Making Canada Relevant Again- The Economic Super-Thread

[stegner]

Can you imagine!?! Politicians doing what they think is right rather than just buying our votes with our own money?  Impossible! I can pretty much guarantee that none of Jean Chrétien, Paul Martin, Stéphane Dion, Michael Ignatieff or Bob Rae could/can imagine such nonsense. The polls must be followed, slavishly, they all agree because that’s how one grasps power – for its own sake, just ‘cuz Liberals are entitled to it.

Responsible government is representative government.  The confidence of the House is only maintained, because the House has the confidence that the government has the confidence of the people.

Explain the GST reduction please.  If that is not bribing Canadians with their own money, I don’t know what is.  It was an extremely short sighted political move that has resulted in a deficit.  Never trust an economist in office is my motto. Please explain the billions that went to bribe Quebec, especially the payment right before a provincial election, in which Charest was returned. 

Please have a look at this story-as it contests the heart of your argument.  Harper is a tactician and uses polls, despite his most fervent denials.  Indeed, he uses polls more than the Liberals.  http://www.nationalpost.com/news/canada/story.html?id=142342

Sure Harper is spending money on defence.  However, Martin was doing the same, and would be continuing to do so if had been returned to office.

In sum, Harper is a typical politician, and while the increase of defence expenditures is good, I don't see how current expenditures are vouchsafing Canada's claim to the north or ensuring the security of our domestic territory. 

Edited for format and spelling

 

[Fishbone Jones]

Explain the GST reduction please.  If that is not bribing Canadians with their own money, I don’t know what is. 

I don't look at it as a bribe. I look at it as responsible government returning money that the liberals stole from me.

 

[stegner]

I don't look at it as a bribe. I look at it as responsible government returning money that the liberals stole from me.

The GST was implemented by the Conservatives not the Liberals.  Read your history book. 

 

[Edward Campbell]

...
Explain the GST reduction please.  If that is not bribing Canadians with their own money, I don’t know what is.  It was an extremely short sighted political move that has resulted in a deficit.  Never trust an economist in office is my motto.
...

The GST reduction is excellent policy and great politics, too.

Canadians hate the GST. They shouldn’t because it is fairly well designed tax and consumption taxes are always and in every single respect superior to income taxes: they are, to some degree, voluntary or, at least, discretionary (consume less, pay less in taxes) and they are not (as income taxes are) a drag on investment and job creation. But, Canadians hate the GST and that’s enough for the Liberals.

The great thing about reducing the GST is that because Canadians hate it so much the Liberals will be very, very reluctant to put it back up when, inevitably, they get back into power. That means that all future governments have less and less money with which to ‘play’ – that, too, is almost always (big wars excepted) a good thing. Most government spending, especially most spending in the ‘health and social services’ envelope is subject to the law of unintended consequences and ends up doing considerable harm along with some good.

Now, I would rather that the Conservatives had raised the GST and cut federal income taxes to zero for those earning, say, $25,000.00 per year (currently one pays $1,200+ in federal tax and a further 1% to 5% of income in provincial taxes on $20,000 and $2,600+ and 3% to 7% on $30,000) and raise the marginal tax rate for that very, very tiny minority of Canadians who earn incomes from employment of, say, $500,000.00. But, I understand that meaningful income tax cuts – ones that actually do economic and political good – must be so deep that the concomitant GST increase is too much to bear, politically.

<rant>
I, personally, would like to se the combined federal and provincial GST set at 20%+ - with very low to zero income taxes for really low income ($25,000±/year) employed Canadians and federal corporate income tax reduced from around 38% to, say, 10%. I want taxes on investment income to be cancelled, entirely, because investors, not governments, create jobs and taxing investment income is a stupid policy – but much loved by Liberals and socialists. (Socialists cannot help liking stupid policies because they start from a stupid socio-economic-political philosophical base.)
</rant>

 

[stegner]

Now, I would rather that the Conservatives had raised the GST and cut federal income taxes to zero for those earning, say, $25,000.00 per year (currently one pays $1,200+ in federal tax and a further 1% to 5% of income in provincial taxes on $20,000 and $2,600+ and 3% to 7% on $30,000) and raise the marginal tax rate for that very, very tiny minority of Canadians who earn incomes from employment of, say, $500,000.00. But, I understand that meaningful income tax cuts – ones that actually do economic and political good – must be so deep that the concomitant GST increase is too much to bear, politically.

<rant>
I, personally, would like to see the combined federal and provincial GST set at 20%+ - with very low to zero income taxes for really low income ($25,000±/year) employed Canadians and federal corporate income tax reduced from around 38% to, say, 10%. I want taxes on investment income to be cancelled, entirely, because investors, not governments, create jobs and taxing investment income is a stupid policy – but much loved by Liberals and socialists. (Socialists cannot help liking stupid policies because they start from a stupid socio-economic-political philosophical base.)

I agree with everything here, except the corporate tax cuts.  Corporations don't like to create jobs unless they really have to, I am arguing from a rationale choice perspective in this respect.  Corporations are utility maximizing individuals.  I am against corporate welfare, I say this as an Albertan perplexed why mostly foreign oil companies deserves billions upon billions in subsidies during times of record profits and oil prices, while I have to pay crazy gas prices for a resource that I along with fellow Albertans actually own .  The profits are not staying in Alberta as the province is getting a pittance.  If you cut corporate taxes, I believe there has to be commitment to re-invest corporate profits into the Canadian state, rather than to transfer profits to headquarters, which happens to be in the U.S in our branch-plant economy. 

 

[Teeps74]

I read my history book, and remember the CBC interview well. The Liberals coasted to a majority victory on the promise of getting rid of the hated GST.

 

[stegner]

I read my history book, and remember the CBC interview well. The Liberals coasted to a majority victory on the promise of getting rid of the hated GST.

I don't think that was not the main reason, otherwise they would have been tossed from office in 1997.  I think it had to do more for Canadians opinions of the Conservatives and Brian Mulroney at that particular time in history.   

 

[Snafu-Bar]

Well income tax is what it is, the rest of the taxes are just greed, tax on the tax in many cases. Buy gas/smokes/beer all taxed and then taxed again upon purchase. It's any wonder people are looking to earn 20+ bucks an hour these days. Throw in neccessities like hydro/phone/propery and eat even more tax on taxes.

I think it would be in the best interest of Canadians to throw out the current system and start over from scratch. The world economy has changed a ton in the past couple of decades and our economy is lagging behind the times. Dropping the GST is going to have an impact on the countries overall revenue, but don't forget the GST(government stealing tactics) was a "defeicit reduction" tax meant to balance the books before being dropped. Well now that the government has implemented the cash grab and voted themselves many a hefty self appointed pay raise it's no wonder why it isn't going away any time soon.

:

A resposible goverment is one that still doesn't exist....

 

[Edward Campbell]

...   The profits are not staying in Alberta as the province is getting a pittance.  If you cut corporate taxes, I believe there has to be commitment to re-invest corporate profits into the Canadian state, rather than to transfer profits to headquarters, which happens to be in the U.S in our branch-plant economy. 

Profits - all profits from all eneavours belong, 100%, to the owners - the investors. No one else, not governments, not the resource 'owners' have a right to a penny.

We all (well, almost all) agree that we shall have governments and that governments shall be allowed to tax us in order to e.g. defend the realm. So far, so good. But I, as an investor, am no more obliged (nor should I be required) to pay any extra for any thing than should any consumer. The fact that I take risks and earn income while the consumer just whines is not, in any way, sufficient justification for me to be obliged/u] share my wealth with him (or her).

Stegner has, explicitly, given us the Liberal Party of Canada's rationale. I find it deeply, deeply flawed - at every level. It is economically unsound and philosophical rubbish.

 

[GAP]

I find the Liberal party's philosophy/mandate/practise becoming more and more 1984-ish. Trudeau & Chretien operated on the principle of Big Government having womb to tomb control, and their policies reflect that.

As for Companies/Shareholders being compelled to create jobs....rubbish. If the market and resources are there the jobs will be created by talented businessmen, but only as many as needed to satisfy the market, not some societal dreamer

 

[Proud_Newfoundlander]

I don't think that was not the main reason, otherwise they would have been tossed from office in 1997.   I think it had to do more for Canadians opinions of the Conservatives and Brian Mulroney at that particular time in history.     

Well, canadians hated it, but by '97 they weren't pissed with it as much as they were in '93. In addition there was other stuff getting them rotted, like decreased spending on social services and reduced transfter payments to the provinces.

As for the GST that has softened the blow on Canada from the US mortgage crisis

 

[a_majoor]

Having the strength to follow your convictions is part of being responsible.

The Conservative Party offered a platform based on five priorities (Mr Dithers had something like 178, and Mr Dion tells us it is difficult to set priorities...), and the people gave them a mandate. As the government, they have followed their platform fairly closely, resisting the tendency to trim their sails according to the polls. As always, there have been some deviations from the plan, but certainly nothing as blatent as denying they ever actually promised to abolish the GST (and Mr Chreitien continued to deny it even after a recording of him making that promise was played to him before a live audience!).

At any rate, it seems quite clear from the tone of the article the headline is ment to be seen in an "ironic" light, and this is another slam at the government ("my God, they won't follow the polls because polls tell us what is really important!)

 

[stegner]

Stegner has, explicitly, given us the Liberal Party of Canada's rationale. I find it deeply, deeply flawed - at every level. It is economically unsound and philosophical rubbish.

How so?  It's all right for taxpayers to spend billions subsidizing companies, but they are not entitled to any of the profits?  Answer me this. 

Profits - all profits from all eneavours belong, 100%, to the owners - the investors. No one else, not governments, not the resource 'owners' have a right to a penny.

But the governments and the people are investors when the subsidize industry no? 

 

[Donaill]

  There are times when I tire of hearing about politics. People continually point fingers at one another, saying that one party is worse than another or one PM  was worse than another. Too many times, I have seen paries get elected based on what they said they would do and then see them do the opposite. Whether it was tossing Joe Clarke out because he wanted to raise a certain tax, only to see the liberals raise it. Then there were idiots like John Buchanon, Gerald Regan, Peter MacKay and Brian Mulrooney (yes I know thay were not all PMs). My point is that we constantly point fingers at others saying that it was some one elses fault, without fully realising that the point that we are at now was the result of several different politicians.  Mulrooney was, in my opinion, a liar that got away with theft and selling out our nation via free trade. Now our goverment has decided to gaurentee the US a set amout of resources, regardless of our own need. 

  I have started to see a clear divide between the West and the East. The West has gone in a very ultra-right direction, while the East has stayed in a some what traditional Canadian stance. Am I wrong in this observation?  Social minded programs and spending does not mean that it will drive the economy into the ground, no more than it does when we give tax breaks to large companies. Balance is the key.  We see, in the US, where an untethered free market can go in the wrong direction. We also see it in other countries where companies carrying US or Canadian flags abuse or take advantage of lax labour or enviromental laws.

  I agree with some of what others have said in this section. Why should a company that is taking taxes from us, in the form of subsidies, be allowed to not invest in our economy. Why should GM be allowed to close down a plan in Ontario, that has a higher productivity level than any place in the US yet still not face any economic back lash from our goverment or its populace? Corporate welfare is not the same thing as social welfare if a company is allowed to just close up shop and move else where without any investment in our country.  To any East Coasters on here I just have to say one word, ACOA, that should raise eye brows and doubts.

  Why should a Canadian owned shipping line be allowed to get coal from a suppresive regime, such as China, where the miners die by the hundreds while we have viable coal mines here in Canada?

  On a final note, though I am not from The Rock, Danny for Prime Minister.

 

 

[stegner]

On a final note, though I am not from The Rock, Danny for Prime Minister.

I am not from the Rock and I fully concur.  Danny Boy has more balls and brains than the entire House of Commons put together. 

 

[Donaill]

Canada, and Canadians first. I don't care who came from where or who did what to whom. It is time we started to pull our heads out of the dirt, make a serious try at total inclusion for all members of this country and make ourselves more self reliant and not so reliant on our neibours economy. Lets manufacture more of our own goods, stop shipping so much out only to buy it back.

 

[Edward Campbell]

... Lets manufacture more of our own goods, stop shipping so much out only to buy it back.

That'll be easy if we can manage two simple things:

1. Convince Canadian workers to do more work for less; and

2. Convince all Canadians, including all those now doing more for less, to pay a lot more for all he things they now buy in The Bay, WalMart and Zellers.

 

[Edward Campbell]

...
But the governments and the people are investors when the subsidize industry no?   

Yes, they may be. But, it depends: If the subsidy is a loan then the government, like any bond-holder (as just confirmed by the SCC), has no right to anything but repayment, on whatever terms and with whatever interest was negotiated. Most subsidies are most akin to bonds. But, most governments are poor at business and they give loans with scandalous repayment terms - outright grants, in effect, but without any ownership rights for the taxpayer.

If the government (the people) wants a share of the company, to be an investor, entitled to a share of the profits and a full share of the losses, too, it can buy one - that's why the gods made stock markets. Subsidies can involve ownership, but very, very, very few ever do. If the government invests enough money (buys a big enough share) it can take control of the board and run the company. Look at the great job it did with a long, sad train of government owned enterprises from the '30s onwards. If our government (Conservative or Liberal) starts buying, big, into companies in which I invest then I will bail out with all haste.

 

[Donaill]

NS Power was run better by the province than it has been under private ownership.

 

[Donaill]

  How much iron ore gets sent to the US only to be bought back? Canadians want to earn enough to live on. That is why some many east coasters have moved to Ontario and westward. East Coast companies seem to think that the beautiful scenery is enough to convince people to work here.  Never mind that an apprentice electrician cannot get enough hours in to get a full ticket in a reasonable time. Why stay here for low wages, part time jobs when you can go else where to get a good wage and full time work.

Clothing and footware aside there are many manufactured goods in Canada that the workers recieve a good wage and the product is still affordable. Coal was an example, CCD camaras used by industry and elsewhere, the Blackberry, and many Hondas and Toyotas.