Reduce spending to kill the deficit
hurley_108 @ Thu Apr 23, 2009 5:25 am
Proculation Proculation:
hurley_108 hurley_108:
Proculation Proculation:
Actually, the countries who converted to flat tax made more tax revenue. So that would be a better thing if people still want all those government spendings.
What was the flat tax rate compared to the pre-conversion brackets? Was the increased tax revenue for income taxes alone, or was it for all tax revenue? Did it come with other tax changes?
I'd be very interested to see an example of a move to a flat tax that didn't hike taxes on anyone that wound up making more money for the government.
Well, I don't know for all countries but most of the europeans having a flat tax, it is an income tax of like 20% or nothing. Things are really simplified and most of the higher tax revenue came from economic growth and a stop of tax evasion.
For Canada I would do something like a 20% after 20 000$. Something similar. And also no corporate tax, only on the incomes.
Wow, that's interesting. I hadn't properly worked it through before. I had assumed that by applying a flat rate that was anything higher than the lowest progressive rate, then someone at the low end would necessarily pay more tax. I ran the numbers, and that isn't the case. I didn't see in my head properly how the lines move.
In fact, you could set the flat tax rate at the highest marginal rate we've got, 29%, and with a personal exemption of $43467.31 not have anyone pay a penny more than they presently are.
That's all I've got for now, it took me a while to make a spreadsheet to do the maths. But I have learned something huge. Thank you.
Lemmy @ Thu Apr 23, 2009 5:45 am
Thanos Thanos:
Your post is intriguing but I'll stick by what I said. Going by the sheer wastage of funds that occurs I'd still say that we're over-taxed. If the government hadn't given itself such a large margin for error through overtaxation to cover what money is wasted on duplication of programs already being provided by the provinces and municipalities, errors in materials and supply purchasing, the tendency to turn a blind eye to the ever-growing size of a bloated civil service, and the inevitablilty of pork-barrelling, then I'd say that our taxes should be justifiably a hell of a lot less than what we're paying now.
Oh, don't get me wrong. I TOTALLY agree with you; Canadians are WAY over-taxed. But within Canada, there are certain groups that aren't paying their fair share. You're absolutely correct that there's too much waste and over-funding. But given what the government is collecting, far too much of it is collected on the backs of poor and middle-income Canadians. The wealthy and the corporations are under-taxed, in terms of incidence and burden.
Thanos Thanos:
I'd say that the biggest concern (and it's one that will never be met) is that the government and bureacracy has a moral responsibility to use the tax dollars in the most efficient manner possible rather than distribution of resources based on cronyism or their political whims. For every hundred decent MP's or civil servants all you need is one of two c*******ers like Alphonso Gagliano or Jean Chretien to confirm that the system is endlessly corruptable and that money inevitably flows, first and foremost, to the sons-of-bitches in the old-boys networks. This is public money and it should be ensured that it doesn't become part of some criminal enterprise, even if a criminal holds the highest office in the country, as was clearly the case from 1993 to 2004.
Again, no argument whatsoever. And I've made this point before. If we could trim the scope of government and eliminate the waste and corruption (even eliminating a small FRACTION of the waste and corruption) and there'd be ample government revenues to fund the sorts of programs Canadians want AND cut their tax bills.
Thanos @ Thu Apr 23, 2009 2:12 pm
Kerozine Kerozine:
Thanos Thanos:
Your post is intriguing but I'll stick by what I said. Going by the sheer wastage of funds that occurs I'd still say that we're over-taxed. If the government hadn't given itself such a large margin for error through overtaxation to cover what money is wasted on duplication of programs already being provided by the provinces and municipalities, errors in materials and supply purchasing, the tendency to turn a blind eye to the ever-growing size of a bloated civil service, and the inevitablilty of pork-barrelling, then I'd say that our taxes should be justifiably a hell of a lot less than what we're paying now.
You have any facts and figures to back this up?
$1:
I'd say that the biggest concern (and it's one that will never be met) is that the government and bureacracy has a moral responsibility to use the tax dollars in the most efficient manner possible rather than distribution of resources based on cronyism or their political whims. For every hundred decent MP's or civil servants all you need is one of two c*******ers like Alphonso Gagliano or Jean Chretien to confirm that the system is endlessly corruptable and that money inevitably flows, first and foremost, to the sons-of-bitches in the old-boys networks. This is public money and it should be ensured that it doesn't become part of some criminal enterprise, even if a criminal holds the highest office in the country, as was clearly the case from 1993 to 2004.
Oh, quit being such a drama queen.
Look up any Auditor Generals' report issued over the last twenty years if you want evidence, dopey.
Winnipegger @ Tue Apr 28, 2009 5:43 pm
Part of my assertion is that the GST is our flat tax. Many economists have argued against income taxes and capital taxes, stating they inhibit the economy. However consumption taxes do not. Ok, so taxes belong on sales, not income. The GST is a flat tax rate, regardless of income. That's our flat tax. So let's get rid of personal income tax, and leave the GST.
This principle was corrupted when someone introduced the GST rebate, now called the GST credit. That is income sensitive, so low income earners get a GST credit cheque every 3 months, but the amount of the cheque is dependant upon income level, whether you have a spouse, and how many children you have. Middle and high income earners get nothing. To make the GST truly flat, the GST rebate (credit) must be cancelled.
Bruce_the_vii @ Tue Apr 28, 2009 6:28 pm
I don't see the point of a principle of a flat tax. And what is the point of getting rid of income taxes? Is there a free lunch in there somewhere.
Winnipegger @ Tue Apr 28, 2009 9:11 pm
Why do you want to pay high taxes? Why do you want to pay a large portion of your income to someone else just so he/she can spending on their favourite pork barrel project? Income tax was introduced during World War 1 as a temporary war tax, to pay for the war. Both personal and corporate income tax were introduced as the "Temporary War Income Tax". Today we have universal health care, transfers to provinces, and other expenses that did not occur before World War 1. With all those extra expenses, we can't afford to get rid of both corporate and personal income tax. We had federal sales tax before confederation, sales taxes on different things that were taxed differently, with no consistency and hidden in the sticker price of goods. Those sales taxes were replaced with the GST. You could argue replacing the FST with the GST was a bad thing (actually I think it was a bad idea), but we did have federal sales tax since before confederation. However, if we pay off the debt we can get rid of one of those three taxes. Personal income tax, corporate income tax, and GST together account for 90% of federal revenue. It used to be even larger, after all the tax cuts since Paul Martin was finance minister it has now been reduced to 90%. If we pay off the debt we can afford to get rid of one of those three taxes. Only one, we can't afford to get rid of two, and certainly can't get rid of all three, the federal government has to get its money from somewhere; but we can eliminate one. If we don't pay off the debt we can't afford to get rid of any.
So here's the big question: do you want to continue to pay income tax? Knowing you don't have to, do you want to continue paying it?
::Edit:: Spelling correction.
Proculation @ Tue Apr 28, 2009 9:33 pm
People will only buy in other countries.
Brenda @ Tue Apr 28, 2009 9:53 pm
imho, Canada is not overtaxing.
I am used to an income tax rate starting at 22%, next bracket 32%, then 42% (for over 86,000 Euro's) and 52% for everything over 104,000 Euro's (or something)
Then, you pay taxes over your savings, and over your company car, road tax... Property tax... Tax to watch tv... Taxes on a new car... Oh, and 20% sales tax...
Canada is tax-heaven for me 
Bruce_the_vii @ Tue Apr 28, 2009 11:12 pm
So, if you paid off the debt you could reduce taxes. That's a good idea. I've actually never thought abut being able to pay off the debt. To tell the truth I've overlooked how reducing the debt as a percent of GDP must be leading to surpluses we've had.