What are your 'fringe' political ideas?

[Niflmir]

Are you sure about that? I'd love to see some numbers/ a link to back up this statement: I'm not trying to call you a liar, I'd just like to see the math laid out because this surprises me. Alberta has paid more per capita in transfer payments to confederation than any other province over the past 2 decades or so but thats also because the average wages were higher and the overall health of the economy was better than most other provinces.



Relating this to hourly paid people where overtime pushes them into a different bracket it can be sort of true: their real per hr income may drop even if their net is higher thus the return on time is less for them thus it is a loss. It can also translate into less income on their paycheque but they should be able to recoup that loss on their refund.

I honestly think (like what Curiosity was alluding to) this is why people talk about flat taxes: just the complication factor. Its obscene that so many members of the public are so intimidated by our taxation systems that we rely on the H&R Blocks of the world to the extent we do... it creates a false industry for bean counters, that really adds no value to our economy.

Here is the link to the various tax rates in Canada. The easiest way to see the qualitative behaviour is to notice that Alberta is flat 10% of income while other provinces are less (some are more). Ontario is one of the most competitive with a rate under 10% right up to about $77k. If you work out the effective tax rate it is well below this. When I remember doing the calculation I remember $150K being where they were equal. The worksheet is on my other computer and I won't be back to Berlin for a couple of weeks, if you are generally interested PM me, we can exchange email's and I can give you the exact calculations.

About the complication factor, I definitely agree with that one.

 

[Machjo]

Many posters here seem to be taken with the idea of flat tax. It is regarded strictly as a fringe idea, by both liberals and conservatives, and rightly so.

The flat tax has to be revenue neutral, otherwise it is not a tax reform, but a tax cut. If we have a flat tax rate, obviously it will lower the taxes on the rich. The poor of course, pay no tax, so it doesn’t’ affect them. To compensate for the lower tax on the rich, the taxes on the middle class would have to go up. Middle classes will have to pay more so that the rich pay less.

Any politicians who suggests lowering taxes on the rich and increasing them on the middle classes will be committing political suicide. So it is strictly a fringe idea, I don’t see it happening. The issue has been talked about in USA for decades now, without getting any traction. And for very good reason.

I can see your point there, and here's my take on it. Since many people use the term flat-tax in many ways, I'll define my terms more clearly here to ensure we all understand each other. I was using flat-tax in the sense of a proportional tax, based on a flat percentage. In that respect, certainly a person with a higher income would pay more than a person with a lower income, in terms of real money, though percentage-wise they'd pay the same.

What we have now is a progressive tax, meaning that the higher your income, the more you pay percentage-wise. The problem I see with that is that it doesn't account for needed expenses. Let's suppose that one person with a high income has no family responsibilities, whereas one with a slightly even higher income has a large family. With a progressive income tax, things beconme unnecessarily complicated because the one with the large family still has to pay according to his tax bracket, and then the government re-imburses him based on the number of dependents, health issues, etc. etc. etc.... that calls for a huge bureaucracy. Or alternatively, He has to do all kinds of calculations to figure out his deductions.

Instead, if the goal is to give more responsbility to the rich, how about a separate tax on non-essential accumulated wealth on top of a low proportional income tax. This would mean that while everyone pays the same income tax percentage wise, we'd also have to pay a tax on non-essential accumulated wealth. Clearly the man with four ill kids will have many expenses, thus making it more difficult for him to become wealthy in the first place. And even the wealth he has accumulated is likely to be all essential, beds for kids, etc. In this way, he'd naturally be paying a low wealth tax anyway.

The one with few responsibilities, on the other hand, would naturally have a chance to accumulate wealth, and so would natrually pay more. This would be less bureaucratic by simply having two flat taxes, one on income, the other on accumulated wealth, rather than a whole series of income brackets for everyone depending on so many various criteria.

 

[Curiosity]

Niflmir

Now you made sense for me - I understand 'flat' isn't the correct description.

I think what I am aiming for is to take the guesswork out of taxation so that it can be planned out during years of meager earning and years of fruitful income - so we can balance our own lives instead of having this suicide mission every spring.

It makes sense that the more you earn the more you pay in taxation - I understand that. I am self-employed however and all the 'perks' become nightmares for me in keeping records of worth, so I give up and pay a professional to keep me honest.

Even if mistakes are made in my submission I would have no idea - I just sign the papers and file them...

It turns people into kamikazi pilots for a couple of months each year - we have no idea what we have done - and as far as next year goes - we are no more informed than we were starting the previous year.

Keeping the public in the 'stupid room' without explanation which is easily understood - is bad governance - and always makes me suspicious why government prefer to keep it thus.

And another vicious circle jerk comes to mind - "us vs. them"....

 

[Curiosity]

Machjo - I like what you wrote!

The one with few responsibilities, on the other hand, would naturally have a chance to accumulate wealth, and so would natrually pay more. This would be less bureaucratic by simply having two flat taxes, one on income, the other on accumulated wealth, rather than a whole series of income brackets for everyone depending on so many various criteria.

I had another thought - some of the capital gain could be offset by charitable giving too, thus decreasing the taxable income. It's a win/win!

 

[Machjo]

Another problem with a progressive tax system, as opposed to a combination of a proportional income tax and a proportional non-essential-wealth tax, is that a progressive tax has randomely decided tax brackets, which isn't fair for a person who just makes it into a tax bracket, meaning he might keep less money in the end with a person with just a slightly lower salary. The alternative above eliminates this random division of brackets.

 

[Machjo]

Machjo - I like what you wrote!



I had another thought - some of the capital gain could be offset by charitable giving too, thus decreasing the taxable income. It's a win/win!

Sorry, I made a mistake. I should have said 'non-essential accumulated wealth'. And I fully agree that all direct taxes should be charity deductible. Maybe the income tax could be a low tax (let's say 2 to 3 percent)that's earmarked to help the poor, totally deductible from charitable contributions earmarked for the poor. A separate education income tax, totally deductible from any monetary donation to a school.

And the accumulated non-essential wealth tax could be totally tax deductible from any charitable donation.

Any other tax is a resource tax, non-deductible.

 

[Machjo]

I wouldn't be against a cap on accumulated non-essential wealth too, as long as it's placed at an extremely high ceiling.

 

[Curiosity]

Machjo - holy cow

I almost understood all of what you posted! Thanks! Gotta keep reading it til I get it.

 

[captain morgan]

We are talking about switching from a progressive tax system to a flat tax system, so the comparison of rates makes sense and the comparison of services makes little. All that matters is absolute values of dollars.

Presuming that the collection of taxes are employed to provide services to the rate payer, I'd suggest that the per capita payments are entirely relative to the actual services provided/made available specific to those dollars... Think of it this way, you wouldn't buy a car for an amount of money that may purchase you 2 cars across the street. That said, the 'absolute value of dollars' is relative to what that money is providing to the rate payer(s).

Difference between bracket 1 and bracket 2 in the federal system is 7% difference on up to $38,832, which is a difference of up to $2718.24, an order of magnitude above what you suggest. Do your homework.

To start, you don't pay taxes if you don't break a certain threshold.


Secondly, part of the homework entails that the analysis incorporate all applicable components. The federal system is only one component of the entire system. The provincial component is the other half. If you analyse the differences between provinces relative to the combined fed/prov income tax, you'll see that while the fed rate is equal across all jurisdictions, the incremental and progressive increase in a province like Manitoba (which is not the highest) compared to Alberta.

According to the CRA: What are the income tax rates in Canada?

Manitoba 10.8% on the first $31,000 of taxable income, +
12.75% on the next $36,000, +
17.4% on the amount over $67,000

Alberta 10% of taxable income


The contention that only those (in Alberta) that benefit from qa flat tax were/are those making in excess of 150,000 was incorrect.

Equal in dollar is not equal in value, which was your first point. Which you have now flip-flopped on. While one can say "All other things being equal," for an individual with a specific income comparing tax systems (because we are talking about changing systems, so everything else would in fact be equal), one cannot say this for two individuals with markedly different incomes. For these two individuals many things are different and the value of a dollar is genuinely different. There is a similar thing with fines, if everyone pays $200 for a speeding ticket, someone making millions a year hardly learns a lesson. Equal is not the same as fair.

There is no flip-flopping on anything here. The reality is that value and worth are entirely subjective elements. the idea that we establish a base-line (ie all things being equal) is necessary in order for anyone to make a statement relative to fairness, equity, effectiveness, bigger, smaller etc.

Progressive taxes are fairer. Period.

Part of your statement seeks to measure the personal and subjective valuation of 'a dollar' and employ that as some form of justification as to the fairness of a progressive system. Your stemenent above is skewed relative to your opinion. In the end, the fairness issue is interpreted en mass through the marketplace.

 

[ironsides]

Learning local dialects have nothing to do with having one language your country speaks officially or at international functions. A country should have one language for official use. The Cree, Navajo. Apache etc. can use their native languages, but when they leave the reservations they better know something else for their own sake. There is no reason for any tax payer to pay for someone to learn a local dialect, or another language except for elective courses taught in schools.

The problem seems to be that, you (everyone) is trying to be too specific about what or how the goverment exerts control. Ease up a little, life is not all about control.

 

[Cliffy]

I like my friend's idea, that political positions should be given to the people who least want it.

 

[SirJosephPorter]

I was using flat-tax in the sense of a proportional tax, based on a flat percentage. In that respect, certainly a person with a higher income would pay more than a person with a lower income, in terms of real money, though percentage-wise they'd pay the same.

That doesn’t solve the problem, Machjo. Let us say a rich person paid 33% of his income in taxes last year, a middle class person paid 20%. With your system, the flat tax will have to be set somewhere between 20% and 33%. That still means a tax cut for the rich and a tax increase for the middle class (though in terms of real money the rich person would pay more).

It still represents tax cut for the wealthy and tax increase for the middle class, and won’t fly.

 

[SirJosephPorter]

Instead, if the goal is to give more responsibility to the rich, how about a separate tax on non-essential accumulated wealth on top of a low proportional income tax. This would mean that while everyone pays the same income tax percentage wise, we'd also have to pay a tax on non-essential accumulated wealth.

Machjo, now here you are opening up a whole new can of worms. Incidentally, did you know that the wealth tax is a Sharia, an Islamic concept? In Christianity they have tithe (10% of the income). In Islam, there is no tithe, but there is a wealth tax (I think you are supposed to pay 2½ % of your wealth every year to the mosque).

So first, it will be considered the slippery slope towards introduction of Sharia (those opposed to the tax will be sure to point it out again and again), and is a non starter. Second, the rich will simply transfer the wealth abroad, to tax havens where there is little taxation. I know I would. Government would be lucky to collect taxes on half the non essential wealth.

 

[SirJosephPorter]

I like my friend's idea, that political positions should be given to the people who least want it.

But why would they take them, Cliffy? Take up a job that you don’t want, don’t like at a fraction of what you are making now? Many of these people take a huge cut in earnings when they take up a government position. What incentives would they have to accept a post?

Currently people take jobs in government because they are hungry for power, they are willing to sacrifice in financial terms to achieve power. But if you don’t want power, and don’t’ want to take a cut in earnings, why would you accept a government position?

 

[ironsides]

I like my friend's idea, that political positions should be given to the people who least want it.

At least we would know that they have no ulterior motive, and just might be honest for a while.

 

[Machjo]

Learning local dialects have nothing to do with having one language your country speaks officially or at international functions. A country should have one language for official use. The Cree, Navajo. Apache etc. can use their native languages, but when they leave the reservations they better know something else for their own sake. There is no reason for any tax payer to pay for someone to learn a local dialect, or another language except for elective courses taught in schools.

The problem seems to be that, you (everyone) is trying to be too specific about what or how the goverment exerts control. Ease up a little, life is not all about control.

Having one official language of government administration makes sense. I'm sure no one would disagree with that. The devil's in the details, though. Which lanuage should it be? If we choose English, it's almost a guarantee that Canada would be negotiating agreements with the Republic of Quebec witih a year.

 

[Machjo]

Instead, if the goal is to give more responsibility to the rich, how about a separate tax on non-essential accumulated wealth on top of a low proportional income tax. This would mean that while everyone pays the same income tax percentage wise, we'd also have to pay a tax on non-essential accumulated wealth.

Machjo, now here you are opening up a whole new can of worms. Incidentally, did you know that the wealth tax is a Sharia, an Islamic concept? In Christianity they have tithe (10% of the income). In Islam, there is no tithe, but there is a wealth tax (I think you are supposed to pay 2½ % of your wealth every year to the mosque).

So first, it will be considered the slippery slope towards introduction of Sharia (those opposed to the tax will be sure to point it out again and again), and is a non starter. Second, the rich will simply transfer the wealth abroad, to tax havens where there is little taxation. I know I would. Government would be lucky to collect taxes on half the non essential wealth.

Ican't believe this! First, Levant's book was not worth reading not because of its content but because of who Levant was. Now you're saying that a wealth tax is a bad idea because it's similar to Shari'a. Next you'll be saying that we should destry Canada's highway system because the Nazis had built a good one. And then NATO should scrap those policies of its that were taken from the Soviets, and maybe we should stop using rocket too because those were invented by the Nazis, and what aobut jet propulsion? Nazis too. And what about Algebra? It started with Pagan Greeks and then the evil Muslims developed it further. So I guess we'd better stop learning algebra too. Oh, yes, and the abacus. You know, kids still use those in primary school as a fun way to learn basic maths. But that was developed by the Chinese and look at them now, so I guess it's time to scrap the abacus too?

Please, judge an idea on its own merits and not on its source! By the way, Zakat is not based on wealth, but on 1/40 of income. So you didn't even have your facts straight to begin with. I can forgive that, since I don't always have my facts straight either, but for crying out loud, even if you had been right, what would it have mattered that a good idea should have come from Shari'a?

 

[Machjo]

I like my friend's idea, that political positions should be given to the people who least want it.

Actually, such a system does exist in some organizations. It's called open ballot. Each eligible voter is a candidate, essentially making him a voter-candidate. The ballot is blank, and you right the name of the voter-candidate of your choice. Whoever wins is expected to accept the position unless he has a good reason to refuse it, similar in concept to jury duty, as a responsibility to society. With modern technology, it could be done.

 

[ironsides]

Having one official language of government administration makes sense. I'm sure no one would disagree with that. The devil's in the details, though. Which lanuage should it be? If we choose English, it's almost a guarantee that Canada would be negotiating agreements with the Republic of Quebec witih a year.

It is a shame that they were allowed to get that much power, I know they were granted a lot of lea way in the your Charter. I also know that some made fun of the Gov. of Texas suggesting secession, but there are a lot of things to consider it that was serious. Is Quebec capable of becoming a independent country, by that I mean natural resources, economic means etc. to be self sufficient. Off hand, without knowing how they plan to do it, I would think Texas has a better chance of doing it.


I've said this before, but it needs saying again. Is Canada a Nation or a lose network of Provinces.

That subject would make a topic for the citizens to consider.

 

[Machjo]

Sorry SJP, you're right. Zakat is based on wealth, and here are the details:

Zakat - Wikipedia, the free encyclopedia

But again, judge an idea on its own merits and not on its source. Zakat is a damn good idea if you ask me.