Quotulatiousness

October 16, 2011

“We have reached a point where the average earnings of a two income family can barely support the spending of government”

Filed under: Cancon, Economics, Government — Tags: , , , — Nicholas @ 11:38

Canadians have an addiction problem. They’re addicted to government:

Consider the following:

  • The Government of Saskatchewan alone spent over $11 billion last year (April 2010 to March 2011) to provide services for its citizens. That works out to nearly $11,000 for every man, woman, and child in the province, or $44,000 for a family of four.
  • The average wage for a person in Saskatchewan is about $44,000/year.
  • If the provincial government relied solely on the income tax of its citizens, then a family of four would have no choice but to have both parents work . . . one to provide for the family and one to provide for the government.

Now consider what other levels of government spend.

  • At the municipal level, the City of Regina has an operating budget of about $2500/person. Federally, the Government of Canada spends about $8,000/person.
  • All together our three levels of Government spend over $21,000/person . . . or $84,000 for a family of four.

We have reached a point where the average earnings of a two income family can barely support the spending of government . . . let alone pay for food, clothing, and shelter for themselves and their children.

The reality is that “free” public services come with a cost . . . and these costs increase as we demand more “free” stuff.

One of the truths about addictions is that they require larger and larger “hits” . . . that provide ever smaller and smaller “highs”. This results in people either becoming so dependent on the substance that they cannot function without it . . . or they pursue the addiction to its ultimate conclusion, an overdose.

H/T to Katewerk for the link.

Will Andrew Luck be the next Peyton Manning or the next Ryan Leaf?

Filed under: Football — Tags: — Nicholas @ 11:08

Judy Battista looks at the plight of the fans of losing NFL teams who are torn between cheering their teams for a win, or hoping to lose badly enough to get the first pick in the 2012 draft:

Last weekend was a good one for Chris Joseph. The Miami Dolphins, the team he has rooted for since he was a child and about whom he runs a blog called Fins Nation, had a bye. Joseph was freed. Not from despair that the Dolphins might lose. But from the fear that they might win and ruin everything.

The Dolphins (0-4), who play the Jets on Monday night and are one of three winless teams, are in a race for the bottom of the N.F.L. standings. But with ignominy this autumn comes glory next spring. There, for the team with the worst record and the first overall draft pick, awaits Andrew Luck, considered the best quarterback prospect since Peyton Manning.

While Luck, coveted for his accuracy and intelligence, enjoys his final season at Stanford, he has inadvertently turned beleaguered followers of struggling N.F.L.’s teams on their heads. From Seattle to Miami, rather than root for a win, fans root for him. Their feelings are summed up in a coarse three-word rhyme that has given shape to Twitter feeds, Facebook pages and dozens of Web sites. It implores downtrodden teams, in essence, to play really, really poorly for Luck.

Remember that college stars do not automatically become NFL stars: there was much debate over whether the best quarterback prospect in the 1998 draft was Peyton Manning or Ryan Leaf. We know now, but opinions were quite divided then.

Rick Mercer on the (secret) border security negotiations

Filed under: Cancon, Government, USA — Tags: , , — Nicholas @ 10:42

The argument for value-added taxes

Filed under: Cancon, Economics, Government — Tags: , , , — Nicholas @ 10:37

In an article about the Canadian copy-cat protests, Mike Moffatt addresses some of the demands to increase taxes on the wealthy and explains why value-added taxes (like the much-hated Harmonized Sales Tax) are more efficient:

The Occupy Canada protests which began Saturday took place in over a dozen cities with mostly modest turnouts. They also lacked a cohesive goal or message, as their critics in the media are fond of pointing out. The protests did, however, address a number of important societal issues, such as the growing gap between the rich and the poor. As has been acknowledged by both Bank of Canada governor Mark Carney and Finance Minister Jim Flaherty, rising income inequality in Canada is a real and legitimate concern.

Over the last 30 years, the income gap between the top 1 per cent (or more accurately, the top 0.1 per cent) and the rest of us has increased substantially. Furthermore, this inequality is growing faster in Canada than it is in most other countries, including the United States. The Conference Board of Canada has reported that Canada has fallen to 12th out of 17 countries in its peer group when it comes to income inequal-ity. Between 1980 and 2005, before tax earnings increased by 16 per cent for the top 20 per cent, but fell by over 20 per cent for the bottom 20 per cent. The Occupy Canada protests are the product of a rising tide only lifting a few boats.

[. . .]

So how do we reduce inequality? The obvious place to start would be to borrow solutions from countries where after-tax income inequality is relatively low. Three countries that consistently score well on income inequality measures are Denmark, Finland and Sweden. These three Nordic countries share very similar tax structures, featuring moderate-to-low marginal corporate tax rates, moderate-to-high income tax rates and very high value added sales tax rates (VATs, similar to Ontario’s HST). The average VAT in these three countries is 25 per cent, a rate nearly twice that of the average Canadian federal GST plus provincial sales tax or HST. A onepercentage-point increase in the HST alone would raise $5 billion to $6 billion per year for the federal government, so increases by a few percentage points could adequately fund programs designed to reduce inequality. No country on Earth has been able to find a way to fund the kind of social programs and redistribution needed for “reasonable” levels of inequality without VAT rates significantly higher than Ontario’s HST.

Why are high sales taxes needed to fund social programs rather than higher corporate taxes or higher income taxes? Put simply, VATs are the hardest taxes to avoid paying. Higher income taxes reduce labour effort by the taxed. Higher corporate tax rates reduce investment. Canada’s corporate income tax rate was, not so long ago, twice what it is today. Adjusted for the inflation and the size of the economy, however, the higher corporate tax rates brought in similar levels of revenue then as they do now. There are some ways to avoid the HST, of course, but these are far more limited than they are for other taxes. The HST, as with all VATs, is a cash cow that provides governments with the necessary resources to tackle important societal issues.

Lessons from childhood

Filed under: Randomness — Tags: , — Nicholas @ 00:05

Brad Kozak reminisces about the lessons he learned from childhood games:

My parents were, shall we say, “old school.” All that “don’t spank your kids” philosophy held no water in the Kozak household. And I can report, firsthand, that Jean Shepherd was wrong — Lifebuoy soap may taste awful, but a mouthful of Lava bar soap is worse. Far worse. In my youth, I briefly became something of an unwilling connoisseur of bar soaps. I can tell you that, while Lava has a distinctive texture on the tongue, it’s piquant aftertaste after-burn will win no awards at the next Concours Mondial de Bruxelles.

My parents believed that what was good enough for them as kids, wouldn’t kill me. That attitude was a wondrous gift, for it allowed me to play with other kids in the neighborhood, get knocked down, knocked around, and to learn to stand up for myself. But I learned most of my lessons with a toy gun in my hand. But what could a kid learn like that, other than hostility, aggression, and inappropriate group behaviors? Allow me to enlighten you, grasshoppa, with a dozen or so things I learned behind a toy six-shooter:

[. . .]

  • It’s a Poor Workman Who Blames His Tools. There was an arms race that took place in my neighborhood when I was a kid. You probably never heard about it, because we received no national news coverage, no State Department visits, and no UN resolutions, condemning hostilities. The arms race I speak of commenced with the release of the very first SuperSoakers, and was exacerbated by the arms merchant that perpetually released bigger and better weapons with more capacity and increased ranges. Come to think of it, we also learned lessons about “the point of diminishing returns” (that backpack reservoir was a piece of crap, I tell you!), and build quality (or the lack thereof). They were expensive lessons, but eventually, natural selection took over and we all settled on similarly tricked-out weapons, leaving us to win, lose, or draw over our own skills. Oh, and “cold” part of the war? Nothing is quite as cold on a hot July day as getting a face full of ice water and a soaked t-shirt. Nothing.
  • Play Smart. Most of what I know as negotiating skills, I learned on the playground. Those rules I mentioned earlier? They made perfect sense, because we made them up, as needed, in order to effect a “level playing field” for the majority, and to try and find a way to turn the game to our own advantage. In this way, we learned the ways of Wall Street, Congress, and politics in general.
  • Play Honorably. When you’re a kid, cheating one another is a near-unpardonable sin. Cheaters never win isn’t exactly true. They can win the game, but never the war. “Bang, bang, you’re dead, I win” was a sure-fire way of never getting asked back.

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