Quotulatiousness

February 24, 2024

Times might be tough right now, America, but at least you’re not Canada

Filed under: Bureaucracy, Cancon, Economics, Government, USA — Tags: , — Nicholas @ 03:00

You may be feeling the pinch from Bidenflation, election year stresses, and political lawfare, but at least you’re not up in America’s hat:

It’s late February, a time of year when many Americans contemplate stacks of documents and receipts, dreading the moment when they’ll have to square accounts with government extortionists. That this comes as the state grows increasingly intrusive and coercive adds insult to injury, since we pay the bill for this mistreatment. But it could be worse; we could be Canadian!

Same Inquisition, Different Dollar

“As tax season ramps into high gear in Canada, the average citizen is facing an unholy ream of paperwork so daunting that even the Canada Revenue Agency isn’t entirely sure how it all works,” Tristin Hopper wrote this week for the National Post. “An infamous 2017 Auditor General report found that CRA call centres ‘gave wrong information to callers almost 30 per cent of the time’.”

Oh, OK. That doesn’t sound much different from the experience here in the U.S., where the IRS hands out the wrong information maybe a quarter of the time. (Or more. Who knows?) But Canadians pay a high price tag for the privilege of spelling “call centre” with the “r” in front of the “e”.

But a Higher Tax Bill North of the Border

“In December 2015, Canada’s new Liberal government introduced changes to Canada’s personal income tax system,” Canada’s Fraser Institute, a free-market think tank, noted in 2020. “Even before the changes, the country’s combined federal and provincial top marginal tax rates compared unfavourably to those in the United States and other industrialized countries. … Nine Canadian provinces occupy the list of 10 jurisdictions with the highest top combined marginal income tax rates and all provinces are in the top 13 [across the U.S. and Canada].”

Umm. Ouch.

In truth, comparing tax burdens requires a deep dive because of differences in how taxes are applied, income brackets, deductions, and the like. Fans of big government always want to balance costs against “benefits” of government services, as if being mugged to support a state monopoly should be welcomed by those who’d rather shop among competitors or entirely forgo some services. Suffice it to say that comparisons of provincial and state tax burdens generally reveal a lighter touch south of the border.

Worse, though, the think tank finds overall economic freedom slipping across Canada.

Higher Taxes Reflect Less Freedom

“For the first time, every Canadian province ranks in the bottom half of jurisdictions in our annual rankings of economic freedom in North America,” Fraser announced of its Economic Freedom of North America 2023 report. “Alberta in the all-government index is once again the highest-ranking Canadian province but it has declined substantially. In the all-government index, Alberta is now tied for 31st place out of 50 U.S. states, 32 Mexican states, 10 Canadian provinces, and the US territory of Puerto Rico.”

Economic freedom is defined as you’d expect, with economic activity involving “minimal government interference”. As the report adds, “an index of economic freedom should measure the extent to which rightly acquired property is protected and individuals are engaged in voluntary transactions”.

Fraser compares the states and provinces to each other within their countries, and also across Canada, Mexico, and the United States. For the purpose of comparing jurisdictions across three nations, the report looks at six areas of economic activity: government spending; taxes; labor market freedom; legal systems and property rights; sound money; and freedom to trade internationally.

The highest ranked jurisdiction is New Hampshire, followed in the first quartile by Florida and 20 other U.S. states. Alberta ranks at 31, between Missouri and Connecticut. British Columbia comes in at 45, with Ontario at 50 and Manitoba at 54. The last-ranked U.S. state is Delaware, at 53, though the territory of Puerto Rico ranks at 61. Quebec brings up the rear for Canada, at 56.

January 5, 2024

QotD: Hong Kong and the “league table” of world economic freedom

Filed under: China, Economics, Liberty, Quotations — Tags: , , — Nicholas @ 01:00

The Fraser Institute issued its annual Economic Freedom of the World report last week. It didn’t get much attention; it never does these days. Considered as a league table, the report is very boring and static, and makes poor copy.

The same countries typically appear at the top from year to year, and are separated mostly by microscopic, irrelevant differences. For 2017, whence the data in the new report come, Canada sat in eighth place just a hair above Australia and a hair below the U.K. Ascending to the top, we meet other siblings of the English-speaking world, Ireland and the U.S.; the Swiss Republic stands in its typical fourth; the relatively wild child of the Commonwealth, New Zealand, remains third; and then, in the top two places, you have the twin beacons of radical economic freedom, Singapore and Hong Kong.

Ah, yes, Hong Kong. The Special Administrative Region seems, for now, to have won a short-term victory in its struggle to preserve the conditions of its reunion with mainland China. This has not, ostensively, been a struggle over economic freedom per se, but it is not a coincidence that the rioting ultimately originated in a conflict over bookstores. It is mighty hard to draw a line where “economic” freedom stops and purely personal or civil freedoms begin, and the design of the index reflects this. It has a large basic rule-of-law component, includes mobility rights under the free trade factor, and takes points away for imposing military conscription. (This is surely a tiny tribute to the shade of Milton Friedman, who was one of the originators of the index.)

Even if Hong Kong’s immediate quarrel with China has been resolved for now, it is only a manifestation of what is likely to be a longer game. Clever columnists always like exoticizing talk about how the Chinese think in generations, but when it comes to Hong Kong, the cliché has weight. The 2019 riots, in showing how attached young HKers are to their distinct identity and to the English-speaking world, have revealed a nightmarish, even delegitimizing failure by the Chinese Communists. Mainland influence on Hong Kong education and politics has been used with the intention of prolonging and deepening the spirit of ’97; China, so often deemed the super-country of the future by admiring or fearful intellectuals, has tested the results of this effort in the eyes of the world and been made a laughingstock.

Colby Cosh, “Hong Kong’s still king in economic freedom rankings … for now”, National Post, 2019-09-17.

October 22, 2020

Carbon taxes may be the most efficient way to address GHG emissions, but no government has implemented them properly

Filed under: Business, Economics, Environment, Government — Tags: , , , , , , — Nicholas @ 03:00

I was persuaded by the economic arguments in favour of a carbon tax to address the externaly of greenhouse gas emissions, but I’ve long been skeptical that governments would actually implement them in a way to minimize economic distortion. A report from the Fraser Institute this week shows I was right to be doubtful, as none of the 31 OECD countries in the study have managed to introduce some form of carbon pricing without political “tinkering” … rather than replacing inefficient regulations, taxes and mandates with the carbon tax, they’ve generally just added carbon pricing on top of existing rules, making the carbon pricing scheme merely another tax grab that fails to achieve the stated goals:

Most economists consider human-made greenhouse gas (GHG) emissions an unintended negative externality of production and consumption. A negative externality occurs when the effects of producing or consuming goods and services impose costs on a third party which are not reflected in the prices charged for said goods and services. In the context of GHG emissions, this negative externality is calculated using the “social cost of carbon,” which is the future damage to society (adjusted to present value) of one additional tonne of carbon emitted to the atmosphere today.

Governments have a wide variety of policy alternatives to address the negative externality of emissions depending on the degree and depth of the policy intervention. They can either mandate individuals and firms to change their behaviour through com­mand-and-control regulations, grant subsidies and tax credits to foster cleaner energy sources, or use market-based mechanisms to correct the misalignment of incentives. It is widely acknowledged that carbon pricing, one of these market tools, is the most cost-effective policy to reduce emissions, as it relies on price signals and trade to provide flex­ibility to economic agents as to where and how emissions mitigation occurs.

[…]

This report includes thirty-one high-income OECD countries, where each country has either implemented a carbon tax, an ETS [emissions trading system], or a combination of both pricing mechan­isms. Carbon taxes are being implemented in 14 of them whereas 25 of these countries have their emissions covered by an ETS. Our analysis finds that, on average, 74 percent of carbon tax revenues in high-income OECD countries go directly into their general budget with no earmarking for any specific expenditure, while 12 percent are ring-fenced for environmental spending, and only 14 percent for revenue-recycling measures. This means that most governments are using carbon taxes as a revenue-raising tool rather than a mechanism to internalize the negative externalities of emissions in a cost-effective man­ner. Additionally, the vast majority of ETS revenues are being used to artificially acceler­ate the use of renewable energy sources, infrastructure, and technology.

The study also finds that no high-income OECD country has used carbon pricing to repeal emission-related regulations, but instead have introduced new ones following the adoption of the carbon tax or the ETS. Emissions caps, mandated fuel standards, technology-based standards, and renewable power mandates are just some examples of these regulations that undermine the cost-effectiveness of carbon pricing mechanisms. The majority of high-income OECD countries have a combination of support schemes for renewable energy sources, carbon pricing tools, and command-and-control regulations.

Overall, no high-income OECD country is following the textbook model of an optimal carbon pricing system, undermining their theoretical efficiency by design and implementation.

March 9, 2017

Words & Numbers: Women Prosper When Markets Are Free

Filed under: Economics, Education, Liberty — Tags: , , , — Nicholas @ 04:00

Published on 8 Mar 2017

This week, in honor of International Women’s Day, Antony & James discuss the strong correlation between economic freedom and gender equality found across the world. They argue that if you want to see a world of increasing equality and opportunity for women, you also want to free the economy from central planning and control.

June 9, 2014

Happy Tax Freedom Day!

Filed under: Cancon, Government — Tags: , — Nicholas @ 09:46

The Fraser Institute says today is Tax Freedom Day for Canadian taxpayers:

Tax Freedom Day for the average Canadian family falls on June 9, one day later than in 2013, according to the Fraser Institute’s annual calculations.

Tax Freedom Day measures the total tax burden imposed on Canadian families by the federal, provincial and local governments. If you had to pay all your taxes up front, you’d give government each and every dollar you earned before Tax Freedom Day. The later the Tax Freedom Day, the heavier the tax burden.

“Without our Tax Freedom Day calculations, it’s nearly impossible for Canadian families to know all the taxes they pay because governments levy such a wide range of taxes including income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel taxes, vehicle taxes, profit taxes, import taxes, ‘sin’ taxes on liquor and tobacco, and more,” said Charles Lammam, resident scholar in economic policy at the Fraser Institute and co-author of Canadians Celebrate Tax Freedom Day on June 9, 2014.

After accounting for all taxes, the average Canadian family (with two or more people) in 2014 will pay $43,435 in total taxes, or 43.5 per cent of their annual income. On the calendar, this percentage translates into a June 9 Tax Freedom Day, when Canadians start working for themselves and their families instead of government.

Provincial tax freedom days in 2014

May 21, 2014

“The VA really is a good example of a single-payer, socialized health system”

Filed under: Bureaucracy, Government, Health, USA — Tags: , , , — Nicholas @ 07:22

J.D. Tuccille on the Veterans Health Administration:

Just a couple of years ago, Paul Krugman pointed to the Veterans Health Administration (VHA) as a “huge policy success story, which offers important lessons for future health reform.” He gloated, “yes, this is ‘socialized medicine.'”

Similarly, a letter touted by Physicians for a National Health Program trumpeted “the success of 22 wealthy countries and our own Department of Veterans Affairs, which use single-payer systems to provide better care for more people at far less cost.”

How could a bloated government bureaucracy achieve such low-cost success? As we found out recently, it’s by quietly sticking veterans on a waiting list and putting off their treatment for months — sometimes until the patients are far too dead to need much in the way of expensive care. Which is to say, calling it a “success” is stretching the meaning of the word beyond recognition.

And, while the White House insists it learned from press reports about the secret waiting lists, Press Secretary Jay Carney acknowledges that the administration long knew about “the backlog and disability claims” that have accumulated in the VHA.

This should surprise nobody. Canada’s government-run single-payer health system has long suffered waiting times for care. The country’s Fraser Institute estimates [PDF] “the national median waiting time from specialist appointment to treatment increased from 9.3 weeks in 2010 to 9.5 weeks in 2011.”

Likewise, once famously social democratic Sweden has seen a rise in private health coverage in parallel to the state system because of long delays to receive care. “It’s quicker to get a colleague back to work if you have an operation in two weeks’ time rather than having to wait for a year,” privately insured Anna Norlander told Sveriges Radio.

[…]

So the VA really is a good example of a single-payer, socialized health system. Just not in the way that fans of that approach mean.

December 14, 2013

Canada edges ahead of the US in economic freedoms

Filed under: Cancon, Economics, Liberty, USA — Tags: , , , , , — Nicholas @ 13:12

Last week, the Fraser Institute published Economic Freedom of North America 2013 which illustrates the relative changes in economic freedom among US states and Canadian provinces:

Click to go to the full document

Click to go to the full document

Reason‘s J.D. Tuccille says of the report, “Canadian Provinces Suck Slightly Less Than U.S. States at Economic Freedom”:

For readers of Reason, Fraser’s definition of economic freedom is unlikely to be controversial. Fundamentally, the report says, “Individuals have economic freedom when (a) property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and (b) they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.”

The report includes two rankings of economic freedom — one just comparing state and provincial policies, and the other incorporating the effects of national legal systems and property rights protections. Since people are subject to all aspects of the environment in which they operate, and not just locally decided rules and regulations, it’s that “world-adjusted all-government” score that matters most, and it has a big effect — especially since “gaps have widened between the scores of Canada and the United States in these areas.” The result is is that:

    [I]n the world-adjusted index the top two jurisdictions are Canadian, with Alberta in first place and Saskatchewan in second. In fact, four of the top seven jurisdictions are Canadian, with the province of Newfoundland & Labrador in sixth and British Columbia in seventh. Delaware, in third spot, is the highest ranked US state, followed by Texas and Nevada. Nonetheless, Canadian jurisdictions, Prince Edward Island and Nova Scotia, still land in the bottom two spots, just behind New Mexico at 58th and West Virginia at 57th.

Before you assume that the nice folks at Fraser are gloating, or that you should pack your bags for a northern relocation, the authors caution that things aren’t necessarily getting better north of the border. Instead, “their economic freedom is declining more slowly than in the US states.”

August 8, 2013

Canadian think-tanks

Filed under: Cancon, Economics, Media, Politics — Tags: , , , — Nicholas @ 00:01

An interesting article in Forbes charts the rise of Canada’s distinctive collection of think-tanks:

Think Tanks in Canada have been developing policy analyses and advocating market oriented solutions for decades. Some of the oldest think tanks and advocacy groups, such as the C.D. Howe Institute, founded in 1958, and the National Citizens Coalition, NCC, founded in 1974, are still active. The idea for NCC developed from the success of newspaper advertorials.

The first one published by Colin M. Brown in 1967 pointed out that despite not being engaged in the Vietnam War, Canada’s federal government spending in the early 1960’s rose at a faster rate than government spending in the U.S. Canadian civil society took notice and reacted. The Fraser Institute was founded in Vancouver, B.C. in 1974, and its success and generosity in sharing its expertise led to a gradual but almost steady investment in think tanks across the country. Lest we forget, Canada is a big place. It is the second largest country in the world. The longest distance from east to west is 5,514 km — similar to the distance from New York City to London, or from New York City to Lima, Peru. Canada has six separate time zones and its provinces have considerable cultural and political diversity which call for a multiplicity of regional think tanks and policy efforts.

The “2012 Global Go To Report” devotes a section of its think tank rankings to institutes in Canada and Mexico. A growing number of Canadian free-market think tanks are appearing among the top.

Fraser Institute takes the lead. It received more mentions (10) than any other Canadian think tank and ranked first in Canada and 25th in the world. It is well known for its motto: “If It Matters, Measure It.” Many of its products, like the “Tax Freedom Day” and its economic freedom indices, have been replicated across the globe. Think tanks all over the world look at Fraser’s research as a guide in developing their own programs.

Brian Lee Crowley, the co-author of The Canadian Century, founded the Ottawa-based Macdonald Laurier Institute in 2010. It ranked third in the world in the category of best young institute. As it hit the ground running with great policy products, it also managed to rank ahead of other older think tanks, including the Atlantic Institute for Market Studies (AIMS) in Nova Scotia, founded in 1994. Crowley was also the founding president of AIMS. AIMS itself an organization that produces interesting work on market reforms in Canada’s maritime provinces — a part of the country that typically prefers big government as opposed to market-oriented solutions.

The Montreal Economic Institute deserves special mention for working in one of the most challenging cultural environments. It publishes in French and English, and is the only think tank in Canada to focus its efforts entirely on Quebec. The institute was founded in 1985 but became consolidated when Michel Kelly-Gagnon, a talented intellectual entrepreneur, became its leader in 1999 and restructured the organization. Kelly-Gagnon’s expertise is in high demand also outside Canada, and his team has produced tremendous materials advocating specifically for reforms to government-controlled health care.

June 10, 2013

Happy Tax Freedom Day

Filed under: Cancon, Economics, Government, Liberty — Tags: , — Nicholas @ 12:29

Today is the day that Canadians start earning money for themselves, having worked the year up to this point to pay for our various levels of government:

Tax Freedom Day, the day Canadian families have made enough money to pay off the total tax bill levied by all levels of government, falls on Monday, June 10 this year, according to the Fraser Institute’s annual calculations.

Tax Freedom Day arrives two days later than 2012 when it fell on June 8.

“Canadians are waiting an extra two days to celebrate Tax Freedom Day partly because governments across the country continue to increase taxes in an effort to make up for their overspending and deficits,” said Charles Lammam, Fraser Institute associate director of tax and budget policy and co-author of Canadians Celebrate Tax Freedom Day on June 10, 2013.

“What’s worse, some governments are relying on the most damaging types of tax increases including higher tax rates on personal income and investment, which will ultimately discourage economic growth.”

Among the tax increases announced so far are hikes to BC’s corporate income tax and top personal tax rate as well as its Medical Services Plan premiums; a new top income tax bracket in Quebec; increases to Manitoba’s Provincial Sales Tax and financial corporate capital tax; increases to New Brunswick’s corporate income tax and all four personal income tax rates; increased taxes on small businesses in PEI; cancellation of a corporate tax decrease in Saskatchewan; and increased Employment Insurance premiums federally.

Tax Freedom Day also comes later this year because Canada’s progressive tax system imposes a higher tax burden on families as their incomes increase.

You can use the Fraser Institute’s Personal Tax Freedom Day calculator to find your own tax freedom day here.

June 3, 2011

June 6 is Tax Freedom Day in Canada

Filed under: Cancon, Economics, Government, Liberty — Tags: , , , — Nicholas @ 13:27

You can find your personal tax freedom day (if you live in Canada) by visiting the Fraser Institute’s Tax Freedom Day Calculator.

March 31, 2011

Calculating “Tax Freedom Day” for each state

Filed under: Cancon, Government, USA — Tags: , , , — Nicholas @ 08:25

The least-taxed five states have already celebrated their Tax Freedom Days: Mississippi, Tennessee, South Carolina, Louisiana, and South Dakota. Other states may wait as long as May 2:

Americans will spend an average of 28% of their income to pay federal, state and local taxes this year, the Tax Foundation said Wednesday.

That means you will need to work 102 days — more than three months — just to earn enough to pay your tax bill. So on April 12 you will be free of your 2011 tax burden.

This year’s “Tax Freedom Day,” as the Tax Foundation calls it, comes three days later than last year. Rising incomes — resulting in more income tax owed — are largely to blame for its late arrival, the organization said.

For Canadians, you can calculate your own personal Tax Freedom Day using the Fraser Institute’s customized web tool. If I lived in Alberta, for example, my Tax Freedom day would be May 13, but as I live in Ontario it’s actually May 27.

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