Ways for the provinces to make more revenue.

[jdobbin]

Stat's Canada estimates 2.7%, realistically we are looking at between 2% and 15% depending on what you take is on the real velocity of Canadian currency. Closer to 15 is most accurate. Think of how much you do is underground, yard sales (you don't actually collect GST on that income do you, how about if you own a business that makes more than $30k/year... you should be legally), helping out the buddy with his basement for a few bucks (or beer, do you claim this 'cash like' payment as income?), when you buy something off ebay, ect. ect.. Obviously most of us aren't making a living off these ventures, so it may be a few percent of your total money flow. But there are people making nearly all their money under the table, and that's why I have no problem believing 15% of our economy is underground... and it's caused by... you guessed it!! GST!!!

Take a read: http://www.ctf.ca/pdf/ctjpdf/2002ctj5_hill.pdf

I'd probably go with the lower level of 3% of the economy is underground. Not too many people in Canada do all their business as contracting work where both sides wink and don't declare.

I know that some small time renos where you pay a handyman certainly falls into the underground part. However, who wants to pay a major contractor like that and have no paper record of it? You'll probably have to get Mike Holmes to fix it all afterward.

[geoffrey]

Mike Holmes in your house should disturb one so much that they don't participate in underground business. I hate the guy.

[Jerry J. Fortin]

WE are over taxed and under serviced in Alberta. This size of our surplus was nearly half our budget. This situation is happening while we experience problems in education and healthcare. Politicians have no right to tax beyond the requirments of funding program spending authorized through legislation. The situation is a sad commentary on our democracy.

A tax revolt accross the country may not be a viable option, but in Alberta with a leadership race begining to shape up Canadians would be well advised to watch what happens here.

[August1991]

Stat's Canada estimates 2.7%, realistically we are looking at between 2% and 15% depending on what you take is on the real velocity of Canadian currency. Closer to 15 is most accurate. Think of how much you do is underground, yard sales (you don't actually collect GST on that income do you, how about if you own a business that makes more than $30k/year... you should be legally), helping out the buddy with his basement for a few bucks (or beer, do you claim this 'cash like' payment as income?), when you buy something off ebay, ect. ect.. Obviously most of us aren't making a living off these ventures, so it may be a few percent of your total money flow. But there are people making nearly all their money under the table, and that's why I have no problem believing 15% of our economy is underground... and it's caused by... you guessed it!! GST!!!

On the contrary, most tax evasion (and avoidance) occurs because of income tax and it's anyone's guess how much it is. To pick a number of the air, I'd say 10%-20%.

GST has fewer collection points than income tax, and the big payers are easier to detect.

I am increasingly convinced that we should move to VAT and reduce income taxes.

[jdobbin]

On the contrary, most tax evasion (and avoidance) occurs because of income tax and it's anyone's guess how much it is. To pick a number of the air, I'd say 10%-20%.

GST has fewer collection points than income tax, and the big payers are easier to detect.

I am increasingly convinced that we should move to VAT and reduce income taxes.

I think you are right that it is probably easier for the big guys to avoid taxes on income. I think the Bronfman's moving a few billion out of the country in a shameful loophole comes to mind.

I have no idea what the percentage is though but for the Bronfman's, it must have been a grand slam.

[geoffrey]

August, moving to a VAT would be the destruction of the poor and middle classes.

When comparing middle class and upper class families, they will consume relatively the same amount of goods, maybe a nicer car, but consumption isn't too off.

Your taxing Joe Blow $75k/year the same as Bob Blow $150k/year, because Bob is just stashing that cash, and not being taxed on it.

Personally, equity is far down the list of my concerns with taxation, but it needs to be reasonable. Consumption taxes target the poor more than the rich because we all pay the same. And if you say credits could be given for low-income... then we are back to income tax anyways.

[Charles Anthony]

Your taxing Joe Blow $75k/year the same as Bob Blow $150k/year, because Bob is just stashing that cash, and not being taxed on it.

Both of them receive the same services, therefore they should pay the same.

Personally, equity is far down the list of my concerns with taxation,

Equity in taxation is the only form of taxation I can accept (if not-making-much-of-a-fuss-to-oppose, can be called acceptance).

but it needs to be reasonable.

If not equity, what would be your standard of reasonability?

Maximum-plunderability while minimizing-political-flack?

Consumption taxes target the poor more than the rich because we all pay the same.

No. It sounds like they target everybody equally to me.

What if a "poor" person and a "rich" person wanted to each buy their own pair of shoes? Should the "rich" person be obligated to pay more?

And if you say credits could be given for low-income... then we are back to income tax anyways.

Explain.

[Riverwind]

Both of them receive the same services, therefore they should pay the same.

Are not simply payments for services - they are also a form of mandatory charity. For that reason those who can afford more should contribute more.

[geoffrey]

And if you say credits could be given for low-income... then we are back to income tax anyways.

Explain.

I'll give you two examples of people, Joe and Bob, living in a country with a 10% consumption tax.

Joe spends $25,000 in a year on taxable goods (making $60,000). He pays his $2,500 and doesn't get any credits because he makes too much.

Bob spends $25,000 in a year on taxable goods from a lower income of $35,000. The government has credits for 'low income' people and gives Bob $1,500 back in credits. So Bob has only paid $1,000 in taxes.

Bob's real tax rate is 2.86%

Joe's real tax rate is 4.16%

There you have it, an income based tax at it's finest. The credit system merely creates another income tax.

[Charles Anthony]

Bob's real tax rate is 2.86%

Joe's real tax rate is 4.16%

There you have it, an income based tax at it's finest. The credit system merely creates another income tax.

Thank you. I understand your comment.

However, I disagree and I believe you are mistaken because the credit system is only active below at a certain threshold. Once, a person's income rises above the threshold, you can design the credit system so that it only applies to "poor" (however you want to identify them) people. The consumption tax will still work.

[geoffrey]

Bob's real tax rate is 2.86%

Joe's real tax rate is 4.16%

There you have it, an income based tax at it's finest. The credit system merely creates another income tax.

Thank you. I understand your comment.

However, I disagree and I believe you are mistaken because the credit system is only active below at a certain threshold. Once, a person's income rises above the threshold, you can design the credit system so that it only applies to "poor" (however you want to identify them) people. The consumption tax will still work.

Still creates two tax brackets and your back where ya started. If your going to argue for consumption tax, argue for it. Credits just make it income based, I don't see how it isn't in any possible case.

[Charles Anthony]

Still creates two tax brackets and your back where ya started.

Yes, it creates two brackets but you are not back where you started. Instead, you are then only at a consumption tax. The consumption tax will still work.

If your going to argue for consumption tax, argue for it.

You proposal seems like a workable compromise given that a minority of people are "poor" in Canada.

Credits just make it income based, I don't see how it isn't in any possible case.

It is only active for "poor" people and not all consumers.

CAVEAT: I believe all taxes are wrong. I am only comparing two competing forms of taxation.

[Renegade]

Are not simply payments for services - they are also a form of mandatory charity. For that reason those who can afford more should contribute more.

Why should charity be mandatory? In my view it should always be voluntary.

[Jerry J. Fortin]

Income taxes are regressive. They hurt the little guy far more than the big guy and they are used against us for political gains by governments. When the governments claim to lower taxes, what they really do is lower personal or corporate income tax then raise a levy in some other area. The total tax load, or government revenue stream is rarely reduced. Worse yet the reductions from one level of government are ususally picked up by another, that process is called "TAX ROOM'.

The worst case of income tax is the withholding variety. That little animal bites most citizens, the working class. Business and professional corporations fare much better and utilize many technics of clawback that avoid reducing their disposable income to the same degree as the average working citizen.

The only "fair tax" system is a transaction tax payable on disposable income. The more you have the more you spend system works as an effecient means of taxation. If you cannot afford to buy things you obviously can't afford to pay taxes. Going to a fair tax system would eliminate a large federal bureaucracy, or at least a big part of Revenue Canada. Collection is possible through the same means as the current GST.

[Charles Anthony]

The only "fair tax" system is a transaction tax payable on disposable income.

No.

The only "fair" tax is no tax. However, that is best left to a different thread.

Such a different thread could analyze the innuendo of

mandatory charity

and justifications for euphemizing stealing-from-Peter-to-give-to-Paul.

[Jerry J. Fortin]

Okay Charles start the tread and let us know what you think.

[Charles Anthony]

Okay Charles start the tread and let us know what you think.

Sure.

Here goes: taxation is wrong because...

[yam]

. . . . . the population does not want to pay for a social infrastructure . . . like hospitals in calgary for example

[geoffrey]

I'll pay for some hospitals. A $10b surplus means I've already paid for the hospitals thanks. Pride in surpluses is as dangerous as pride in deficits. Let's either give that money back so we can privately fund our hospitals, or build something with the money. Grrr ol' Ralph.

[jdobbin]

I'll pay for some hospitals. A $10b surplus means I've already paid for the hospitals thanks. Pride in surpluses is as dangerous as pride in deficits. Let's either give that money back so we can privately fund our hospitals, or build something with the money. Grrr ol' Ralph.

I think you're right about that. There a few experts on infrastructure in Alberta who say that the surpluses should be used for upgrading roads, hospitals and the like in the province rather than on Klein's second gift of cash to the citizens.

[geoffrey]

I'll pay for some hospitals. A $10b surplus means I've already paid for the hospitals thanks. Pride in surpluses is as dangerous as pride in deficits. Let's either give that money back so we can privately fund our hospitals, or build something with the money. Grrr ol' Ralph.

I think you're right about that. There a few experts on infrastructure in Alberta who say that the surpluses should be used for upgrading roads, hospitals and the like in the province rather than on Klein's second gift of cash to the citizens.

Well, we need to make sure we can afford the costs of expansion later, when oil isn't around anymore.

A hospital doesn't just cost a couple billion to build. Your paying millions to keep it open after, will we have the money?

I think we will, and that's why we need to start building. This is probably the least opportune time to build a hospital though, with labour and materials costs skyrocketing. But it has to be done, and we'll all pay for the PC's poor foresight... something all Alberta politicans seem to suffer, both provincially and municpally.

[jdobbin]

Well, we need to make sure we can afford the costs of expansion later, when oil isn't around anymore.

A hospital doesn't just cost a couple billion to build. Your paying millions to keep it open after, will we have the money?

I think we will, and that's why we need to start building. This is probably the least opportune time to build a hospital though, with labour and materials costs skyrocketing. But it has to be done, and we'll all pay for the PC's poor foresight... something all Alberta politicans seem to suffer, both provincially and municpally.

CTV posted this on their website today. They're saying that the booming economy has affected the quality of life for some some people.

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

[geoffrey]

Well, we need to make sure we can afford the costs of expansion later, when oil isn't around anymore.

A hospital doesn't just cost a couple billion to build. Your paying millions to keep it open after, will we have the money?

I think we will, and that's why we need to start building. This is probably the least opportune time to build a hospital though, with labour and materials costs skyrocketing. But it has to be done, and we'll all pay for the PC's poor foresight... something all Alberta politicans seem to suffer, both provincially and municpally.

CTV posted this on their website today. They're saying that the booming economy has affected the quality of life for some some people.

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

It for sure has to those that weren't financially secure to begin with. It's tough paying for rent increases and all that. That being said, more people are living the high life right now then those are suffering. And donations to charities is through the roof right now. There is a larger gap forming between the rich and the poor, but it's relatively a choosen gap considering basic labour pays $20 an hour in Calgary, with no shortage of overtime hours and everything else.

I do feel sympathy for those on fixed incomes, such as the seniors or the hanicapped, but everyone else has the potential to make a killing if they wanted to. I struggle with abled bodied people that could go work the rigs for $100k a year complaining about money. The opportunity is there, you can't really expect everythign to be handed to you, right?

The solution is to support the seniors and disabled people more, everyone else, hey, it's up to them whether they want to make the most of the opportunity while it lasts, or to suffer by falling behind in the booming economy.

[yam]

yes it has been doing well. manual labour pays a lot their too as you said. However, im curious about economic the relationship in Alberta concerning working class women and employment. is the economy able to spill over into jobs such as the service sector et al? Is there equal`opportunity between men and women competing for employment say in the oil rigs, building sites etc? Otherwise it could be argued that only half of the working population is doing well. The other half (women) forming a larger economic lump with those on fixed incomes. Are the abministrative jobs that women usually fill paying something descent or does it fall to the wayside into the catagory of low minimal wage. Curious.

[geoffrey]

yes it has been doing well. manual labour pays a lot their too as you said. However, im curious about economic the relationship in Alberta concerning working class women and employment. is the economy able to spill over into jobs such as the service sector et al? Is there equal`opportunity between men and women competing for employment say in the oil rigs, building sites etc? Otherwise it could be argued that only half of the working population is doing well. The other half (women) forming a larger economic lump with those on fixed incomes. Are the abministrative jobs that women usually fill paying something descent or does it fall to the wayside into the catagory of low minimal wage. Curious.

The admin sector is very competitive, temp agencies can't find enough people to fill vacancies and company's are giving experienced admin people retention bonuses (when do you ever hear of clerks getting retention bonuses?).

The company I work has been looking for some admin people in various areas for quite some time now, can't find anyone, and these are paying entry level salaries of over $45k/year. Oil and gas pays much more than that still.