Ontario looking at basic income guarantee

[Bonam]

Taxes collected by Canadian governments are about 600 billion. The GDP is 1.8 trillion so as a percentage of GDP taxes are about 33%. I don't know where you got the 42% number from.

The Canadian federal government operating expenses are around $300 billion/year right now, the provinces sum to about $400 billion/year, cities are another $150 billion/year or so. That all adds up to $850 billion, or about 42% of GDP which is I think would be close to $2 trillion by now since it was ~$1.8 trillion in 2013 and we've seen a ~2% growth each year.

More importantly, you are assuming that the public would support a significant increase in taxation levels for an income redistribution scheme. I believe this is a wrong assumption in the US and in Canada no matter what the differences in taxation levels.

No, I'm making no such assumption. I'm merely presenting the numbers and then commenting on them. 57% of GDP is an economically crippling tax burden, and is thus not affordable, regardless of what the public would support. On the other hand, many advanced economies successfully function with taxes at 45% of GDP. Of course, the political environment in the US would make it very unlikely to want to implement such a program, especially not on a federal level, but if the political environment was such that Americans did support such a program, they could likely afford it, unlike Canada. That's all I was saying.

[TimG]

The Canadian federal government operating expenses are around $300 billion/year right now

I believe you are double counting expenses. Take a look at the annual report from Ontario and you will see total expenses are 129 billion and revenues are 118 billion but those revenues include transfers from the federal government which would be reported as expenses by the federal government: http://www.fin.gov.on.ca/en/budget/paccts/2015/15_cfs.html

If you look at actual monies collected in taxes I think you will end with $600 billion.

[dre]

If printing money solved government money problems then no government would ever run deficits. Unfortunately we are living in the real world where every action has consequences and the consequences of printing money to fund government spending wishlists were quite severe in every country that tried.

What were the consequences of Lincoln printing green-backs to win the civil war?

Canada has printed billions of interest free dollars btw. About 5% of our money supply. If the government printed money within the confines of a desired CPI range it wouldn't have problems. If it printed it too fast then wages would go down and prices of things would go up, but a little more inflation probably wouldn't hurt.

We could mint a 5 dollar coin and put a billion dollars worth of them into circulation each year without too much risk.

I actually think we could use a bit more inflation.

[TimG]

If the government printed money within the confines of a desired CPI range it wouldn't have problems.

Well, that is the entire point: governments have to restrain themselves. Central banks don't have an infinite pool of money that can be tapped without consequences. If inflation suddenly reappears then government spending would have to be cut suddenly which means using 'printed money' to fund ongoing program expenses is a bad idea. It could be justified to cover one expenses like a war or to cushion the effects of an event like the 2008 banking crisis.

[dre]

Well, that is the entire point: governments have to restrain themselves. Central banks don't have an infinite pool of money that can be tapped without consequences. If inflation suddenly reappears then government spending would have to be cut suddenly which means using 'printed money' to fund ongoing program expenses is a bad idea. It could be justified to cover one expenses like a war or to cushion the effects of an event like the 2008 banking crisis.

Yeah I agree. It would be risky to fund ongoing programs that way. Still... while inflation is below desired levels the government should make as much interest free money as it can.

[Smoke]

"I actually think we could use a bit more inflation."

Yeah because the price of food, electricity, and other essentials isn't rising fast enough. Plus it would be nice to see house prices rise some more, as they are so undervalued.

Where's the sarcasm button when you need it.

Edited May 6, 2016 by Smoke

[Topaz]

The Swiss will be voting next month if they want an guaranteed income of 2600 monthly and it doesn't matter if one works or not. http://www.usatoday.com/story/news/world/2016/05/05/switzerland-referendom-monthly-income-tax-free/83940610/