Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Canadian Political Free-for-All -- Ignore unavailable to you. Want to Upgrade?

To: Lino... who wrote (1247)	10/8/2002 11:32:37 AM
From: DeplorableIrredeemableRedneck	Read Replies (1) \| Respond to of 37540

Re: Bend over Why do we as Canadians alway bitch, whine and complain about the style of our government and do nothing about it? We really are a pack of apathetic idiots. I bet that this latest tax-grab is going to dissapear into general revenues. Within the next ten years, 24% of the Canadian population is going to be retied. 80% of that is going to be in poverty. Who can save even a dime for retirement if we are nickled and dimed to death during our working lives. Our health care as we know it will not even exist in a decade. We will have a US style within the next ten years whether we can afford it or not.

To: Lino... who wrote (1247)	10/23/2002 8:57:21 AM
From: DeplorableIrredeemableRedneck	Read Replies (1) \| Respond to of 37540

Dedicated taxes are just more taxes Jack M. Mintz National Post Wednesday, October 23, 2002 ADVERTISEMENT Dedicated taxes are now the talk of Ottawa. Simply dedicate the revenues to important services like health care or urban transit and, presto!, governments can pick more money out of taxpayer wallets rather than cutting out wasteful expenditures programs to fund priorities. Despite these questionable motives for dedicated taxes, Canadians should nevertheless debate whether to impose such taxes in the first place. They can make sense, even if they often don't. Some experts espouse dedicated taxes for several reasons. First, voters often want to know how their hard-earned tax dollars are to be spent. When programs and taxes are subject to a vote, as in California or Switzerland at times, dedicated taxes enable people to express how much money they would like to spend on public services. Second, some levies are user fees paid by individuals to fund specific public services. Such fees should be used to cover the cost of services and therefore be dedicated for this purpose. Public universities, for example, get to keep tuition fees, which are a form of dedicated levy. Dedicated levies make sense when governments impose fees related to the benefits of specific programs. For example, the CPP/QPP premiums -- a payroll tax on worker earnings -- fund pension benefits for retirement years. Such pre-funding provides society with the resources to pay for transfers made to the elderly, who will need support from a proportionately dwindling working population. Pre-funding health-care expenses can also make sense, since the majority of expenses are incurred in the last years of one's life. Our current unfunded health-care liabilities are at least equal to the federal government's national debt. Canadians should be putting aside money now to pay for these services at a later time. While such arguments are sound for some dedicated levies, more often dedicated taxes can bind governments in a straitjacket. A significant problem is that expenditures would be tied to the revenues received. If too little revenue comes in, expenditures would have to be cut. If too much were received, expenditures would unnecessarily expand on benefits to use up the money. Thus, for example, dedicating a gas tax to urban transit might be a useful solution for a while, but we later might find that too much money was being raised. Projects might then be inefficiently designed. As another example, the almost fictitious Employment Insurance account is operating at a significant surplus of some $6-billion. Some Canadians are pressuring governments to increase EI benefits, such as for regional, training and maternity benefits, while business groups would like contributions set lower to reflect the true costs of the program. Once the surplus is available, pressure builds to spend funds on new benefits, whether desirable or not. Yet, the current EI program is inefficient and should be based more on insurance principles to ensure that workers are appropriately supported without imposing undue costs on taxpayers. Instead, to avoid tying the hands of ministers of finance too much, it far better to let governments use tax revenues to fund all programs, with expenditures decided on a priority basis. Priorities are best determined by economic and social objectives rather than by the specific amounts of revenues received for funding. Further, once governments go down the road with dedicated taxes, they face a slippery slope. All sorts of pressure groups want to preserve funding on their favourite programs by dedicating taxes. At present, lots of ideas have been expressed for dedicated taxes, including a gas tax for urban infrastructure, cigarette taxes to fund anti-smoking campaigns, a GST increase for current health-care expenses and environmental levies to fund Kyoto and other environmental programs. The list goes on and on. Generally, it makes little sense to levy dedicated taxes unless they relate to the costs of running public programs, as in the case of user fees. Most of the proposals for dedicated taxes are really being made for another reason -- to raise taxes. Governments have never been bigger than they are today, with revenues proportionately the highest they have been in Canadian history -- 43% of GDP. It is getting harder for ministers of finance to pluck the feathers of geese without a lot of pain. So perhaps by dedicating taxes to specific expenditures, rather than looking for program efficiencies elsewhere, our leaders hope that the public will be sympathetic to new taxes. But Canadians should reject many of the proposals as just an easy way for governments to spend more money. Otherwise, Canadians will never get relief from the ramping up of taxes over the past 20 years, when governments mismanaged their financial affairs so badly. Jack M. Mintz is the president and CEO of the C. D. Howe Institute and professor of taxation, J. L. Rotman School of Management, University of Toronto. © Copyright 2002 National Post