Category Archives: Budget

Today you actually get paid

Woot. Today is Tax Freedom Day in Canada. That’s right. June 7. That’s the day, according to the Fraser Institute, that the average family stops working for the state and starts working for itself. And that was the good news.

The bad news is that if governments paid for everything they took, that is, if you count deficits as if they were covered by taxation now instead of later, it still wouldn’t be tax freedom day until June 18. (This methodology I believe relies on mean averages for income and taxation.)

You can find the depressing details including a provincial breakdown in their study. But here’s a question to ponder as you do so. How can it be that, with Canadians so much wealthier today than they were thirty or sixty years ago, we can possibly need so much more help from government?

Remember, as we get richer, government could keep getting bigger while tax freedom day got earlier. Why isn’t it happening? If it’s too much to ask that government actually get smaller as our private means, including for charity, get larger, couldn’t it at least take a smaller share?

Instead the total tax rate (see p. 9 of the Fraser study) is higher in every province except Alberta and BC today than in 1981. So where does it all end? And why does current political debate take so little notice of the relentless expansion of the state relative to citizens, talking instead about all the wonderful things we could get if only government finally became truly big and busy?

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King Justin

In my latest column for the National Post I argue that Trudeau manhandling MPs was not just rudeness to colleagues. It was an assault by the executive branch on the legislature and, therefore, on Canadian citizens, who elect MPs to control the government on their behalf.

One more reason we urgently need to fix our Constitution. Please back our documentary project and help us show the way.

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A sleeper fiscal issue

Yet another warning in my inbox this morning from the C.D. Howe Institute (full disclosure: my brother runs the place and was co-author of the study) about how the federal government continues systematically and dramatically to understate the unfunded liability in its employee pension plans. It may seem like a sleeper. But one day it will wake up and it won’t be pleasant.

According to authors William Robson and Alexandre Laurin, the feds admit to roughly a $150 billion shortfall. But the real figure is $269 billion. And, they say, if the difference were added to the national debt (as the admitted amount already is) it would stand at $730 billion not $612 billion.

It goes without saying that you should not try this sort of thing at home. The government would not like it.

It’s a Three Fold Total Bad. In the first place, it’s deliberately dishonest. C.D. Howe has been warning about it for years and they are not some radical right-wing outfit prone to bungling or torqueing their calculations.

In the second, it’s fiscally reckless. Even the move to have federal employees fund their pensions more fully is undermined, that other Robson and Laurin note, because they calculate the amount required according to the understated figure. And all the blather about how debt is small and manageable as a share of GDP is also undermined by such jiggery pokery.

In the third, it’s yet another case of people in government cutting themselves a great big generous slice of pie while the rest of us tighten our belts in hard times and, when we look at them sidewise, go “What? What?” as though their cheeks were not bulging. Whatever happens, federal employees will collect generous pensions they have not paid for. Even if the rest of us have to be taxed within an inch of bankruptcy to make it happen.

Then they wonder why government is in disrepute nowadays. All the way to the bank.

Of course, they’re counting on us to sleep through the various alarms. But this is no time to hit the snooze button.

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Been there, done that, got the debt

In my latest contribution to the Economic Education Association of Alberta’s “Been There, Done That – Shouldn’t Have” series I recall what happened last time governments started borrowing as if there was no tomorrow and then it came anyway.

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The ghost of deficits yet to come

In my latest National Post commentary I urge the federal Liberals to recognize that deficits are bad for the economy and for government finances and to reject the Harper legacy of running them to “stimulate” the economy. (NB “While deficit spending may have a beneficial short-term impact” was an editorial insertion and I do not agree that it is a possibility.)

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Let’s get this over with

In my latest National Post column I argue for trying the best imaginable government welfare system, the Negative Income Tax, in order to learn the bitter lesson that government welfare doesn’t fail when money doesn’t reach the intended beneficiaries but when it does reach them.

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Tax freedom day already?

Just kidding. Yes, the Fraser Institute’s annual calculation reveals that June 10 is indeed Tax Freedom Day this year. But we’re nearly halfway through this year and this magnificent event is a day later than last year.

I’m constantly hearing how some heartless administration has slashed this, gutted that, neoliberalism is rampant, Occupy is protesting, we need a national strategy, it’s time to restore our faith in government and so on. Then you turn around and find the blob hasn’t gotten any smaller.

Maybe it’s time some conservative party in power somewhere actually, you know, made government smaller the way we keep hearing that conservatives do.

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