Election 2015

[Infanteer]

Based off of 2013 taxes, if you implemented a 15% rate with a 17k BPE, the government would have collected around $82 billion in income tax, which is ~50 billion dollar less revenue than was collected ($130 billion). In the grand scheme, the Feds revenue was $271.7 billion, so this would mean only around $221 billion. The real question is, given $50 billion dollars left in the hands of the taxpayer's, how much revenue would be collected the next year? It's impossible to calculate, but certainly if $82 billion was the *worst*, revenues would start going up with that much money left in the hands of the consumer.

So, yes, a flat tax of 10% by the numbers (obviously people will change behaviour to suit a change in taxation conditions) comes close to generating the same amount of revenue if you ignore all the credits (closer if you disallow all the deductions as well).  Of course it also bites into the after tax income of many of the 1/3 of filers who file non-taxable returns*.  What is inescapably true is that it requires a sudden and large shifting of a tax burden away from people who can afford it to many who cannot.

Would the loss in revenue by movement to simple, flat income tax be counter-balanced by a single, higher consumption tax (since the gist of many of our discussions focus on consumption taxes being the most effective out of the four types)?  Perhaps 10% flat tax with high BPE and a 10% GST across Canada?

 

[JS2218]

Not only is that quite a leap, it's missing the point. The government has *no business* telling you how to live your life. By giving tax breaks to some people based on their choices, it is encouraging people to make certain choices in line with their own view, and doing it by making the tax burden higher for someone else who they disagree with. Even worse, its using other people's money to do this.

This is where conservatives and libertarians disagree. Canada has a naturally shrinking population that is only being maintained and slightly increased through intensive immigration quotas. We're replacing our dying Canadians with non-Canadians. The Government, in my opinion, does have a role to play in encouraging Canadians to have more kids so that we can regenerate our own population and rely less on immigrants. Others have already stated the benefits of having more children: more money spent in the economy, a new (eventual) taxpayer has been born, and so on. The Government is trying to make it attractive to have children so they can benefit our country.

 

[Brad Sallows]

>Would the loss in revenue by movement to simple, flat income tax be counter-balanced by a single, higher consumption tax

I don't know if it _would_ be, but it _could_ be.

Before 2000, federal rates applied to three income bands at 17%, 26%, and 29%.  Over the next 8 tax years those changed to 15%, 22% and 26%/29% where 29% used to sit (Wikipedia source).  My provincial income tax rates used to be higher.  And I remember the good old days when we paid surtaxes on our federal and provincial income taxes (you calculated your f/p tax payable, and if they were high enough you had to pay some more).

GST has dropped from 7% to 5% (2006 and 2008).

Corporate income taxes have dropped, but those only concern me indirectly as a very minor shareholder.

The point: a succession of federal governments of the two parties that matter have, in principle, created some room for tax increases.  While I would prefer not to be taxed at higher rates, what I find most objectionable are these:
1) Federal parties playing coy and refusing to be rigorously specific about which taxes they will increase, and buy how much, before they are elected.
2) Provincial governments whining that the federal government should transfer more money to provinces (ie. feds take the heat, province reaps the goodwill).  If a province wants more money, it can use the taxation space vacated by the feds.*

*Harper is Wynne's best friend.  He reduces taxes and leaves the space to be occupied.  If the NDP or Liberals govern and raise taxes, their first priority is going to be their own plans.  They won't shovel money at Wynne, and some of that tax space will be gone.

 

[Brad Sallows]

Here is why child-raising parents deserve taxpayer-funded support.

One day you may live to be old.  You will need services.  Those services will have to be provided by people younger than you.  Someone will have paid the costs of raising, and perhaps educating during the early adult years, those service providers.

Are we going to have a two-tier system in which all former parents get first dibs on the availability of services for which demand exceeds supply?

 

[ballz]

Would the loss in revenue by movement to simple, flat income tax be counter-balanced by a single, higher consumption tax (since the gist of many of our discussions focus on consumption taxes being the most effective out of the four types)?  Perhaps 10% flat tax with high BPE and a 10% GST across Canada?

I like what  you're thinking, and yes, a consumption tax IS more efficient than an income tax. Unfortunately, the GST only represents 11-12% of revenues and the income tax represents close to 50%, so trying to completely offset the income tax using the GST could result in a large increase to the GST (you'd basically have to triple the GST to make up an extra $52 billion of revenue). While it is more efficient by the book, it would be hard to sell politically. It would mean the poorer people are sharing more of the tax burden (because income tax is only paid by those making above the BPE, and GST is paid for by everyone) and it would harm some industries such as tourism.

The good news is, going to a 15% flat tax with $17k BPE, although it would represent a decrease in revenue in the short term, it would certainly not remain as a $50 billion shortfall. After unloading things like healthcare from the Federal gov'ts responsibility, if the budget *is* still in deficit, what I'd like to see more use of in order to get into a surplus budget at that point is more use of user fees. But certainly, a small increase in GST would be more efficient than income tax.

Here is why child-raising parents deserve taxpayer-funded support.

One day you may live to be old.  You will need services.  Those services will have to be provided by people younger than you.  Someone will have paid the costs of raising, and perhaps educating during the early adult years, those service providers.

Are we going to have a two-tier system in which all former parents get first dibs on the availability of services for which demand exceeds supply?

Which services are we talking here? The fact that we have even set up things like the C.P.P. where we incur unfunded liabilities, which is being paid for by people working *now*, instead of already having been paid for by people while they were working, is just a good example why the government can't be trusted to run anything. It is not at all acceptable that my grandfather paid into his pension his whole life and now there is no money to pay him his Old Age Pension so the current working generation is paying it to him, not able to invest in their own pensions, and have to *hope* when we are 65 to Dead that the working class at that point in time is productive and able to pay us.

I don't need someone else's kids to look after me when I'm older. I need the government to stop taking so much of my money from 16 - 65 years old so I can look after myself when I'm older. If the government stops forcing me to depend on it for everything, and I screw it up and can't look after myself when I'm older, then that's my problem.

For the record, I do plan on having kids. I don't expect taxpayers to raise my kids for me, or pay for their eduction, or their daycare. Stop making me pay for everyone else's kids, often in ways I don't support (aka paying the majority of someone's basket-weaving degree), and I'll have no problem raising my own in a manner that I do believe in.

 

[Infanteer]

Which services are we talking here?

I think Brad is saying that elderly folks require a social/medical network that is funded by the working taxpayer.  Parents have invested in that net by creating/nurturing/paying for taxpayers.  Not saying I agree, but just how I read the statement.

 

[Brad Sallows]

>my grandfather paid into his pension his whole life and now there is no money to pay him his Old Age Pension so the current working generation is paying it to him

Pensions were never "paid into" as future investments.  From "go", the system relied on current workers contributions to pay retirees (the first recipients had not contributed anything meaningful by a long chalk).  That has changed a bit with pension reform, but broadly the system is still a Ponzi scheme.

I don't mean the future generation as taxpayers (although that is necessary as just explained); I mean the physical bodies.  An assisted living facility isn't much use without staff.

 

[ballz]

Pensions were never "paid into" as future investments.  From "go", the system relied on current workers contributions to pay retirees (the first recipients had not contributed anything meaningful by a long chalk).  That has changed a bit with pension reform, but broadly the system is still a Ponzi scheme.

Yes, I understand this, which was my point. The government can't coordinate a two-man circle-jerk, let alone a pension fund. Now we're in a hole of unfunded liabilities and wondering (or ignoring) how in the world we're going to pay for it.

I don't mean the future generation as taxpayers (although that is necessary as just explained); I mean the physical bodies.  An assisted living facility isn't much use without staff.

Do you really think if we didn't offer deductions for dependents and subsidize BAs we would end up with no employees at a hospital?

 

[a_majoor]

The "shortfall" created by going to a flat or single tax can be closed quickly with some of the following prescriptions:

1. Get the Federal government out of the Province's business. Ministries and programs which infringe on Provincial responsibilities as laid out in the B.N.A cost quite a bit. May research is out of date but the last time I came across the figures I think it was $19 billion.

2. Edward has pointed out there are literally thousands of groups getting Federal funding but not producing much more than PowerpPoint slides (if that). While it isn't clear to me just how much could be saved by pruning this, it is probably billions

3. I occasionally get Spam email telling me to apply for government business grants. The kicker is these ads tell me there are over 300 different programs to provide funding for start-up business. I can only imagine how many other redundant programs there are out there. Program rationalization is another place where billions could be saved.

4. Going back to 1, tell the Provinces to stay out of Federal business. IF provincial budgets are being used to pay for things which are the prerogative of the Federal government, then as a minimum that amount of money should be deducted from any transfer funding they get. Once again, this could be billions of dollars.

And look; we have chopped spending by 20-30 billion dollars a year (if not more) without even touching healthcare or "social programs". More monies could be saved by clearly identifying just what sorts of services the Federal government is paying for with transfer payments (and insisting the payments would be equal to the per capita cost of the most efficient ie. how much per person is being spent on service "X"). About $30 billion/year is being spent on business subsidies; companies which have been profitable for the last 5 years should be cut off at once, and everyone else told to become profitable in the next five years since that is when the tap is turned off.

 

[CougarKing]

We're replacing our dying Canadians with non-Canadians. The Government, in my opinion, does have a role to play in encouraging Canadians to have more kids so that we can regenerate our own population and rely less on immigrants.

JS2218,

If the said immigrants have gone through the long painstaking process to become Canadian citizens, they are Canadians, with the same voting rights as you or me.

Some may have dual citizenship with their origin nation and thus see having a Canadian passport simply as a "citizenship of convenience", but many more such as myself see themselves as Canadian first.

One of the reasons why the Conservatives won the 2011 election was because of then-immigration minister Jason Kenney's outreach efforts to predominantly immigrant communities/ridings that had traditionally voted Liberal/NDP in the past. 

 

[Brad Sallows]

>Do you really think if we didn't offer deductions for dependents and subsidize BAs we would end up with no employees at a hospital?

"None" is reductio ad absurdum.  Between "enough" and "none" there is "not enough".  So who gets first call?  The highest bidder?  That would be ironic - the people who don't undertake the expense of raising children are more likely to have money to bid up the cost of services for which demand outstrips supply.  The couple who raised 6 kids can't afford the cost of care in the facility at which their son works...etc.

Regardless of where the income splitting discussion ends, rather than dump everything into a massive and disruptive tax reform scheme the current approach is preferable: gradually squeeze down public spending, and simultaneously squeeze down taxation.  If other parties want to go the opposite direction, press them to reveal details before they are elected.  (This would require institutional media who don't drop their panties for Trudeau and Mulcair.)

 

[Brad Sallows]

I got curious about worker:retiree (contributor:recipient) ratios.  I did not find an authoritative source.  What I did find were allegations of (approximately) a 7:1 ratio circa 1970, 5:1 circa 2000, 4:1 circa today, and predictions of 2:1 by 2050 (some by 2030, which I ignored) - roughly a drop of 1 on the left hand side each 15 years.

Naturally, the generations that can't be arsed to raise enough kids to support them in future are also sticking the kids with increasing public debts.

 

[ballz]

>Do you really think if we didn't offer deductions for dependents and subsidize BAs we would end up with no employees at a hospital?

"None" is reductio ad absurdum.  Between "enough" and "none" there is "not enough".  So who gets first call?  The highest bidder?  That would be ironic - the people who don't undertake the expense of raising children are more likely to have money to bid up the cost of services for which demand outstrips supply.  The couple who raised 6 kids can't afford the cost of care in the facility at which their son works...etc.

They would have 6 kids who should feel pretty obligated to help look after them... My savings/investments vs the income of 6 kids? Perhaps if we de-regulated and let nature take its course then people would actually have more kids like they used to?

We are dealing in way too many hypothetical scenarios. The important principle is individual sovereignty. Someone else's choice to have kids shouldn't cost me money just because they are voting for the government to take my money by force. It's immoral.

Regardless of where the income splitting discussion ends, rather than dump everything into a massive and disruptive tax reform scheme the current approach is preferable: gradually squeeze down public spending, and simultaneously squeeze down taxation.

Just not happening nearly fast enough in my opinion, but I understand politicians can't just "do what they want." I'm sure the 2008 recession didn't help matters. And while I'm sure it doesn't need to be said again, its also happening in a manner that I believe is biased towards advancing the government's (no matter what party is in power) social agenda.

 

[JS2218]

JS2218,

If the said immigrants have gone through the long painstaking process to become Canadian citizens, they are Canadians, with the same voting rights as you or me.

Some may have dual citizenship with their origin nation and thus see having a Canadian passport simply as a "citizenship of convenience", but many more such as myself see themselves as Canadian first.

One of the reasons why the Conservatives won the 2011 election was because of then-immigration minister Jason Kenney's outreach efforts to predominantly immigrant communities/ridings that had traditionally voted Liberal/NDP in the past.

I meant nothing pejorative towards immigrants. I was simply pointing out that the Canadian-born population is not sustainable, thus requiring immigrants in order to maintain and slowly increase our population. I meant nothing negative by that in and of itself.

 

[Remius]

This is turning into a weird week in politics.

http://www.cbc.ca/news/politics/are-stephen-harper-s-conservatives-making-inroads-in-quebec-1.2951565

 

[Kilo_302]

Excellent column discussing the complete lack of real opposition to the government on most fronts given the fact that 2/3 of Canadians did not vote for the Conservatives. I for one haven't seen much evidence of the "liberal media" of late. And Harper's record doesn't stand up to scrutiny at all. "How pathetic are we?" indeed.



http://rabble.ca/columnists/2015/02/war-terror-security-blowing-whistle-on-harpers-dirty-politics

Mind you, the media -- TV mainly, but not exclusively -- helps with the amnesia. The fact that Harper thinks the media are against him is a measure of his dictatorial mindset. What he means is that they're not backing him the way Russia's media back Vladimir Putin.

He has actually succeeded in shutting down all but controlled information -- propaganda, essentially -- from the federal government with little sustained protest; the media still peddle the myth of the Conservatives as great economic managers, although their central economic pillar -- the tar sands -- has collapsed; resigning foreign affairs minister John Baird was given a hero's sendoff from both media and opposition although his main policy move -- supporting "freedom fighters" in Libya and Syria that turned out to be mostly terrorists many of which went on to form ISIS -- was catastrophic. And, of course, two of the media's biggest stars -- Mike Duffy and Pamela Wallin -- compromised their entire journalistic dignity to hit the trail fundraising for him.

And Harper, who loves those sweet-talking one-on-ones with CBC's Peter Mansbridge, actually has superb TV presence -- probably the main reason for his success. A handsome guy who looks "prime ministerial" and who speaks softly, is articulate, smiles, and never raises his voice -- so that to someone who's only half-listening, uninformed or plain stupid, even if he's announcing the death of democracy as we know it, he still sounds reasonable. It's among that group that he's looking for the extra 10 per cent to put him over the top.

"How pathetic are we, divided political opposition included?" could be the real election question.

 

[a_majoor]

rabble.ca is one of those sites where you should take a long hot shower after clicking on it.

I see less biased stuff on Al-Jazeera and RT when I am looking at outlets for contrasting information sources.

And I see you and they fell for the Young Dauphin's line about the oil industry. Just as a question Kilo; what percentage of Canada's economy does the oil industry constitute? If you knew the answer then you would also know that the "excellent" colunm is total BS. Maybe you should start doing your research on Al-Jazeera and RT. Even the CBC is a better source of information (and that is setting a pretty low bar).

 

[SeaKingTacco]

Excellent column discussing the complete lack of real opposition to the government on most fronts given the fact that 2/3 of Canadians did not vote for the Conservatives. I for one haven't seen much evidence of the "liberal media" of late. And Harper's record doesn't stand up to scrutiny at all. "How pathetic are we?" indeed.



http://rabble.ca/columnists/2015/02/war-terror-security-blowing-whistle-on-harpers-dirty-politics

I see, but the 10 years Chrétien was PM with about the same percentage of the popular vote- that was just fine?

 

[PuckChaser]

I see, but the 10 years Chrétien was PM with about the same percentage of the popular vote- that was just fine?

Its fine because Rabble got the government they wanted.

The problem with awarding seats based on popular vote, is that you no longer get to pick the candidate to represent your riding. Seats are filled by parties. So instead of each region getting to vote for the candidate they want (and in a perfect world not for a party), you end up voting for a party and getting parachute candidates everywhere. Not really a proper form of representation, and we'll be constantly in a state of minority or coalition governments with even more political games to get what the ruling party wants.

 

[Brad Sallows]

rabble.ca is basically talking points for the left extremity of the NDP.  Anti-Harper propaganda is commonplace.

Sidebar- I do so like it when progressives note the point - which they often do - that the Conservatives formed a majority government with just under 40% of the popular vote (however they choose to express it).  Here in BC, the last two NDP governments were 1991 (40.71%) and 1996 (39.45%, less than the Liberals' 41.82%).  Undoubtedly they will be happy to climb in again without the certification of an overwhelming majority, or even a bare one.

My impression of push-back from supporters of parties other than Conservative is that there is plenty of it, starting with the PBO and opposition parties, winding down through various think tanks and media organs to the argumentariat.  The problem is that there isn't much scandal on which to hang push-back, and the other parties occasional partake of their own misdeeds.  The Canadian media collective doesn't seem to be quite as partisan as in the US, so I suppose they have more self-respect than to jump on every Conservative slip and hide all the others.  When a small-ball personal corruption scandal surfaces, it gets pumped like a leaky raft.