Free Trade Agreements

[bush_cheney2004]

In Canada, low income people get a GST/HST rebate check mailed to them quarterly to (approximately) reimburse them for sales taxes paid. Effectively, they don't pay consumption tax, or even pay negative consumption tax since often the quarterly checks will exceed how much they paid in sales tax that quarter.

Well, hell, no wonder the losers in Canada feel so entitled to subsidies. That's just nuts.

[dre]

That's correct. It's a different issue, however. What was being discussed was whether someone can live on 20k/year in our society, which includes access to various services such as healthcare, education, and transportation infrastructure.

Right I guess it depends how you define "earning a living". You can certainly survive in our society on a min wage job as long as everyone else doesnt mind subsidizing you. Hell you could probably live on foraging for roots and berries.

[Evening Star]

Perhaps I misunderstood the argument. I'll certainly grant that someone who works full-time at a minimum wage job will not die of starvation.

[Bonam]

Perhaps I misunderstood the argument. I'll certainly grant that someone who works full-time at a minimum wage job will not die of starvation.

No. Someone living on a minimum wage job in Canada will live luxuriously by almost any global or historical standard. Yeah, they won't be buying a luxury yacht any time soon, big deal. Several example minimum wage budgets have been posted in the thread, and all include a comfortable lifestyle, which has been experienced by the posters in question.

Furthermore, someone working 40 hours a week has tons of time to work on improving their situation, whether it be by looking for other jobs, starting up their own business on the side, taking night courses to learn new skills, or getting a 2nd part time or full time job.

[Bonam]

Right I guess it depends how you define "earning a living". You can certainly survive in our society on a min wage job as long as everyone else doesnt mind subsidizing you. Hell you could probably live on foraging for roots and berries.

The various layers of the Canadian government spend about 700 billion per year annually.

http://www40.statcan.ca/l01/cst01/govt48a-eng.htm

(That's "consolidated" spending which includes federal and provincial spending). That's 40,000 per taxpayer (there are about 17 million employed people in Canada). Do you know how much you have to be making to pay $40,000 annually in taxes? Right around 150k or so, which also happens to be the threshold to be in the 1% by income. So if your argument is that everyone who is contributing less than 40k per year in taxes is a leech, fine, but that pretty much means everyone in Canada except the 1% are leeches.

[Bonam]

Well, hell, no wonder the losers in Canada feel so entitled to subsidies. That's just nuts.

Yeah, the system is pretty broken too. I even kept getting those checks all the years I was living in the US as a student. Not that I complained. I guess Canadian taxpayers were only too happy to reimburse me for paying sales tax to the US government.

Edited November 24, 2011 by Bonam

[bush_cheney2004]

Yeah, the system is pretty broken too. I even kept getting those checks all the years I was living in the US as a student. Not that I complained

How does the generous and benevolent government know how much GST/HST to rebate back and to whom?

[Bonam]

How does the generous and benevolent government know how much GST/HST to rebate back and to whom?

They don't. It's an approximate calculation based on income (as filed on your tax return). All you do to apply for the credit is submit your tax return as always and check the "apply for gst/hst credit" box, basically. If your income is low enough, you will get the 4 rebate checks in the coming year.

http://www.servicecanada.gc.ca/eng/goc/gst_credit.shtml

When I was getting the credit, it amounted to about $700/year, which corresponds to the tax on about $6000 of taxable purchases. Rent and many groceries not being taxable, that sounds about right for what a low income person would be spending on taxable products in a year.

Edited November 24, 2011 by Bonam

[bush_cheney2004]

They don't. It's an approximate calculation based on income (as filed on your tax return). All you do to apply for the credit is submit your tax return as always and check the "apply for gst/hst credit" box, basically. If your income is low enough, you will get the 4 rebate checks in the coming year.

What happens if you are so damn poor and oppressed by the 1% that you don't even have to file a tax return?

[Bonam]

What happens if you are so damn poor and oppressed by the 1% that you don't even have to file a tax return?

If you want the credit, you have to file a return, even if it shows an income of $0.

[dre]

The various layers of the Canadian government spend about 700 billion per year annually.

http://www40.statcan.ca/l01/cst01/govt48a-eng.htm

(That's "consolidated" spending which includes federal and provincial spending). That's 40,000 per taxpayer (there are about 17 million employed people in Canada). Do you know how much you have to be making to pay $40,000 annually in taxes? Right around 150k or so, which also happens to be the threshold to be in the 1% by income. So if your argument is that everyone who is contributing less than 40k per year in taxes is a leech, fine, but that pretty much means everyone in Canada except the 1% are leeches.

Actually a person making 150k per year pays a lot more than 40k. A person making more than $128,800 pays 29% in federal income tax alone. So a guy with a 150k taxable income will pay over 45k just in federal income tax.

Then if he lives in BC he will pay at these rates ON TOP of that... Im not going to do the math but its about another 15k.

5.06% on the first $36,146 of taxable income, +

7.7% on the next $36,147, +

10.5% on the next $10,708, +

12.29% on the next $17,786, +

14.7% on the amount over $100,787

So that person has paid 60k just in direct income taxes. But thats just the beginning... your 700billion dollar number includes property taxes, consumption taxes, and health care premiums. In many cases a 150k earner will pay another 10-20K here.

Really an income of about 60-70k thousand is probably the break even point not 150k. As a nation we pay almost half of what we make in some form of taxes. Tax Freedom day was on June 6th this year but would have been on June 22nd if the government had taxed to fund all its spending instead of running a defecit. Every penny the nation makes before June 6 is paid in taxes. Very close to half.

Edited November 24, 2011 by dre

[cybercoma]

No. Someone living on a minimum wage job in Canada will live luxuriously by almost any global or historical standard.

Yeah. That's great. Someone making minimum wage here will live better than anyone in the developing world. It's good to know what your standards are. I'm glad even the CPC isn't this stupid.

[bush_cheney2004]

Yeah. That's great. Someone making minimum wage here will live better than anyone in the developing world. It's good to know what your standards are. I'm glad even the CPC isn't this stupid.

But so many other feel good causes encourage just such a global perspective. Why make an exception in this case?

[Bonam]

Actually a person making 150k per year pays a lot more than 40k. A person making more than $128,800 pays 29% in federal income tax alone. So a guy with a 150k taxable income will pay over 45k just in federal income tax.

Then if he lives in BC he will pay at these rates ON TOP of that... Im not going to do the math but its about another 15k.

5.06% on the first $36,146 of taxable income, +

7.7% on the next $36,147, +

10.5% on the next $10,708, +

12.29% on the next $17,786, +

14.7% on the amount over $100,787

So that person has paid 60k just in direct income taxes. But thats just the beginning... your 700billion dollar number includes property taxes, consumption taxes, and health care premiums. In many cases a 150k earner will pay another 10-20K here.

Really an income of about 60-70k thousand is probably the break even point not 150k. As a nation we pay almost half of what we make in some form of taxes. Tax Freedom day was on June 6th this year but would have been on June 22nd if the government had taxed to fund all its spending instead of running a defecit. Every penny the nation makes before June 6 is paid in taxes. Very close to half.

You omitted all the deductions one can take, and taxable income starts after the personal exemption which adds another 10k or whatever it is now. You also ignored the fact that tax is bracketed. You don't suddenly pay 29% on all your income the moment you exceed 128.8k. You only pay 29% on the amount above 128.8k. I'm pretty sure you know that. Someone making 150k pays 32k in federal income tax, not 45k.

And even if the net effective rate is about 50% as you say, then the breakeven would be at 80k, not 60-70. In any case, whatever the number is, only a small % of Canadian taxpayers make enough to "breakeven" by your standards.

In that regard, I believe your argument is without much meaning.

The reality is, even someone working at a relatively low paying job is contributing to the economy. Our economy would not run without people working retail and service jobs at low wage. While the direct income tax a cashier at a retail store is paying is low or zero, they enable other people to buy products and pay sales tax on them, and they enable the store to make money and pay corporate tax on it, and they enable the producers to have their goods sold to consumers, allowing them to run their industries profitably and pay tax on that.

Based on the above, my viewpoint would be that anyone who holds a productive job in the private sector is very likely a net contributor to the economy.

Edited November 24, 2011 by Bonam

[dre]

Based on the above, my viewpoint would be that anyone who holds a productive job in the private sector is very likely a net contributor to the economy.

Thats entirely unclear. The more crappy low paying jobs there is in the economy the more pressure there is on people with good jobs to pay for services. Thats why governments set minimum wages in the first place. Low paying jobs are a drain on the economy. They mean that everyone else has to pay more taxes.

If they allowed companies to pay $2 an hour then the rest of the tax paying public would have to subsidize even MORE of those workers expenses.

Edited November 24, 2011 by dre

[dre]

Thats entirely unclear. The more crappy low paying jobs there is in the economy the more pressure there is on people with good jobs to pay for services. Thats why governments set minimum wages in the first place. Low paying jobs are a drain on the economy. They mean that everyone else has to pay more taxes.

If they allowed companies to pay $2 an hour then the rest of the tax paying public would have to subsidize even MORE of those workers expenses.

And even if the net effective rate is about 50% as you say, then the breakeven would be at 80k, not 60-70. In any case, whatever the number is, only a small % of Canadian taxpayers make enough to "breakeven" by your standards.

No because as you pointed out that 50% is not their only contribution to the economy. They also consume. 60-70 is about right, actually even 50K probably does the trick since people cause businesses to pay taxes when they consume. And realistically your 40K number is way off anyways... because you only split the pie up between 17 million people. But even retirees that arent paying income tax are paying into most of the other categories in your origional link. They pay consumption taxes, property taxes, and they also consume causing others to pay taxes.

Really that break-even number is probably only about 40K per year. Everybody who makes over that is at least covering the cost of their own services.

Edited November 24, 2011 by dre

[Bonam]

Really that break-even number is probably only about 40K per year. Everybody who makes over that is at least covering the cost of their own services.

Sorry but you can't arrive at a number by randomly picking it out of your head with not even the slightest attempt to quantify any of the factors involved. Furthermore, your grievous and fundamental error with the tax calculation above, which I pointed out and you ignored, does not help to build confidence in your completely unbacked estimates.

Given the complete lack of anything but handwaving as evidence for your assessment, I'll stick with my prior opinion. If you want to talk about whether someone is paying for the cost of their services in terms of the taxes they pay, it's at a very minimum 80k+ and probably closer to the original 150k number I quoted. But if you just want to determine if someone is contributing to the economy, anyone with a productive private sector job likely qualifies, since they facilitate economic activity that is many-fold their actual wage.

Edited November 24, 2011 by Bonam

[dre]

Sorry but you can't arrive at a number by randomly picking it out of your head with not even the slightest attempt to quantify any of the factors involved. Furthermore, your grievous and fundamental error with the tax calculation above, which I pointed out and you ignored, does not help to build confidence in your completely unbacked estimates.

Given the complete lack of anything but handwaving as evidence for your assessment, I'll stick with my prior opinion. If you want to talk about whether someone is paying for the cost of their services in terms of the taxes they pay, it's at a very minimum 80k+ and probably closer to the original 150k number I quoted. But if you just want to determine if someone is contributing to the economy, anyone with a productive private sector job likely qualifies, since they facilitate economic activity that is many-fold their actual wage.

Sorry but you can't arrive at a number by randomly picking it out of your head with not even the slightest attempt to quantify any of the factors involved. Furthermore, your grievous and fundamental error with the tax calculation above, which I pointed out and you ignored, does not help to build confidence in your completely unbacked estimates.

Relax... we arent writing a university thesis here were having a conversation. My error calculating income tax was no more agregious than your error in coming up with that 40K number. Thats clearly wrong for the reason I explained. And your 150k number is mathematically impossible because the per capital income is less than 50K. Youre playing just as fast and loose with the data as I am.

All I did is grab the number for the 128k+ bracket from here...

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

Anyhow...calculating the breakeven point is actually pretty easy. Since roughly the right ammount of taxes are collected in the entire economy to fund the government and its programs, the break even point should be pretty close to (but a bit above) the median per capita income which I think is about 40k. 45-50K is roughly the number youre looking at.

Edited November 25, 2011 by dre

[CPCFTW]

Thats entirely unclear. The more crappy low paying jobs there is in the economy the more pressure there is on people with good jobs to pay for services. Thats why governments set minimum wages in the first place. Low paying jobs are a drain on the economy. They mean that everyone else has to pay more taxes.

If they allowed companies to pay $2 an hour then the rest of the tax paying public would have to subsidize even MORE of those workers expenses.

Completely untrue. Low wages reduce the cost of living. Furthermore, low wages means the employers are making greater profits and paying taxes on those profits. I already addressed this.

[CPCFTW]

Anyhow...calculating the breakeven point is actually pretty easy. Since roughly the right ammount of taxes are collected in the entire economy to fund the government and its programs, the break even point should be pretty close to (but a bit above) the median per capita income which I think is about 40k. 45-50K is roughly the number youre looking at.

Pretty sure we're massively in debt and not paying for the services we get through taxes.

And why would you use the median? Do you not understand math or averages? Another blatant error.

You obviously haven't put much thought or research into these arguments. You're just arguing from emotions as is usual from the left.

Edited November 25, 2011 by CPCFTW

[dre]

Pretty sure we're massively in debt and not paying for the services we get through taxes.

And why would you use the median? Do you not understand math or averages? Another blatant error.

You obviously haven't put much thought or research into these arguments. You're just arguing from emotions as is usual from the left.

No thats not an error at all. If the government of an economy with 10 participants requires $100 in funding then the breakeven point is $10. If everyone paid ten dollars in taxes then the government would be funded. If some participants are going to pay less it means that some will have to pay more.

[CPCFTW]

No thats not an error at all. If the government of an economy with 10 participants requires $100 in funding then the breakeven point is $10. If everyone paid ten dollars in taxes then the government would be funded. If some participants are going to pay less it means that some will have to pay more.

Yes it is an error. You obviously have no idea what median is.

What if those 10 participants paid taxes as follows:

1 x $91, and 9 x $1

Then the median income would be the income that generated $1 of tax revenue. By your logic that is the income level required to be paying your share of government services. But it was the one guy paying $91 of taxes that paid for 91% of the services.

Hence, the average income is the figure you should be using.

Personally, I think that anyone that is employed at any wage, is helping the government income statement.

High paying jobs will be paying for their own government services and also the services of others.

Low wage earners will be reducing the burden on high wage earners to support them, and low wage earners will presumably be employed by someone who can profit off of their labour and pay taxes/consume with that profit.

Moral of the story: all jobs are good, minimum wage is bad.

Edited November 26, 2011 by CPCFTW

[CPCFTW]

"Moral of the story: all jobs are good, minimum wage is bad."

I would like to expand on my moral and redirect this thread back towards the problems caused by free trade.

I've always thought that a "minimum income" would be a better solution than minimum wages.

Basically, governments would subsidize low wage jobs by guaranteeing a minimum income.

For example, a manufacturer could set up shop in Ontario and pay its workers $5/hr. The government would top up this income by paying the workers another $5.25/hr to guarantee a minimum income of $10.25/hr. The government could even take an equity stake in the manufacturing company to help pay for the employees "minimum income". The taxation of export profits would also help pay for this expense.

This may contravene free trade agreements, but it would certainly help bring some of these jobs back from overseas.

I'd rather my tax dollars went towards subsidizing workers than subsidizing laziness.

[Jack Weber]

"Moral of the story: all jobs are good, minimum wage is bad."

I would like to expand on my moral and redirect this thread back towards the problems caused by free trade.

I've always thought that a "minimum income" would be a better solution than minimum wages.

Basically, governments would subsidize low wage jobs by guaranteeing a minimum income.

For example, a manufacturer could set up shop in Ontario and pay its workers $5/hr. The government would top up this income by paying the workers another $5.25/hr to guarantee a minimum income of $10.25/hr. The government could even take an equity stake in the manufacturing company to help pay for the employees "minimum income". The taxation of export profits would also help pay for this expense.

This may contravene free trade agreements, but it would certainly help bring some of these jobs back from overseas.

I'd rather my tax dollars went towards subsidizing workers than subsidizing laziness.

So,you're for gov'ts owning stakes in ostensibly private businesses?

[CPCFTW]

So,you're for gov'ts owning stakes in ostensibly private businesses?

I already mentioned in another thread that I wouldn't mind if governments had no voting rights or too large a stake. A stake in a private business would definitely be a better return on investment than heroine injection houses and welfare cheques. My reasoning in the previous post I made on this was that it shouldn't be hard to find private investment opportunities with expected returns greater than the 1-2% cost of capital for Canadian government (based on t-bills and GOC bonds). I specifically stated that they should be non-voting shares to avoid politicians influencing private boards/management for political gain. The problem with public ownership of business is when the government is in charge of managing the business. The companies should be free to cut costs with layoffs, firings, outsourcing, or other measures without any political ramifications... the relationship should be a purely financial consideration.

I wish our government would employ more financial analysts, portfolio managers, equity/credit analysts, investment bankers, etc. rather than environmental scientists and political science or sociology grads. I'm sure they could build a hell of a portfolio with our tax dollars.

Edited November 26, 2011 by CPCFTW