The Budget 2005

[Grantler]

In fact, the books are more than balanced; the federal government expects to post a $4-billion "underlying budgetary surplus" next year.

In that context, Goodale's plan promises a broad sweep of tax relief measures.

Low-income earners, for example, will benefit from the move to increase the amount Canadians can earn tax-free from just over $8,000 to $10,000. As a result, finance officials expect approximately 860,000 people to be removed from the tax roll.

Canadians who take advantage of tax-sheltered RRSPs are also promised a break, with a boost in contribution limits to $22,000 by 2009. And those who have money in RRSPs will also have more freedom on how to spend it -- with the immediate elimination of foreign content restrictions.

Businesses of all sizes can also expect a break, as the government begins a five-year plan to phase out the two per cent corporate surtax. The general corporate income tax rate will also be cut in four years, dropping two points to 19 per cent.

In terms of big-ticket spending, Goodale's plan delivers on some long-anticipated spending priorities.

Funding for the health-care deal reached with the premiers is included, as is the often-discussed $5-billion, five-year pledge to kickstart a national daycare program. Canada's military, which has long complained of neglect, is also paid significant attention -- with a $12.8 billion promise that Goodale says amounts to the biggest boost in military spending in 20 years.

Other highlights of the federal budget plan include:

- An additional $3.4 billion in international assistance, in line with United Nations Millennium Development Goals

- Increasing Guaranteed Income Supplement benefits for low-income seniors by $2.7 billion over five years.

- $1 billion for an innovative Clean Fund to further stimulate cost-effective action to reduce greenhouse gas emissions in Canada.

- Implementing the pledge to share $5 billion worth of gas tax revenue over the next five years: In 2005–06, the share of the federal gas tax dedicated to cities and communities will be $600 million. By 2009–10, the share will increase to $2 billion, representing 5 cents per litre.

- $4.7 billion over five years, including $1 billion to cut greenhouse gases and $200 million to boost wind energy

- $1 billion to further strengthen Canada's national security

- $735 million over the next five years, in addition to the

- $700 million over five years for Aboriginal health programs announced in September 2004

- $398 million over five years to help settle and integrate new immigrants to Canada

- $345 million over the next five years for First Nations early learning and child care, special education, and child and family services.

- $340 million over the next five years for First Nations housing on reserves, Aboriginal languages and culture, and the Aboriginal Healing Foundation.

- $60 million for the CBC in 2005–06

- $70 million a year to Sport Canada, doubling its ongoing funding to $140 million in 2005–06 from $70 million in 2004–05.

[BQSupporter]

Its interesting that the only party that supports this Budget is the Conservative Party.

Interesting a Conservative budget for a Conservative Government.

[Argus]

In fact, the books are more than balanced; the federal government expects to post a $4-billion "underlying budgetary surplus" next year.

They are increasing spending by over 10%. We still have a very large debt and I'd rather see the money going on that.

Low-income earners, for example, will benefit from the move to increase the amount Canadians can earn tax-free from just over $8,000 to $10,000. As a result, finance officials expect approximately 860,000 people to be removed from the tax roll.

I don't approve of people paying no taxes. If you're not contributing then why should you be able to vote and influence how money is spent?

Funding for the health-care deal reached with the premiers is included, as is the often-discussed $5-billion, five-year pledge to kickstart a national daycare program. Canada's military, which has long complained of neglect, is also paid significant attention -- with a $12.8 billion promise that Goodale says amounts to the biggest boost in military spending in 20 years.

These figures always sound better when you add them up over 5 years, don't they? As I understand it the military commitments the Liberals have made (afghanistan, bosnia, Hait, etc) have caused the miltiary to be about $1.5 billion in the hole per year. So most of that extra money is merely going to allow them to balance the books. They still need a massive infusion of capital funding to buy new equipment, which is rotting away. No sign of that in the budget. The money for health care is nice, but won't do much. health care needs to be restructured but they haven't got the balls or the will. As for daycare, it's unaffordable at this time. Maybe if we get the debt paid off we might be able to eventually.

- An additional $3.4 billion in international assistance, in line with United Nations Millennium Development Goals

Giving away billions which will help few or no one. There are systemic problems with third world governmental structures which mean that no amount of money will do much to aleviate their problems.

- $4.7 billion over five years, including $1 billion to cut greenhouse gases and $200 million to boost wind energy

Basically grants to corporations and individuals to put in energy conservation equipment or materials.

- $398 million over five years to help settle and integrate new immigrants to Canada

Trying to teach immigrants how to speak English because we (the government and its immigrant lobby groups) think it's not politically correct to require that they learn that before coming here.

- $345 million over the next five years for First Nations early learning and child care, special education, and child and family services.

Trying to cope with the mess of native alcoholism. A losing effort until systemic problems of reserve culture and economics are addressed.

[caesar]

I don't approve of people paying no taxes. If you're not contributing then why should you be able to vote and influence how money is spent?

There are other taxes other than income tax. gst, pst and all sorts of licenses and fees. Everything we buy has taxes paid on it and that cost passed to the consumer. Income tax was just a temporary tax introduced to pay for WW1.

[Newfie Canadian]

I don't know if was good or bad, but one thing I know for sure is it was a political budget. It's a great budget for the Liberals to run a campaign on if the opposition want to vote it down.

[August1991]

Low-income earners, for example, will benefit from the move to increase the amount Canadians can earn tax-free from just over $8,000 to $10,000. As a result, finance officials expect approximately 860,000 people to be removed from the tax roll.

A key point. If the feds rolled other payroll "taxes" (CPP, EI) into general taxes and treated them for what they are (transfers to poor people), then many people would be out of the tax loop completely.

As it is, almost 1 million people are no longer involved in the tax business except to claim a refund.

This is what Harper has been arguing all along. Both PM PM and Harper have gone up in my opinion. PM PM because he did it. Harper because he was not partisan.

From what I can see, this is a very savvy budget. It cuts the bureaucracy but then throws some money their way in possible programmes. Politically, it looks like the Liberals are adjusting priorities.

I would have hoped for more:

In fact, the books are more than balanced; the federal government expects to post a $4-billion "underlying budgetary surplus" next year.

They are increasing spending by over 10%. We still have a very large debt and I'd rather see the money going on that.

I don't care whether the money is used to reduce the debt or cut taxes. The key point is that spending increases by 10% (over five years?).

[playfullfellow]

As near as I can tell this budget wont affect me personally or economically in any degree. I could use a tax break but it won't happen this time around

- Increasing Guaranteed Income Supplement benefits for low-income seniors by $2.7 billion over five years.

All I can say is that it is about time, we need to respect our elders and look after them.

- $1 billion for an innovative Clean Fund to further stimulate cost-effective action to reduce greenhouse gas emissions in Canada.

Kiss another billion goodbye

Implementing the pledge to share $5 billion worth of gas tax revenue over the next five years: In 2005–06, the share of the federal gas tax dedicated to cities and communities will be $600 million. By 2009–10, the share will increase to $2 billion, representing 5 cents per litre

With the city council we have here, we will probably get a new art centre or something instead of getting rid of the VW eating potholes we have around here.

- $4.7 billion over five years, including $1 billion to cut greenhouse gases and $200 million to boost wind energy

More hot air blowing in the wind I see

- $1 billion to further strengthen Canada's national security

This should go to the RCMP instead

$700 million over five years for Aboriginal health programs announced in September 2004

Unfortunately this money wont change anything

$398 million over five years to help settle and integrate new immigrants to Canada

Hmmmmmmmmmmm, I dont seem to remember my folks having any problem learning English when we first immigrated to Canada. They had to pay for their own EAS classes.

- $345 million over the next five years for First Nations early learning and child care, special education, and child and family services.

Again I hope it helps but I have my doubts

- $60 million for the CBC in 2005–06

Definately money that could be better spent somewhere else.

- $70 million a year to Sport Canada, doubling its ongoing funding to $140 million in 2005–06 from $70 million in 2004–05.

This wont help the underexercised, overweight people running around. Probably wont help us get anymore medals in the future either.

I guess this budget could have been a lot worse. I would have liked to see some more go to the military so they can get back up to snuff. As for the enviromental spending, I would like to see some more incentives for people upgrading their in home heating and energy systems. I fear only the big guys will benefit from this money, as always. I would also like to see some more of our debt paid off, that would leave a better system for future generations if they were debt free. Tax cuts for us middle income guys will never happen so why bother asking for it.

[Grantler]

In fact, the books are more than balanced; the federal government expects to post a $4-billion "underlying budgetary surplus" next year.

*****I think that the bellyaching about paying the debt down with every nickel of surplus has to end. We are operating on what, our 8th, 9th, or 10th balanced budget? That is something unheard of in a welfare state. If they wanted to pay it down, they would, and they do. They know alot more than you or I abuot paying down a debt that has a lot more to do with the economy than the 4 billion dollars they are holding onto.

Low-income earners, for example, will benefit from the move to increase the amount Canadians can earn tax-free from just over $8,000 to $10,000. As a result, finance officials expect approximately 860,000 people to be removed from the tax roll. I don't approve of people paying no taxes. If you're not contributing then why should you be able to vote and influence how money is spent?

****This is a rediculous statement on your behelf. Bumping the tax-free amount up from $8,000 to $10,000 is a very noble move by the government. If you think that a human being can live a comfortable adult life off of even $10,000 you are missing the point. There are for more taxes than income tax so why do we desire to see the students/poor dishing out what little money they are going to have to put into the economy anyway to pay for the cost of living?

Funding for the health-care deal reached with the premiers is included, as is the often-discussed $5-billion, five-year pledge to kickstart a national daycare program. Canada's military, which has long complained of neglect, is also paid significant attention -- with a $12.8 billion promise that Goodale says amounts to the biggest boost in military spending in 20 years.

These figures always sound better when you add them up over 5 years, don't they? As I understand it the military commitments the Liberals have made (afghanistan, bosnia, Hait, etc) have caused the miltiary to be about $1.5 billion in the hole per year. So most of that extra money is merely going to allow them to balance the books. They still need a massive infusion of capital funding to buy new equipment, which is rotting away. No sign of that in the budget. The money for health care is nice, but won't do much. health care needs to be restructured but they haven't got the balls or the will. As for daycare, it's unaffordable at this time. Maybe if we get the debt paid off we might be able to eventually.

****The federal government said it will spend $2.7 billion between 2007 and 2010 on helicopters, trucks, aircraft and a training facility for JTF2, Canada's special forces unit. This is stated clearly within the budget if you would take time to read it before spazzing out about it. Jesus Christ. If the military is commending it, what gives someone like you the desire to harp on about it on half true facts?

An additional $3.4 billion in international assistance, in line with United Nations Millennium Development Goals Giving away billions which will help few or no one. There are systemic problems with third world governmental structures which mean that no amount of money will do much to aleviate their problems.

*****But, I am sure you are one of the first people to support UN decisions that defend human rights and the like. We have an obligation to the Organization and they suggested that we need to increase out international assisstance. Believe it or not, we are one of the more desirable places in the world and we have some obligations to the UN and the world community because of it whether we like it or now. If you look at the statement, "in line wit hthe United Nations Millennium Development goals."

$398 million over five years to help settle and integrate new immigrants to Canada Trying to teach immigrants how to speak English because we (the government and its immigrant lobby groups) think it's not politically correct to require that they learn that before coming here.

****While I do disagree with this point, it is only $398 million dollars and the immigrant population of Canada is what the nation was built on correct? We have to accept that in order to compete internationally we need to attract a high quality immigrant and giving them some sort of benefits, ie train in English, is not such a bad idea when many of our native borns are going elsewhere.

$4.7 billion over five years, including $1 billion to cut greenhouse gases and $200 million to boost wind energy Basically grants to corporations and individuals to put in energy conservation equipment or materials

****Well, in a competitive global marketplace we really have no choice if we want to save the environment. We need to give industry a chance to move in the proper direction with some easy urging. They could always pack up and tack their jobs to China where the words environmental protection do not exist.

[Grantler]

Hopefully that messege above clears up.

[Bakunin]

I think Paul Martin is a conservative but mostly an opportunist... He want to be part of the star wars system, he will say we wont for political purpose but we will by the backdoor. He doesnt like kyoto, but for political purpose we are part of kyoto but don't expect major change... we will just fake to participate... Its the same thing with all other hot issue... he pretend to be liberal but in is head he is a conservative.

There is 1 thing i dont like about this budget, the federal is invading the provincial juridiction... Its a vicious strategy, they let the province die with no money to take there place slowly.

[Argus]

I don't approve of people paying no taxes. If you're not contributing then why should you be able to vote and influence how money is spent?

There are other taxes other than income tax. gst, pst and all sorts of licenses and fees. Everything we buy has taxes paid on it and that cost passed to the consumer. Income tax was just a temporary tax introduced to pay for WW1.

Then they should have increased the GST rebates for the poor, which affects them disproportionately, while still maintaining income taxes.

On the other hand, I saw an analyses which suggest this increase in the personal examption is basically smoke and mirrors and really, given inflation and the five year delay before they really begin to take affect, won't mean much at all.

[Argus]

Low-income earners, for example, will benefit from the move to increase the amount Canadians can earn tax-free from just over $8,000 to $10,000. As a result, finance officials expect approximately 860,000 people to be removed from the tax roll.

A key point. If the feds rolled other payroll "taxes" (CPP, EI) into general taxes and treated them for what they are (transfers to poor people), then many people would be out of the tax loop completely.

As it is, almost 1 million people are no longer involved in the tax business except to claim a refund.

Like most of their tax refunds this is back end loaded. First, you have to believe they will carry through on this given it is most unlikely this government will last the four-five years needed to bring these measures into being.

Second, given inflation over the last couple of years, and the inflation we can expect over the next five years this really doesn't mean a lot. As was pointed out in today's paper, the average working poor/ min wage earns about $16k now. While in five years it'll be closer to $20k. So the worker is still going to be taxed on about half his or her income.

[Argus]

They are increasing spending by over 10%. We still have a very large debt and I'd rather see the money going on that.

I don't care whether the money is used to reduce the debt or cut taxes. The key point is that spending increases by 10% (over five years?).

the key point is that spending, actual operational spending will have risen by about 60% during this decade. There is nothing that justifies that, especially given a huge debt load we should be doing everything possible to pay off for when bad times come back. Which is inevitable.

[Argus]

*****I think that the bellyaching about paying the debt down with every nickel of surplus has to end.  We are operating on what, our 8th, 9th, or 10th balanced budget?  That is something unheard of in a welfare state.  If they wanted to pay it down, they would, and they do.  They know alot more than you or I abuot paying down a debt that has a lot more to do with the economy than the 4 billion dollars they are holding onto.

The "bellyaching" you are speaking about comes from people with a keen sense of justice who believe we should not push our debts onto our children - as the boomers did to us. The debt you are blithely ignoring continues to consume about 20 cents of every dollar we pay in taxes.

And you might think things will always be rosey but those of us a little older can remember times when they weren't, when inflation and unemployment were well into double digits. Do a little math and consider what our debt payments would look like at 12-15% instead of 2%, and what that would do to the budget.

Put another way, if I pay off my brand new mortage in 10-12 years instead of over 25 I will wind up saving about $40,000 in interest. That is why I intend to try to pay it off as quickly as possible. As Canadians, we should consider the half trillion dollar debt our mortgage, and try to pay it off as quickly as possible. That doesn't mean I expect us to live in sackloth while doing it - certainly don't intend to personally - but we should not be wasting money or refunding it while we still have a huge debt.

If you're not contributing then why should you be able to vote and influence how money is spent?

This is a rediculous statement on your behelf. Bumping the tax-free amount up from $8,000 to $10,000 is a very noble move by the government. If you think that a human being can live a comfortable adult life off of even $10,000 you are missing the point. There are for more taxes than income tax so why do we desire to see the students/poor dishing out what little money they are going to have to put into the economy anyway to pay for the cost of living?

Then they shouldn't be voting. Simple tradoff. If you believe you cannot contribute, and don't, then you shouldn't be permitted to vote. No representation without taxation - as it were.

The federal government said it will spend $2.7 billion between 2007 and 2010 on helicopters, trucks, aircraft and a training facility for JTF2, Canada's special forces unit.  This is stated clearly within the budget if you would take time to read it before spazzing out about it.  Jesus Christ.  If the military is commending it, what gives someone like you the desire to harp on about it on half true facts?

The money the government is putting into the military is about half what a recent Senate commitee said was the minimum needed to rebuild it. The military currently runs at a deficit due to the operational costs of the missions the government assigns it. Most of this money will simply be used to make up that deficit, with little available for all the new equipment they need. There is no commitment for the large ticket items the military needs, such as a new fleet of hercules, preferably some long range transport aircraft, new jet fighters, new armored vehicles and armored personnel carriers, transport and supply ships, or even the basic neccesities like radios, boots and flack jackets the infantry is so short of. As for "the military" commending the budget, you are speaking of senior officers whose only alternative to commending the budget is immediate retirement.

An additional $3.4 billion in international assistance, in line with United Nations Millennium Development Goals Giving away billions which will help few or no one. There are systemic problems with third world governmental structures which mean that no amount of money will do much to aleviate their problems.

*****But, I am sure you are one of the first people to support UN decisions that defend human rights and the like.  We have an obligation to the Organization and they suggested that we need to increase out international assisstance.

When has the Un made any decision to defend human rights? More importantly, when have they followed through on empty resolutions with action? We have no obligation to the UN, and certainly not to give money away on losing subsidies to poorly run countries which spend most of their own money on their military.

$398 million over five years to help settle and integrate new immigrants to Canada Trying to teach immigrants how to speak English because we (the government and its immigrant lobby groups) think it's not politically correct to require that they learn that before coming here.

****While I do disagree with this point, it is only $398 million dollars and the immigrant population of Canada is what the nation was built on correct?  We have to accept that in order to compete internationally we need to attract a high quality immigrant and giving them some sort of benefits, ie train in English, is not such a bad idea when many of our native borns are going elsewhere.

Only 400 million? Please. This nation was built on hard work and self reliance. Immigrants came here, worked their asses off, and either succeeded or went home. I'm in favour of resuming that old tradition. Even most immigrants polled believe that it is reasonable to expect new immigrants to speak the language before being allowed to come here. And there are enough potential immigrants that we could make this demand and still get more than enough needed - presuming we really need any, or at least, many. Why, btw, do you believe we need immigrants in order to "compete internationally"? Japan accepts no immigrants. Do you believe they are not internationally competitive?

$4.7 billion over five years, including $1 billion to cut greenhouse gases and $200 million to boost wind energy Basically grants to corporations and individuals to put in energy conservation equipment or materials

****Well, in a competitive global marketplace we really have no choice if we want to save the environment.  We need to give industry a chance to move in the proper direction with some easy urging.  They could always pack up and tack their jobs to China where the words environmental protection do not exist.

Perhaps you have failed to notice, but that is exactly what industries are doing. And we are not going to save the environment with subsidies. When oil gets scarce enough that the prices rise through the roof then you are going to see massive conversion to alternative sources, as well as a drastic increase in conservation.

[Fortunata]

It is an election budget in my view.

[August1991]

Put another way, if I pay off my brand new mortage in 10-12 years instead of over 25 I will wind up saving about $40,000 in interest.

Argus, the government is fundamentally unlike you or me. Your comparison is dead wrong and merely shows an ignorance of what government is.

It makes no difference to you whether the government takes money from your bank account (taxes you) for its purchases or it uses your credit cards (borrows in your name) for its purchases. In either case, you can undo what the government does.

It makes no differenece because the government is unlike any other institution. The government alone has access to your bank accounts or your credit cards.

If I use your example above of paying off your mortgage quickly, perhaps PM PM should not pay down the debt, cut your taxes further, leave you more cash, and then you could retire your mortgage faster. Instead, he is retiring (low interest) debt and without the tax cut, you can't pay back your mortgage (higher interest).

It seems to me a fundamental principle of finance is that you should pay off your high interest debt first before paying off the low interest debt. By running a budget surplus, PM PM is doing the exact opposite. And you say he's wise!

In this debate about debt and deficits, one too easily loses sight of the real issue: What is the government buying with your credit cards or cheque book.

Then they shouldn't be voting. Simple tradoff. If you believe you cannot contribute, and don't, then you shouldn't be permitted to vote. No representation without taxation - as it were.

Here too you're wrong. If we feel society should distribute from the rich to the poor, then votes should not be dependent on taxes paid.

The more pertinent point is to simplify the tax system, or at least make its effects less pernicious. The fewer people the Revenue Agency must deal with, the better. People earning below, say, $15000 should not have to file.

Payroll taxes (CPP, EI) should be rolled into general taxes. Corporate taxes should be abolished. The GST and PST should be harmonized, extended to all goods and services and be embedded in the selling price. And lastly, we should pay for using all roads as is done north of Toronto on the 407.

In 50 years, our tax system will resemble what I just described. The sooner we get there, the better.

[playfullfellow]

The more pertinent point is to simplify the tax system, or at least make its effects less pernicious. The fewer people the Revenue Agency must deal with, the better. People earning below, say, $15000 should not have to file.

I agree with you here august, the simplification and efficiency aspect should be spread across all government agencies but we all know that is a pipe dream. Looking at me own budget 15,000 is definately a good benchmark for the cutoff. This should be implemented immediately, not over 5 years either. A lot can happen in 5 years to blow this plan out of the water.

And lastly, we should pay for using all roads as is done north of Toronto on the 407.

Why should we pay tolls when we pay fuel taxes that are supposed to pay for all our roads? If the feds actually spent 50% plus of the collected fuel taxes on roads like other countries, then we would better roads. I think the current figure is around 16%. Temporary tolls are a good idea but these tend to turn into a permanent tax. Just look at BC.

Payroll taxes (CPP, EI) should be rolled into general taxes.

This would certainly simplify things and in principle I think that it is a good idea. My fear would be that some brainiack in Ottawa would forget this and then spend this money else where. I would prefer to see people who never use the dole get this money returned to them when they retire.

The GST and PST should be harmonized, extended to all goods and services and be embedded in the selling price.

I like the embedding the taxes into the selling price. It can be a real brain pain that if you are picking up supplies, have an exact amount of bucks in your pocket and have to try figure the GST on the fly so you dont over spend. Being from Alberta, I don't have to worry about the PST.

[Hugo]

It makes no difference to you whether the government takes money from your bank account (taxes you) for its purchases or it uses your credit cards (borrows in your name) for its purchases.

Well, there's many ways for government to get money. It can rely on voluntary contributions (yeah, right), it can tax, it can borrow in the form of bonds (which is future taxation), or it can spend inflated currency (which is a future taxation of uncertain rate of interest and maturity date).

Taxation is almost certainly the easiest to foresee the consequences of, but is politically unpopular because the current ruling party can't hide what they are doing. Only they will get blamed for tax hikes.

Borrowing and inflation are politically more expedient because chances are some future party or at least a future government will get blamed when the bill comes. This is rather like the NDP government in Ontario: they spent all the money, the Conservatives were left with the bill, and the Conservatives got blamed for a lot of the consequences. Now the cycle is repeating itself for the Liberals, as Dalton McGuinty is finding out that the financial situation is bleaker than it appeared before election day, and yet he is blamed for the tax hikes and service cuts that are essentially coming as a result of Conservative (and, ultimately, NDP) policy.

Borrowing from bonds can also be economically expedient since in the future, when they come due, we will be richer. Since the industrial revolution each generation has been richer than the last and so long as government interventionism does not completely destroy economic growth this trend will continue. Therefore, borrowing from greater future riches makes more sense than taxing from lesser present riches.

The more pertinent point is to simplify the tax system, or at least make its effects less pernicious. The fewer people the Revenue Agency must deal with, the better. People earning below, say, $15000 should not have to file.

A good idea. Furthermore, the tax system should be simplified since right now, it is so convoluted that Revenue Canada could probably find a way to level tax-evasion charges at most Canadian citizens, although most probably had no intention of committing a crime. Remember that they could only imprison Al Capone on tax-evasion charges. It's not really a good idea to have a legal/taxation system that makes criminals out of a sizeable portion of the populace.

Corporate taxes should be abolished.

Yup. Corporate taxes are double taxation: tax the corporate earnings, and then tax the incomes of employees which are paid out of those earnings.

The problem with double and triple taxation is that it makes it easier to hide massive taxes. If all the taxes paid in Canada were rolled into income tax alone, people would be up in arms. As it is, most of it is hidden.

In 50 years, our tax system will resemble what I just described. The sooner we get there, the better.

We'll see. That which is economically wise is often politically suicidal.

Why should we pay tolls when we pay fuel taxes that are supposed to pay for all our roads?

Because fuel taxes do not tax according to road useage but fuel useage. The two do not coincide since vehicles consume fuel at different rates per mile.

This would certainly simplify things and in principle I think that it is a good idea. My fear would be that some brainiack in Ottawa would forget this and then spend this money else where.

This idea that CPP and EI must be kept separate stems from a big lie: that CPP and EI are saving schemes. They are not, they are wealth redistribution schemes. Once that is established it doesn't really matter how the wealth is taken. If CPP/EI were a savings scheme, your contributions would go into a personal account which you would later draw out of. The way it actually works is that CPP/EI is pooled and doled out to those who ask for it not later, but now, which makes it a simple wealth-redistribution scheme.

I like the embedding the taxes into the selling price. It can be a real brain pain that if you are picking up supplies, have an exact amount of bucks in your pocket and have to try figure the GST on the fly so you dont over spend.

Brian Mulroney was quite wise when he required that sales taxes be added to prices. His reasoning was that a tax hike is much harder to hide when the tax is figured separately. With gas, the taxes are figured into the pump price for you, and most people as a result do not realise how extortionate the gas taxes are.

Having said that, it's my opinion that sales taxes need to be abolished. Quite apart from their economy-slowing effects, they are regressive and hurt the poor far more than the rich.

[caesar]

Why should we pay tolls when we pay fuel taxes that are supposed to pay for all our roads? If the feds actually spent 50% plus of the collected fuel taxes on roads like other countries, then we would better roads. I think the current figure is around 16%. Temporary tolls are a good idea but these tend to turn into a permanent tax. Just look at BC.

I think this is basically provincial jurisdiction but I do not like the use of long term tolls to pay for highways. People in certain areas get hit paying tolls and paying the other taxes (fuel +) that are supposed to pay for road works. A temporary toll (10 years or less) on bridges or highways that reduce travelling time significantly may be acceptable. This is especially important in more remote areas. The citizens there are helping to pay for transit systems that only are used it the cities; especially this super expensive RAV line we are building in BC

[August1991]

Hugo, I'm surprised about your willingness to consider a state and taxes!

Brian Mulroney was quite wise when he required that sales taxes be added to prices. His reasoning was that a tax hike is much harder to hide when the tax is figured separately.

GST visibility? IMV, Wilson/Dodge/Mulroney were in error. They should have hidden it. Better for them, and no difference for the populace.

I think the economic cost of a visible tax is greater than the political benefit of a hidden tax. In Europe, hidden VAT is about 15% like in Canada. Governments get what they can. (And visibility has nothing to do with it.)

Borrowing and inflation are politically more expedient because chances are some future party or at least a future government will get blamed when the bill comes.

Inflation has now been handed off to an independent agency. (We'll see.)

Borrowing? Bush Jnr. has chosen an interesting path. Cut taxes, raise the deficit, and see what a future administration does. Taxes/debt are the same thing, irrelevant.

Government purchases matter. What does the government take from us. Forget how the government takes it.

Why should we pay tolls when we pay fuel taxes that are supposed to pay for all our roads? If the feds actually spent 50% plus of the collected fuel taxes on roads like other countries, then we would better roads.

Road tolls have nothing to do with paving roads.

Playfull, some patience as I explain my idea.

Across North America, drivers at 5 pm hold a steering wheel and stare into space. They are stuck in traffic jams. To Greens, they they are adding greenhouse gases to the atmosphere. To NDP types, the rich are suffering their choice of lifestyle. To economists, the drivers are wasting their time.

If you rent a hotel room for one night in downtown Montreal, you'll pay about $200. You'll get a space the size of about two cars.

If you drive your car in downtown Montreal, I think you should also pay for renting the space. (I don't care if the space is moving along the 40 or the 30 or Ste-Catherine. Your car is taking the space, like a hotel room.)

If Canadian cities charged for the use of road space the way Paris Hilton charges for the use of hotel beds, municipal property taxes could possibly be abolished.

[caesar]

Why should we pay tolls when we pay fuel taxes that are supposed to pay for all our roads? If the feds actually spent 50% plus of the collected fuel taxes on roads like other countries, then we would better roads.

Road building and maintainance is a A Provincial jurisdiction.

Car drivers pay too much now. Their gas taxes go to pay for transit systems that are not available or usable for everyone equally. We all have to subsidize the transit systems that do not accomodate all areas.

[playfullfellow]

If you drive your car in downtown Montreal, I think you should also pay for renting the space. (I don't care if the space is moving along the 40 or the 30 or Ste-Catherine. Your car is taking the space, like a hotel room.)

I know where you are coming from august, in theory it makes sense. In reality, it is not doable as you suggest. I have no problem with short term tolls on roads that greatly improve efficiency. But under your idea, we can just as easily say that pedestrians should pay to wolk on the side walks, slide a quater into a meter everytime they want to use a cross walk. I know this is very simplyfied but that is what you suggest when you say user pay.

My understanding of the fuel tax system is that it is supposed to be redistributed from the feds to the provincial governments, municipalities and cities to go into road construction and maintenance. So, you need fuel to drive on these roads so you pay your toll when you fill up. If these governement groups spent more than 16% of all fuel taxes collected, then we would see a vast improvement of our road ways. But it seems to me that the feds are handing over a pile of money to municipalities to spend on infrastructure but no real guideline as to what that may be. I know our current bunch of trained monkeys on city council would first spend 100 thou plus on a study, then another 50 thou on public meetings, 100 thou to the lawyers to make sure they get it right. Then we get seceral weeks of ads on the radio, tv and newspaper about what a good job they are doing. Oh yeah, now they need a raise to for this good work too. Ooooopppppsssss, now the money is running low, give the contract to the lowest bidder, watch the project go over budget, raise taxes to pay the bill and sit around and waith for the next handout so the whole process can be done over again.

If I am to pay tolls on the roads, then why should I pay fuel taxes and the same for vice versa? I do agree with paying for what you use, I know I get nothing for free is this lifetime. I don't like this double taxing crap, which of course I know a lot of stuff is double taxed. Government needs to get more bloody efficient and we would be able to see our tax dollars actually working for once.

[playfullfellow]

Road building and maintainance is a A Provincial jurisdiction.

Correct me if I am wrong (it may be different for BC, I dont know) but isn't the breakdown for responsibility of road maintenance as follows?

trans canada and hwy 16 are federal as they are the two coast to coast highways and built by the feds. I think this also includes roads inside of the federal park system.

all county, rural roads and small town main streets are provincial

all large town and city streets are municipal responsibilities

I know the provincial government helps towns and cities with major new road construction and transit systems with grants and subsidies but general street construction and maintenance is up to the cities.

[fellowtraveller]

Yup. Corporate taxes are double taxation: tax the corporate earnings, and then tax the incomes of employees which are paid out of those earnings.

No, they aren't. Wages and salaries are an expense item that is not incuded in taxable incomes. Corps are taxed on net income, not gross revenue, just like ordinary taxpayers.

[Hugo]

No, they aren't. Wages and salaries are an expense item that is not incuded in taxable incomes. Corps are taxed on net income, not gross revenue, just like ordinary taxpayers.

That's just word games. Corporate taxes are levied against corporate incomes and necessarily reduce the amount of money available for everything else, including salaries, and then those salaries are taxed again, and then again in sales taxes. So the same given quantity of money has actually been triple taxed by the time an employee actually gets the goods and services he wants.

Hugo, I'm surprised about your willingness to consider a state and taxes!

Let it not be said that I made the perfect an enemy of the good. Look at it this way. If the governments of the world became laissez-faire and abolished migration controls, the only difference between that and a state of "true" anarcho-capitalism would be the inability to choose different law without changing geographical location. This would basically cause an increase in opportunity cost and time-lag for changing law provider compared to a nongeocentric legal system.

GST visibility? IMV, Wilson/Dodge/Mulroney were in error. They should have hidden it. Better for them, and no difference for the populace.

Well, once again this is a difference between political and economic expediency. There are so many good examples of why economics and politics don't mix and this is just another.

I think the economic cost of a visible tax is greater than the political benefit of a hidden tax. In Europe, hidden VAT is about 15% like in Canada. Governments get what they can. (And visibility has nothing to do with it.)

Actually, sales taxes in the UK are at 17.5%, the Czech Republic 19%, while Denmark, Norway, Sweden and Hungary all levy at 25%. In fact, EU Directive 2001/4/EC states that the absolute minimum tax rate levied by a member state will be 15%.