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How much does a 'Civil' Society cost?

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    How much does a 'Civil' Society cost?

    HOW MUCH DOES A CIVIL SOCIETY COST?

    Oliver Wendell Holmes Jr. was a U.S. Supreme Court Justice who once said that taxes are the price we pay to live in a civil society.

    The year Holmes was appointed to the Supreme Court (1902), Tax Freedom Day in the United States arrived on January 21st. Canada’s tax burden was similarly low. At the time, there wasn’t any income tax in the United States, or in Canada, nor would there be for many years. When a permanent income tax was introduced, it happened in the United States some years prior to Canada's Parliament moving in that direction, and when Canadian income tax was finally established, it was supposed to have been a temporary war tax. It was even called the "Temporary War Income Tax."

    Oliver Wendell Holmes Jr. was a Supreme Court Justice who said taxes are the price we pay to live in a civil society. For Holmes, Tax Freedom Day arrived on January 21st.

    Tax Freedom Day is the day of the year when people stop working for the government, and start working for themselves. Prior to Tax Freedom Day, all the money someone earns goes to various levels of government in the form of taxes. The year Holmes was appointed to the Supreme Court, the total and complete amount of money an individual needed in order to pay every kind of tax there was, to every level of government, added up to less than 6% of his or her total annual earnings.

    This is the background in terms of taxes and a civil society Holmes would have been thinking about when he made his famous statement about taxes being the price we pay to live in a civil society. Holmes worked three weeks out of 52 weeks to pay for government.

    In stark contrast, Canadian Tax Freedom Day now arrives well into June. Yet there are elected officials at the provincial, federal, and municipal levels of government who sincerely believe that to make society increasingly civil, the government should be taxing more and spending more.

    Ed Stelmach became Alberta's Premier in 2006, part way through the 2006-07 fiscal year. The year before, the cost of a civil society in Alberta was $27.2 billion. That’s how much money the provincial government spent in total. By the time Mr. Stelmach resigned in 2011, the cost of a civil society in Alberta was bumping against $40 billion – the price had increased by between 40 and 50%.

    Then Alison Redford took over. Redford's initial budget as Premier called for such proliferate spending that the National Post called it Alberta’s first NDP Budget. Her stated spending target for 2013-14 exceeds $43 billion, plus the cost of her election promises. It is estimated that her promises will cost between $4 and $7 billion.

    If you add it all up it means after five years of Mr. Stelmach, and just two years of Alison Redford, the price of a civil society in Alberta has grown by 60%. If you toss in the Redford election promises, the price of a civil society in Alberta will have increased by almost 85%.

    - FreedomTalk.ca

    #2
    How Taxpayer Cash Rewards Bad Fiscal Policy

    Imagine you are from a family of ten. You and your nine siblings grow up and leave home. Then the three or four who are most industrious have to send money home each month so Mom can give it to the three or four least industrious. Mom calls it "equalization."

    Those who get up early and work the longest never enjoy the fruit of their own labour. Rather than having cash available to build a new house, start a small business, or otherwise invest, they find their money drained off by the “equalization.” The less disciplined of the ten can sleep longer in the mornings, work less, and still get by quite well. It’s easier to get by when someone else buys the groceries, pays the utilities, and covers part of the rent. Continue...

    This is a pretty fair analogy of Ottawa’s equalization policy, which requires taxpayers in the more industrious and financially aggressive provinces to pay billions in taxes to Ottawa every year so the money can be transferred to the governments of the so-called “have-not” provinces. Over the years, some provinces have collected a quarter or a third of their annual budgetary revenues from equalization.

    For decades, Saskatchewan and Manitoba emphasized Crown corporations over the private sector, thereby encouraging private businesses, people, and investment to leave. In Saskatchewan, for a number of years, it was illegal under certain circumstances for non-residents to even invest in the province. Yet both provincial governments consistently collected fat equalization payments from Ottawa, insisting they had a right to the money.

    Due to recent reforms, Saskatchewan is economically thriving and no longer drinking at the equalization stream, but Manitoba, PEI, New Brunswick, and Nova Scotia each have their lips firmly locked on the money spout.

    Then there’s Quebec. Over the past fifty years (in 2011 inflation adjusted dollars), Quebec has collected a quarter of a trillion dollars from the rest of Canada through equalization. It has never at any time been a net contributor. Ironically, the Institut Économique de Montréal (IEDM) reports that a quarter of a trillion dollars is also the same amount of money Quebec has racked up in debt—$253 billion, to be exact. The highly respected research group also reports that if Quebec were an independent country, its existing debt-to-GDP ratio would make it one of the five most indebted nations on the planet. Others in that group would include Greece, Italy, Iceland, and Japan.

    As a formal policy, equalization is a bust. If it were scaled back or eliminated, every province on the receiving end of these payments would be forced to shift their focus from milking Ottawa to implementing their own wealth creating agendas. As equalization now stands, it’s nothing more than a reward system for failing fiscal policy.

    At FreedomTalk.ca, we bring this issue up today not to criticize any province or region of the country, but to point out what equalization is and how it works.

    In 2013-2014, the terms of equalization will be renegotiated. It means elected officials and taxpayers in Alberta will be forced to make some important decisions on how the policy will work in the days ahead.

    __________________________________________________


    For more information about equalization, see:

    Ontario and Public Sector Padding in Manitoba

    The provincial government of Manitoba receives close to 40% of its revenue from federal transfer programs. Despite the intent of equalizing the ability of provinces to care for Canadian citizens, the program has had the unintended result of leaving recipient (have-not) provinces with many more public sector staff than those provinces that support them. “Have-not” Manitoba, for example, has more public sector staff per capita in every sector except local government compared to “have” Ontario “. For Manitoba to have the same ratios as Ontario, it would have to let go 40,927 public sector staff. Read the entire article. (Frontier Centre for Public Policy)

    Robbing Peter to Pay...Peter? Equalization Inequalities

    The [equalization] program introduces a deliberate distortion into the national fiscal equation— residents of recipient provinces receive a larger basket of public goods for their tax contributions than do those in other provinces. It also deliberately serves to induce individuals to remain in the least-favoured location. Read the entire article. (Atlantic Institute for Market Studies)

    How to encourage Quebec to end 55 years of relying on equalization

    Tuesday, May 29, 2012 – Quebec has been receiving equalization payments since the program was set up back in 1957. This year, $15 billion will be transferred to Canada’s poorer provinces. In an Economic Note published today, Youri Chassin, economist at the Montreal Economic Institute (MEI), explains how receiving provinces could be further encouraged to enrich themselves and to stop relying on these transfers. The author is particularly interested in how natural resources are treated in the calculation of equalization payments. Read the entire article. (Montreal Economic Institute)

    Comment


      #3
      Tom: Atlantic Institute for Market Studies is nothing but a PRESSURE GROUP governed by the top executives from business and commerce of eastern Canada with a few appointments from central and western Canada.

      They are a Registered Charity for sure but derive their funding from contributions from business and us poor working slobs in order to spread their PROPAGANDA (my interpretation).

      On par with the FRASER INSTITUTE they try to influence government action and policy. They are good at what they do but don't forget, these are businessmen and most of what they propose benefits THEM the most.

      Comment


        #4
        Why does the canadian taxpayers association have to create anouther entity to spew their garbage. Is it because they know no one listenes to them?

        Comment


          #5
          maybe we're about to find out what an uncivil society costs.

          Comment


            #6
            A whole lot of people are about to get a crash course
            in economics.

            Specifically a sovereign bond default across the
            western world.

            I'm struggling to understand why most people can't
            accept the reality of the situation and its very direct
            implications on their lives.

            Comment


              #7
              "socialism,ideas so go they have to be mandatory"

              Comment


                #8
                cotton, what will happen when a soverign default happens?

                Comment


                  #9
                  HedgeHog,

                  Negotiate a 'World Currency' .

                  Comment


                    #10
                    Anybody holding those bonds or that currency is
                    wiped out-hyperinflation is a form of default.

                    Its happened lots of times but nobody seems to care
                    in the western world.

                    The big difference this time is the global integrated
                    financial system.

                    Even canadas banks are exposed to europe.

                    Comment

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