section:
http://www.eap.mcgill.ca/rod_thesis/rod_53.htm

On Pies

"Unfortunately, it never happens that "everyone's pie" gets bigger. Instead, any increase in the size of the pie will go to those who already own most of it. Anything else would be assailed as being a socialist plan to "redistribute wealth"."

At the moment in Victoria where I live there are signs in every second window looking for workers. Much the same is true in Vancouver. As the economy grows people who want to work can. And if they work hard and learn they move up.

For people who cannot work the growth in the economy means that governments and charities have more money to help. But, if an economy grows at a steady 2.5-4.0% a year, the non-workers will be reduced to a hard core of people simply incapable of working. And, if we allowed people on Social Assistance to make more than the paltry $100 a month (I pray this has gone up but doubt it) they are allowed to currently, even the hard core might be able to pick up 10 hours a week.

Preferring market outcomes to governmentally mandated ones is more about efficiency than a particular love for business and its managers.

What is going to be interesting in the next decade is to see what happens in conditions of labour shortage. The old solution was to turn on the immigration tap; but many of the sources of desirable immigrants are closing down because of demography and economic growth. If we continue to see significant economic growth, and there is no reason why Canada shouldn't, we are going to have to learn to work smart and pay people decently.

With luck that should go some distance towards reducing the inequalities you are concerned about.

Jay

That's an anecdote that would be great if I was arguing there were no jobs here. My concern is that we've been chasing this idea of "growing the pie" for years yet although the pie has certainly gotten bigger, those at the high end of the wealth bracket seem to be the ones enjoying all that growth. I assume you don't disagree on that point?

Agreed, as boomers exit the work force (which they've begun to do now, hence many job openings) things will get interesting. I can't say I know how it will turn out, too many variables. As I've posted up above however I think the rise in the currency will have a negative impact on the job situation.

A plethora of jobs, if it continues, will certainly help the street-level inequalities between middle class and below. I don't expect it to make a difference between the top 5% and the rest of us.

jay : Oil and currency

From this link

http://www.nytimes.com/2007/11/04/magazine/04oil-t.html?_r=1&ref=magazine&oref=slogin

Suffice to say I quoted it because I tend to agree, the tar sands will not make us rich, it may in fact make many of us poor.