Quotulatiousness

August 31, 2018

Farewell, buck-a-beer publicity stunt, we hardly knew ye

Filed under: Business, Cancon, Politics — Tags: , , , , — Nicholas @ 03:00

Chris Selley on the all-too-brief publicity stunt of cheaper beer for Ontario:

President’s Choice is ending its buck-a-beer promotion on Sept. 3, just days after it started: We get one week, one long weekend and then out of the pool, party’s over, back to class. PC-branded beer will rocket back up to $1.38 a bottle when you buy 24 at The Beer Store or $1.65 when you buy 12, which highlights just how steep — and presumably unsustainable — the discount really was. We shall see how long the two other participating breweries’ offers last, but they made it quite clear, as did PC, that this was a limited-time offer prompted by Doug Ford’s most shamelessly blunt populist pledge.

My goodness, though, what a commotion it will leave in its wake. Some brewers quite understandably took the opportunity to note the impact of aluminum tariffs on their bottom lines, to complain that Ford’s government was playing favourites by giving away expensive product placement in LCBO stores for $1 beer, and to note the government is actually raising taxes on beer.

Others, however, waxed utterly scandalized. “How about buck a pound of steak? Who would eat that?” asked one Toronto brewer who had perhaps not entirely thought through his rhetorical question. “We haven’t even given two thoughts about this,” Great Lakes Brewery’s communications manager, Troy Burtch, told the Toronto Star. “Why would anyone do this?” Burtch and Great Lakes have signalled their total uninterest by tweeting incessantly about it.

The Canadian Taxpayers’ Federation went after some of the affronted craft brewers for accepting taxpayer subsidies for their higher-end products. People on social media lined up for and against buck-a-beer, vowing to boycott the participants or those complaining about the program.

The whole thing was a dumb Ford Nation stunt, no question. But good grief. You can hardly blame the breweries, either for participating or for not: they were just trying to wring as much publicity as they could from the situation. No one is really any worse off, or at least not much. What we were really seeing among the chattering classes was a rerun-by-proxy of the June 6 election: to drink Ford’s swill was to vote Ford Nation; to boycott it was to stand bravely against their entire agenda.

August 10, 2018

The tough part of selling a national carbon tax … is the “tax” part

Filed under: Cancon, Economics, Environment — Tags: , , — Nicholas @ 05:00

As Colby Cosh points out, you can find all sorts of economists to explain why a properly constructed and applied carbon tax is the least harmful way to reduce carbon output, but Canadians typically focus on the “tax” part and not the claimed environmental efficiency benefits:

In yesterday’s Financial Post, the Calgary economist Jack Mintz asked the question “Why are carbon taxes so unpopular?”, pointing out that plenty of countries and jurisdictions have commitments to climate progress and energy efficiency but that few use this particular policy instrument. I guess Jack wouldn’t have had much of a column if he had just adopted the spirit of an auto mechanic explaining a breakdown to a naive car owner and jabbed directly at the problem. “See that word ‘taxes’? There’s your problem right there.”

And, truly, it is not quite as simple as that. But, as Mintz suggests, it is a big part of the difficulty. As a means of helping reduce carbon output, carbon taxes are competing with subsidies and regulations. Pervasive carbon taxes are, as a general principle, a less costly way of eliminating freely exhaled carbon, pound for pound or ton for ton.

If the tax is well designed, you are slapping a uniform unit price directly onto the thing you are trying to prevent; and you are leaving people and businesses to make decentralized judgments, based on their knowledge of their own circumstances, about whether to avoid the tax, and when, and how to do it. Even though the initial level of the tax must be something of a guess, you can adjust it by arbitrarily small increments until you have eliminated just as much carbon output as you wish to.

Economists will recognize that last paragraph as a grocery list of the relative advantages of carbon taxation. But voters are predisposed to hate taxes, and are very sensitive to their size and their side effects. They may not like government subsidies for windmills or carbon-capture schemes or certain species of light bulb either; but subsidies can usually be sold on the basis of local job creation or business incubation, and they can be — let’s face it, inevitably are — adjusted for maximum electoral benefit.

For my part, I don’t disbelieve the economists on the efficiency arguments … I just don’t trust the government to design and implement such a tax without rigging the system to benefit favoured corporations, regions, and donors.

July 26, 2018

The Trump tariffs are working exactly as designed

Filed under: Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 05:00

That is, they’re becoming a drag on the economy and will take away a lot of the economic activity that was stimulated by the tax cuts enacted earlier. Warren Meyer says that it’s time that congress reclaimed the tariff powers it has outsourced to the executive branch over the years:

I Know Congress Hates To Challenge A President of Its Own Party, But…

…Congress simply has to pare back the tariff authority it has delegated the President. It is simply insane that Trump can just unilaterally impose 20% tariffs on foreign automobiles, a $200 billion new tax on US consumers.

It is appalling to see Trump following the usual blue model of economic regulation, imposing one intervention after another, each meant to fix the unintended consequences of the last intervention. Steel tariffs increased costs to domestic auto makers, so Trump proposes tariffs on foreign autos. When tariffs result (inevitably) in counter-tariffs on US agricultural exports, Trump proposes more agricultural subsidies. People (not me) lament gridlock in government and want more fluid lawmaking — well here it is. And it sucks. It is mindless and reactive and emotional and totally ignorant of economics.

These tariffs, when combined with earlier actions, will result in tax increases on consumers that swamp the tax cuts Trump and the Republicans were so proud of last year.

Jon Gabriel on the most recent “fix” for one of those unintended consequences:

A few months back, President Trump declared that “trade wars are good, and easy to win.” Now, just as nearly every economist on the left and right predicted, Americans are being hurt.

The White House slapped tariffs on imported steel and aluminum. China retaliated with planned tariffs on soybeans, meats and various agricultural products. Mexico, Canada and the European Union also struck back at farm goods and other U.S. exports.

A smart leader would notice his mistake and end the destructive policy. Instead, Trump declared that “tariffs are the greatest” and created a multibillion-dollar federal program to mitigate a small part of the mess he created.

Since Agriculture Secretary Sonny Perdue estimated $11 billion in damage to the industry, he announced a $12 billion payoff to make up the difference.

The administration used emergency executive powers created during the Great Depression; that way Congress wouldn’t get to weigh in.

“This is obviously a short-term solution that will give President Trump time to work on a long-term trade policy and deal to benefit agriculture as well as all sectors of the American economy,” Perdue told reporters.

It’s certainly short-term, but hardly a solution. Trade deals and networks are disrupted, farmers can’t plan for the future, and non-agricultural industries are still losing money. Not to mention all the American consumers watching prices rise on all sorts of household goods.

But red states have a lot of farmers and the midterms are just three months away. Maybe borrowing a few billion dollars will hide enough economic pain to convince voters to keep Republicans in power for two more years.

July 18, 2018

QotD: Understanding how company profits can be used

Filed under: Australia, Business, Economics, Government, Quotations — Tags: , — Nicholas @ 01:00

In its fight against company tax cuts, [the Australian] Labor [Party] peddles the myth that company tax cuts are a windfall for big businesses and their shareholders, this week even launching ads suggesting [Australian PM] Malcolm Turnbull supports company tax cuts because he’ll personally benefit as an investor.

It’s a myth easily debunked. Think about it. What exactly can a company do with the extra money retained from paying less tax? It can only spend profits in two ways: paying dividends to shareholders or spending more on its operations.

Dividends are subject to tax, including withholding tax for foreign shareholders. Suggesting Turnbull or any other investor will get a windfall is a blatant lie.

In fact, many shareholders will pay more tax to make up the greater difference between the company tax rate and their own tax rate. That’s how dividend imputation works, as Labor well knows.

Alternatively, the company can spend more on things like technology, plant and equipment, funding research and development, expanding its sales force or opening new shopfronts or branches. In other words, more money paid in wages to workers and buying goods and services from suppliers.

All of that spending is also taxed. Workers pay income tax. GST [Goods and Services Tax] is collected on goods and services. Suppliers pay company tax or income tax themselves.

Lower company tax simply allows a business to use more of its money on something productive before the money is collected by government.

Nyunggai Warren Mundine, “Bill Shorten’s Labor would kill the reforms of Hawke and Keating”, Financial Review, 2018-06-26.

June 16, 2018

Who will think of the children Australian civil servants???

Filed under: Australia, Bureaucracy, Government, Humour — Tags: , , , — Nicholas @ 03:00

A tale from Catallaxy Files that’s sure to tug on your heartstrings:

In Canberra today, the Australian Greens announced a new tax fairness policy to remedy a design fault in the current system.

According to the Greens, it seems that it is only Australian public servants (local, state and Federal) who have been able to negotiate salary increases. As a consequence, because of their increased salaries, public servants are constantly pushed into higher tax brackets with the result that impost of bracket creep disproportionately falls on them.

Independent economic research has confirmed this phenomena. The Australia Institute economists have models showing that up to 80% of Commonwealth bracket creep tax receipts are paid by Australian public servants.

The Australian Greens believe that just because public servants earn more than private sector workers, they should not be required to pay more tax. Australian Greens’ Treasury spokesperson Adam Bandt said:

    Australian public servants should not be forced to carry the brunt of government spending, including spending on other public sector salaries. This is a role for the private sector. It is manifestly unfair that just because public servants have been able to extract additional salaries that they should be forced into higher tax brackets.

In response, the Australia Greens have announced the Tax Equalisation and Redistribution Designation (TERD). Under the TERD, full-time, part-time and casual public sector workers will be subject to a separate tax schedule with a flat 15% rate for income above $500,000. Public servant income below $500,000 will be tax free.

Of course, it would be even simpler for accounting purposes just to exempt the civil service from paying tax at all — we might expect that to be a Green Party policy plank in a year or two (or even our own NDP, who have a lot of support from our unionized civil service).

Reminder: Catallaxy Files is not a parody site … although this particular story is a parody. Not following Australian politics closely, I only twigged when they got to the acronym for the program…

June 5, 2018

Taxing Work

Filed under: Economics — Tags: , , , — Nicholas @ 02:00

Marginal Revolution University
Published on 22 Nov 2016

For most people in developed countries, retirement comes down to a choice: weighing the costs and benefits of continuing to work vs. leisure. An important factor influencing an individual’s decision is their government’s tax and retirement policies.

Most developed countries offer a government-run retirement system with benefits that kick-in at a certain age. That age varies from country to country, usually starting when a worker reaches their early sixties.

Of course, not everyone wants to retire simply because they can receive benefits. People that really love their work may choose not to retire. In some countries, though, that decision can be heavily penalized through lost retirement benefits.

Taxes on earnings plus penalties, like losing retirement benefits, gives us an implicit tax rate. Countries with higher implicit tax rates for older workers see a much lower labor force participation rate for people considered retirement age.

As you might imagine, these government policies on retirement can be extremely costly. Many European governments that penalize non-retirement have been working to reform these policies and reduce implicit tax rates for elderly workers.

In the Netherlands, which had one of the highest implicit tax rates in the 1990s, an older worker could have actually had to pay to work. Since the Netherlands reformed their policies surrounding retirement, they’ve seen an increase in the labor force participation rate for older workers.

In the next video, we’ll cover another big influence on female labor force participation: The Pill.

June 4, 2018

The economic damage of tariffs

Filed under: Economics, History, Politics, USA — Tags: , , , , — Nicholas @ 05:00

Tim Worstall fisks a recent Pat Buchanan brain fart article on the glories of erecting tariff walls against foreign trade:

Pat Buchanan has been going on for decades about how wondrous tariffs are and if only they were brought back then things would be just peachy. Sadly, this all seems to be based on his not understanding trade, tariffs, nor apparently even history. That’s not a good set of recommendations for a policy about trade and tariffs, one that has been tried many a time in history.

Now, it is entirely true that if we returned to a more Hamiltonian policy era then we’d all be richer. But that wouldn’t be because we had tariffs which paid for government rather than an income or corporate tax. It’s because government would be confiscating a very much smaller portion of what we all produce to pay for itself. If the Feds took 3% of everything we do instead of the current 18% or so then sure, we’d all be richer. But that’s true however that tax is raised.

[…]

His argument is that, protected from foreign competition, American business was able to develop and grow into being world beaters. No, I don’t think this is true – I insist that behind tariff barriers companies stagnate. Indeed it’s standard economics that the medium to long term effects of trade are that the competition from foreigners is what makes the domestic companies stronger and more productive. But put that argument to one side. Assume that Buchanan is correct.

For his conclusion to be correct then it must have been true that the total costs of trade were rising in that time period. Total costs being tariffs plus transport. Only if the total costs were rising was protection rising. The tariffs are only part of the story. And as it happens total protection was falling over this time period. The falls in the costs of transport – for the US externally primarily the steam ship – were greater than the rises in the tariffs. Thus the US was becoming more open to trade at this time when industry was booming and growing to world class levels.

That’s not an argument in favour of trade protection now, is it?

    The U.S. relied on tariffs to convert from an agricultural economy in 1800 to the mightiest manufacturing power on earth by 1900.

Well, it’s also true that what the US was inside those tariff barriers was the largest free trade area in the world. I’m the guy insisting that free trade makes places grow, Pat the opposite. And the place with more free trade among more people than anywhere else grows fastest? That’s a point in my favour, no, not Pat’s? Remember, the US Constitution expressly forbids the individual states from having tariffs between them…..that regulation is left to the Feds who have never imposed them.

    How have EU nations run up endless trade surpluses with America? By imposing a value-added tax, or VAT, on imports from the U.S., while rebating the VAT on exports to the USA. Works just like a tariff.

No, a VAT does not work like a tariff. In no manner at all does it do so in fact. As every economist keeps trying to point out. Within the EU all goods and services, no matter where they’re made, pay the exact same rate of VAT. Well, OK, ladies unmentionables pay a lower rate than motor cars, that’s true, but all unmentionables pay the same rate, all cars. There is no difference made between domestic and foreign production. It’s entirely unlike a tariff therefore, the crucial component of which is that distinction made between home and foreign production.

Stuff made in the EU and sold in the US pays no VAT. Stuff made in the US and sold in the US pays no VAT. Again, we’ve no distinction by source or origin, this is entirely and completely unlike a tariff.

April 25, 2018

Ontario’s ongoing guaranteed annual income experiment

Filed under: Cancon, Economics, Government — Tags: , , , , — Nicholas @ 05:00

Finland may have given up on their guaranteed annual income pilot, but Ontario’s similar program is still getting positive reviews from GAI fans like Andrew Coyne at the National Post. Colby Cosh isn’t quite as impressed with the program or the chances of it being expanded beyond its current small scale:

The Ontario plan is giving randomly selected low-income working-age individuals $16,989 a year in free money. That’s the basic story, with the detail that couples are eligible for a combined $24,027. This amount replaces provincial welfare, employment insurance, or early Canada Pension Plan payments, dollar-for-dollar; Canada Child Benefit cheques are strictly separate, however, and if study members go out and earn some income, their payment is reduced by 50 cents for every dollar they make until the supplement hits zero.

This is the “negative income tax” model of guaranteed income, intellectually pioneered by the Austria-Mont Pelerin-Chicago strain of economic thought that is my personal heritage and Coyne’s alike. The conclusion of the PBO paper is that the total cost of such a program for the entire country, applied to this year’s economy, would come to about $76 billion.

[…]

Kevin Milligan, a UBC economist who is skeptical of GAI, often points out that GAI advocates face the challenge of reconciling three conflicting elements of such a program: we want it to have a reasonable overall cost, we want it to be generous enough to bother with, and we want it to impose a low “clawback” rate on earned income so as not to discourage that.

The “Ontario model” sort of resolves the “trilemma” by being soggy on all three fronts. The $17,000 basic amount was chosen specifically to come to 75 per cent of Statistics Canada’s “low-income measure”: it is a guaranteed not-even-low income. (At the same time, I notice that the basic personal exemption on federal income tax forms is just $11,809 this year. Before we hurl ourselves headlong at a new social program of a relatively untested nature, maybe we could explicitly just stop taxing the poor first?)

Three points of GST may seem like a reasonable overall cost, if it could be realized, but an entitlement such as this is bound to be a one-way street: by the time we decide we do not like the effects, it will have become the next thing to a sacrament. (Canada’s guaranteed federal income defines us as a country!) Meanwhile, the 50-per-cent clawback in the Ontario model is fairly dramatic, and, moreover, under the model, couples who begin cohabiting would stand to lose up to $10,000 a year of GAI payments between them.

April 12, 2018

Canadian Music Policy Coalition pushes to revive the idea of an “iPod tax”

Filed under: Cancon, Law, Media — Tags: , , , — Nicholas @ 05:00

Michael Geist on one particular rent-seeking submission to the federal government pushing for changes to Canadian copyright law:

The long-awaited Canadian copyright review is set to kick off hearings next week as a House of Commons committee embarks on a year-long process that will hear from a wide range of stakeholders. My Globe and Mail op-ed notes that according to documents obtained under the Access to Information Act, however, one stakeholder – the Canadian Music Policy Coalition, an umbrella group representing 17 music associations – got an early start on the review process last fall by quietly submitting a 30-page reform proposal to government officials.

The proposal, titled “Sounding Like a Broken Record: Principled Copyright Recommendations from the Music Industry”, calls for radical changes that would spark significant new consumer fees and Internet regulation. The plan features new levies on smartphones and tablets, Internet service provider tracking of subscribers and content blocking, longer copyright terms, and even the industry’s ability to cancel commercial agreements with Internet companies if the benefits from the deal become “disproportionate.”

The coalition, which includes the Canadian Council of Music Industry Associations, the Canadian Music Publishers Association, and copyright collectives such as SOCAN, asks the government to follow three main principles as part of its reform process: real-world applicability, forward-thinking rights, and consistent rules.

But the coalition proposal largely avoids discussing the current state of the industry, perhaps with the intent of leaving some with the impression that file sharing remains a significant problem. The reality is the music industry in Canada, led by the massive growth of authorized music streaming services, has enjoyed a remarkable string of successes since the last time copyright law was overhauled in 2012.

The Canadian music market is growing much faster than the world average, with Canada jumping past Australia last year to become the sixth largest music market in the world. Music collective SOCAN, a coalition member, has seen Internet streaming revenues balloon from $3.4 million in 2013 to a record-setting $49.3 million in 2017.

Moreover, data confirms that music piracy has diminished dramatically in Canada. Music Canada reports that Canada is below global averages for “stream ripping”, the process of downloading streamed versions of songs from services such as YouTube. Last month Sandvine reported that file sharing technology BitTorrent is responsible for only 1.6 per cent of Canadian Internet traffic, down from as much as 15 per cent in 2014.

Yet despite the success of Internet streaming services and the marginalization of file sharing activity, the coalition has crafted a reform proposal that would be more at home in 2008 than in 2018. For example, the industry is now calling for new fees to be set by the Copyright Board on all smartphones and tablets to compensate for personal copying. The revival of the so-called “iPod tax” would today go far further than just digital music players, as the coalition is asking the government to amend the Copyright Act to allow for fees to be imposed on all devices.

April 5, 2018

QotD: ESR’s “Iron Laws of Political Economics”

Filed under: Economics, Government, Politics, Quotations — Tags: , , , , , — Nicholas @ 01:00

Mancur Olson, in his book The Logic Of Collective Action, highlighted the central problem of politics in a democracy. The benefits of political market-rigging can be concentrated to benefit particular special interest groups, while the costs (in higher taxes, slower economic growth, and many other second-order effects) are diffused through the entire population.

The result is a scramble in which individual interest groups perpetually seek to corner more and more rent from the system, while the incremental costs of this behavior rise slowly enough that it is difficult to sustain broad political opposition to the overall system of political privilege and rent-seeking.

When you add to Olson’s model the fact that the professional political class is itself a special interest group which collects concentrated benefits from encouraging rent-seeking behavior in others, it becomes clear why, as Olson pointed out, “good government” is a public good subject to exactly the same underproduction problems as other public goods. Furthermore, as democracies evolve, government activity that might produce “good government” tends to be crowded out by coalitions of rent-seekers and their tribunes.

This general model has consequences. Here are some of them:

There is no form of market failure, however egregious, which is not eventually made worse by the political interventions intended to fix it.

Political demand for income transfers, entitlements and subsidies always rises faster than the economy can generate increased wealth to supply them from.

Although some taxes genuinely begin by being levied for the benefit of the taxed, all taxes end up being levied for the benefit of the political class.

The equilibrium state of a regulatory agency is to have been captured by the entities it is supposed to regulate.

The probability that the actual effects of a political agency or program will bear any relationship to the intentions under which it was designed falls exponentially with the amount of time since it was founded.

The only important class distinction in any advanced democracy is between those who are net producers of tax revenues and those who are net consumers of them.

Corruption is not the exceptional condition of politics, it is the normal one.

Eric S. Raymond, “Some Iron Laws of Political Economics”, Armed and Dangerous, 2009-05-27.

March 13, 2018

The economic argument for carbon taxes

Filed under: Economics, Environment, Government — Tags: , , , , — Nicholas @ 05:00

Tim Worstall explains what a carbon tax is supposed to do, as opposed to what many environmental activists want it to do:

The essential economic analysis is that carbon emissions are an “externality.” There are costs to third parties of the freely chosen activities of consenting adults. If there aren’t such third party costs then the adults get to consent – as long as your bedroom contains only those freely consenting adults then what goes on there is up to you. But if there are those third party costs – say, the noise from the enjoyments causes lost sleep among the neighbours – then some societal power to force an adjustment seems reasonable enough.

Again, economics analyses here by suggesting that we’ll get too much, or too many, of those third party costs if people aren’t paying for them. If we’ve not got to pay to soundproof the orgy then we’ll have more orgies than if we do. It’s fair that we insist upon such soundproofing perhaps. But sometimes we cannot insist upon such direct actions – then we’ve got to try and change the price system. Which is what the carbon tax does.

There are benefits to using fossil fuels – transport, heat, cooking and so on. Given current technological levels immediate banning would mean billions die – commonly thought to be a Bad Thing. But there are those costs imposed upon others as well in the climate change the emissions cause. The answer is that we look to that greatest good of the greatest number, the utilitarian answer. Where emissions produce more value than the damage they cause – including over time – then we want them to continue. Where they don’t then we want them to stop. That way we get the maximum possible value being created and thus all humans – over time – are as rich as we can be given current technologies.

Calculating what this number is, this tax rate, is also known as determining the social cost of carbon emissions. The Stern Review may or may not have exactly the right number but it’s a good enough starting point, $80 per tonne CO2. Say 50 cents or so per gallon of gas. Slap that tax on and we’ve corrected the price system. People who use gas are now paying the environmental costs of their use. So, anything they use it for must create greater value than the damage being caused. We’re copacetic at this point, we’ve the optimal level of emissions.

Note that this logic still works whatever you think of the rate. 1 cent or $100 a gallon, the logic is still the same, we’re only arguing over what is that social cost of carbon. Stick a tax on of whatever it is and we’re done.

Even if climate change isn’t a problem, or isn’t happening, we do still need some tax revenues somewhere. It’s also better to tax consumption than incomes or capital, better to tax things inelastic in demand with respect to price than those elastic. Fossil fuel consumption taxation is a consumption tax and the demand for fossil fuels is, in the short to medium term at least, inelastic. We’re fine with fuel taxation therefore.

For a quick backgrounder on the concept of externalities, MR University did a video on this a few years back. For reasons to worry that your government might not be quite as revenue-neutral in imposing a Pigouvian tax, Warren Meyer also has doubts.

January 27, 2018

Econ Duel: Rent or Buy?

Filed under: Economics — Tags: , , , — Nicholas @ 02:00

Marginal Revolution University
Published on 13 Sep 2016

Owning a home is a huge part of the American Dream. But is the dream of home ownership really all it’s cracked up to be?

In this new Econ Duel from Marginal Revolution University, Professors Tyler Cowen and Alex Tabarrok weigh in on the issue. Each representing a side of the home ownership debate, the two professors ask what’s smarter — to rent, or to buy?

On the “buy” side, Tyler Cowen shares the tax advantages of buying a home as well as the effect home ownership has on one’s stability and savings regimen. Does buying a home force us into better savings habits?

Against those arguments, we have Alex Tabarrok, coming down on the “rent” side of the equation.

Among other points, he talks about the real beneficiary of tax breaks (hint: It may not be you!). Along with that, Alex tackles the trials and tribulations of home-buying, in places like San Francisco, New York, or Boston, where a combination of scarce building permits and increased demand drive up home prices. Plus, doesn’t owning a home — and committing a 20% down payment — break the diversification rule of good investing?

All that said, though, here’s the real question that matters — which side are YOU on? Watch and let us know in the comments!

January 18, 2018

Live in Toronto? Feel undertaxed? Here’s your easy solution to give the city more of your money

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

Chris Selley points out that in addition to your opportunity to pay more than your fare share of federal tax (Her Majesty, in right of Canada, is always happy to accept any amount you wish to donate), Toronto taxpayers are able to use a simple form to donate money to the city:

Click to see full-size image.

So here’s a proposal: Torontonians who consider themselves undertaxed should give the city the difference. Every time you get a property tax bill, you get a little blue insert inviting contributions of up to $50,000 to the program of your choice or just into general revenues. Say your house is worth $750,000. Your bill should be around $4,962, or 0.66%. If you think Mississauga’s rate (0.85 per cent) or Brampton’s rate (1.05) per cent is more appropriate, then just cut the city a cheque for the difference ($1,413 or $2,913, respectively), send it back in the envelope provided and watch for your tax receipt. There are a lot of progressive homeowners in this city. It wouldn’t take much before we were talking about real money.

Is this likely to happen? Certainly not. The inserts date from 2010, when council cancelled the vehicle registration tax. A parade of deputants to budget committee said they didn’t want the money back; council gave them an easy way to give it back; almost nobody did, and almost nobody does now. The grand total of voluntary contributions under the property tax envelope program in 2016 was $81,320.77, and one of those donations was for $50,000.

Total contributions to city programs are of course much larger. The Toronto Public Library (which I support, however modestly) issued tax receipts for $3.4 million in donations in 2016, the zoo for $1.1 million. But the city itself only issued $1.35 million in total tax receipts, even as many of us beg it to take more of our money and spend it on council-approved priorities.

It might not be fair to pay more than your neighbour. But when you tell pollsters you want to be taxed more, political strategists don’t believe you. And when Doug Ford can win 33 per cent of the vote after four years of his brother as mayor, it’s tough to say they’re misguided. You can wait for a critical mass of your fellow citizens to come around to your worldview, or you can nudge the process along with your pocketbooks. Your money is as good as anyone else’s.

January 7, 2018

QotD: The Whiskey Rebellion

Filed under: History, Liberty, Quotations, USA — Tags: , , , , , , — Nicholas @ 01:00

Ninescore and fifteen years ago, with the ink only just sanded on the United States Constitution, President George Washington and Treasury Secretary Alexander Hamilton decided it was time to try out their shiny brand-new powers of taxation.

Their first victims would be certain western Pennsylvania agricultural types long accustomed to converting their crops into a less perishable, more profitable high-octane liquid form. Unfortunately for the President and the Secretary, many of these rustics, especially near the frontier municipality of Pittsburgh, placed a slightly different emphasis than high school teachers do today on the Revolutionary slogan regarding “taxation without representation”. In their view, they’d fought the British in 1776 to abolish taxes and they weren’t interested in having representation imposed on them by that gaggle of fops in Philadelphia, the nation’s capital. They made this manifestly clear by tarring-and-feathering tax collectors, burning their homes to the ground, and filling the stills of those who willingly paid the hated tribute with large-caliber bullet holes.

Feeling their authority challenged, George and Alex dispatched westward a body of armed conscripts equal to half the population of America’s largest city (Philadelphia once again, later famous for air-dropping explosives on miscreants charged with disturbing the peace). Four hundred whiskey rebels, duly impressed by this army of fifteen thousand, subsided. The miraculous process by which the private act of thievery is transubstantiated into public virtue was firmly established in history. The results — chronic poverty and unemployment, endless foreign wars, and reruns on television — are with us even today.

L. Neil Smith, “Introduction: A Brief History of the North American Confederacy”, The Spirit of Exmas Sideways: a “novelito” by L. Neil Smith.

December 29, 2017

2017 wasn’t all doom and gloom and Trump tweet wars

Filed under: Bureaucracy, Business, Government, USA — Tags: , , , , , — Nicholas @ 05:00

Veronique de Rugy manages to find three things that 2017 produced that somehow didn’t kill millions of Americans (so far, as far as we know):

First, President Donald Trump just signed a historic reduction in the corporate income tax rate, from 35 percent — the highest of all industrialized nations — to 21 percent. And except for a one-time repatriation tax, the U.S. will no longer tax most profits made by businesses overseas.

Both changes should boost economic growth and American workers’ wages. Moreover, the reform removes many of the distortions that discourage companies from investing foreign-earned income in the United States and prompt them to use tax avoidance techniques.

Second, this was a very good year for deregulation. Cutting taxes isn’t the only way to boost growth and raise wages; innovation may matter even more. Getting rid of duplicative and outdated regulatory hurdles to innovation promises to have a real impact on our lives. That’s what the Trump administration, with the help of Congress, seems committed to doing.

When the president first got to the White House, for example, he froze many not-yet-implemented Obama-era regulations. These include the punishing overtime pay regulation, which would have increased the cost of employing workers and ultimately reduced their base compensation to offset the increase in overtime pay.

[…]

Last but not least are the sustained efforts by Sens. Pat Toomey, R-Pa., and Richard Shelby, R-Ala., to slow down the process that would restore the Export-Import Bank, a bastion of cronyism, to its full and former glory.

Appointing enough board members to give Ex-Im a full quorum would instantly restore the agency’s ability to sign off on deals above $10 million for the benefit of a handful of very large foreign and domestic corporations. By resisting, the two senators are fighting a lonely fight on behalf of the unseen victims of corporate welfare.

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