Taxes are Essential but Justin's Race To The Bottom is a Rip-Off for 99% of Canadians!

Taxes can also build stadiums and arenas for the NFL, MLB, NBA, NHL, pro-soccer, etc....

Mr. Magoo wrote:

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So, what’s not to like about taxes?

I think, for most people:

1.  the amount of them.

2.  what they're applied to, and what they're not.

3.  what they're spent on, and what they're not.

I'll ad to the list!!

4. Who pays taxes 

5.How much is paid and why you have to pay that amount and or how much can you pay or is reasonable

JKR wrote:

Taxes can also build stadiums and arenas for the NFL, MLB, NBA, NHL, pro-soccer, etc....

The problem is not that these have investments but that these investments are not businesslike and being made at a loss. If taxpayers can build a building and have a lease that will show profit while attracting a team then there is nothign wrong with that. The problem is the team expects the public to donate that.

You really need to research currency creation and the law suit currently underway against the BoC to return currency creation to the people. If you had a better handle on the concept you'd realize how little taxes would matter/how they would be mostly unnecessary once we could create our own currency, interest free.

This notion that taxes fund our social programs is simply not as true as many would think. The overwhelming majority of our taxes goes to paying off interest on our ever ballooning national debt...to private, for profit bankers.

Borrowing money into existence at compounding interest has turned us all into debt slaves. That's how we've come to live in "debt-based economies". If there was no debt there would be no money under this system. Think about that.

First link I found about the BoC lawsuit. If you're not familiar with this landmark suit you really have to ask why media doesn't seem to care about a concept that, if expanded around the globe, would change the world.

http://www.collective-evolution.com/2015/02/05/canadians-sued-the-bank-o...

The initial federal court filing took place on December 12th, 2011 by  Canadian constitutional lawyer, Rocco Galati, on behalf of Canadians William Krehm, Ann Emmett, and COMER (Committee for Monetary and Economic Reform). The filing is intended to “restore the use of the Bank of Canada to its original purpose, by exercising its public statutory duty and responsibility. That purpose includes making interest free loans to the municipal/provincial/federal governments for “human capital” expenditures (education health, other social services) and / or infrastructure expenditures.”

Rev Pesky wrote:

I have a feeling this might be a mistake, but what the hell...

swansong, you do realize the every dollar created, regardless of how it's created, owes it's holder a debt of one dollar. The only way to have 'debt-free' money is to have money that can't buy anything. As soon as a dollar goes into the marketplace and finds something to trade itself for, it is asking someone to do some real work, to create some real value.

To put it another way, if the government can indeed just create lots of money, is there any limits to the amount they can create? If not, why not create several trillions of dollars, and hand it out. No one would have to work anymore. We could all go out and spend like drunken sailors.

Or perhaps there is a limiting factor. If so, what is it?

I love when a response begins with a thinly veiled insult. Provides me with so much hope for a rational discussion. Regardless...I'll answer your question with a question. What stops banks from doing it?

If you had read my comments and knew your Canadian history you would know that the government increased the currency supply when necessary by spending it into existence through infrastructure projects. That means putting people to work constructing that infrastructure. They didn't just "hand it out".

You worry about inflation but aren't aware of the amount of loss of buying power of a dollar over the last 40 years?

By the way...your characterization that even interest free loans/currency creation come with debt is either very misleading, exceedingly ignorant or downright dishonest. A dollar bill is a place holder for value. That's not the same as "debt". The money created through borrowing has actual debt attached in the form of compounding interest. Hopefully you can recognize the difference.

At least if a gov did begin overspending you would have the opportunity to vote them out and replace them with someone more fiscally responsible. What options do you have with major banks that butcher the economy and raise inflation? I think we know the answer to that.

After all...you can't seriously be suggesting that having private enterprise create our currency at compounding interest...literally lending us that which is already ours...is a better option than actually following the law and creating currency interest free by the will of the Minister of Finance through the BoC...can you?

[quote]After 1976 money began...and continues to be...borrowed into existence at compounding interest through private banks and the lion's share of the taxes you love now go to paying down the interest on our debt to private, for profit bankers.[/qoute]

Are you actually asserting that these banks can PRINT money the way the government can?  Or else how can the government borrow money from a bank that it doesn't actually have?  And for that matter, if all the banks have to do is say "here's a trillion imaginary dollars", what's keeping banks from just lending a quadrillion dollars and waiting for the repayment, with interest?

Wowzers.  How many schoolbooks and bandages and stop signs could we buy if they'd only lend us that quadrillion?

..1931, i believe, was when the bank of canada was formed in response to the introduction of us fed reserve. via this bank canadian governments lent money to each other using pension plans etc. it financed world war 2 as well as the the onset of our medical plans are 2 examples. it wasn't just about printing money but having control of our finances and other sovereignty issues.

epaulo13 said:

...via this bank canadian governments lent money to each other using pension plans etc. it financed world war 2 as well as the the onset of our medical plans are 2 examples.

​The government of Canada financed WW2 by borrowing via war bonds. They still borrow from citizens by selling Canada Savings Bonds.

In a world of floating currencies, no country has complete control over their money. On the other hand, it's almost impossible to operate in the world economy without a floating dollar. I mean, you can peg your dollar whereever you like; others may not agree with you.

To put it another way, a country can have complete control over it's own currency if it chooses to conduct business only within it's own borders. As soon as you start cross-border trading, the person on the other end of your trade will have a say in what your money's worth.

Nowadays governments choose to control their money by manipulating interest rates. That too has it's limitations, but the government sets the interest rates, not the banks.

The BoC was first established in 1934 and then reincorporated in 1938. All of its shares are held by the Finance Minister in right of the crown. It regulates the money supply and has a mandate to control inflation. Before that, Canadian banknotes were issued by the Bank of Montreal.

1934 indicates that the Bank of Canada Act was passed as part of a response to the Great Depression.

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According to Wikopedia he printed 200,000 x 500 Escudos banknotes, doubling the number in circulation.  As he laundered these notes, the Portuguese economy boomed.  Unfortunately when the fraud was discovered the economy tanked.  The government had to take all the 500 Escudos notes out of circulation.

I do have to wonder whether, had he not been found out, whether this uptick in the economy would have been sustained.

Typically, a flood of new banknotes into an economy results in inflation.  Basically, if there's twice as many banknotes in circulation, but the same amount of "stuff" to be bought with it then the stuff will eventually double in price.

Sorry if that's a spoiler to Rev Pesky's question in #19, but I doubt swansong was planning to answer it anyway.

Mr. Magoo said:

Sorry if that's a spoiler to Rev Pesky's question in #19, but I doubt swansong was planning to answer it anyway.

​Which is why I said in the beginning I wasn't sure whether I wanted to get into it. I used to have a friend, who was a very nice person, lefty, active and so forth, but for some reason he got into this free money thing. We had many long discussions about it, and that was the question I always asked him. That is, if there is a limiting factor to this free money, what is it? He would do his best to avoid answering.

​One of the parts of the free money brigade argument is that they always tie this money to societal infrastructure spending. It's always hospitals, schools, daycare centers, etc. I suppose they do so because most people are more or less in favour of that sort of spending. The fall back argument when they run into rough seas is always, 'Don't you want more schools, hospitals, etc.' How could one say no to that.

​What never occurs to them is that once that dollar is in the economy, it goes where ever someone wants it to go. The construction worker who gets paid for building the school takes his money and goes on vacation to the Bahamas. The government who issued the currency now owes the Bahamas that amount of goods or services or other currency. There's no way around that unless you lock that money inside the country.

Bible Bill actually managed to hand out a bit of money with some Alberta certificates which could be used at local businesses, but it never progressed beyond a very limited stage.

Just a note on the value of money in re: the Portugal currency scam. Most economies have a level of slack in them, so at least temporarily, and increase in the money supply will show a benefit. But something else happens as well. The value of the currency drops. That is true of any 'free money' scheme. It's a bit like Crazy Coyote when he runs off the edge of the cliff. It takes a while before he realizes he's not standing on anything.

A country can also raise, or lower, the value of their currency by raising or lowering the interest rate. In fact, nowadays one of the prime methods of currency manipulation is via the interest rate. 

It's also important to distinguish between price inflation and wage inflation. The former tends to outstrip the latter, because in today's Canadian society, high wages aren't the primary driver of price increases. Interest rates have been low for a while, yet Canada hasn't seen the skyrocketing inflation that most economists predict, because if (for example) you live in Toronto and your mortgage is 60% of your income, you don't have a lot left over to go spend on a new BlackBerry.

If, in a print-free-money situation, wages and prices inflate at approximately the same rate, what's the effect on the economy? It hurts the wealthy, who park their funds in stocks and property. It drives down the value of the Canadian dollar, making imports more expensive (so Canadians are more likely to buy Canadian-produced products) and exports cheaper (so Americans are also more likely to buy Canadian products). It helps those in (CAD-denominated) debt, both individuals and governments, by reducing the value of that debt. It makes Canadians less likely to save and more likely to spend, which heats up the economy. A certain level of inflation is not, in and of itself, a catastrophe to be avoided at all costs.

It can, of course, be overdone (Zimbabwe, Hungary, and Venezuela come to mind), but that doesn't mean it's an illegitimate tool. And to bring it back around to the subject of this thread, if you're a government looking for political symbolism, and the people who were making $30,000 five years ago are now making $100,000 due purely to inflation, you can redefine the brackets to meet inflation and "keep cutting taxes on the middle class".

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This keeps prices and wages low, as we are all competing for a reducing supply of dollars.

Is it your experience that the price of things has been decreasing?

I'm just curious... which things??

Broadbent, in his article makes it clear he is talking about the top 1% of income earners.

He should be talking about the top 1% of wealth owners. 

Yeah, it's not criminal to do what the law allows you to do. There should be a debate about what the law allows, with the idea of perhaps changing it so it doesn't allow so much, but that's different than implying that those who use the existing laws are somehow criminal.

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I agree that the law should be changed, but outside of a university debate club, I don't agree that there's no difference between offshore money laundering and claiming a deduction or two.

Isn't "money laundering" basically a criminal term?  Which is kind of my point.  If that fellow with his private jet is breaking the law then have at him.

I'm only suggesting that there's a difference between not paying taxes by breaking the law, and not paying (as much in) taxes while obeying the law.  I would hope we could be mindful of that distinction, is all.

I read the article -- I think the same one. I don't see the point of some of the comments here.

Broadbent mentions both wealth and income. I do not see the issue.

He mentions avoidance and evasion. There is no indication that he does not see the difference or that he accuses those who participate in avoidance as being criminal.

He does say that this "undermines democracy: it starves social programs and public services, increases after tax income and wealth inequality, and further concentrates economic resources in the hands of a few." This is not becuase it is illegal and he includes both legal means and illegal means as contributing. Nowhere does he say that the issue is either all enforcement or all changing tax law.

The comparison of individual claims for transit fare credits are spurious -- you need to read context. He starts with: "tax system that continues to allow the top 1 per cent to avoid paying anything like their fair share."

He is not claiming that credits used by other than the rich are  a problem nor is he claiming that all credits used by the rich are a problem. He is say avoidance (credits) that are used by the rich are. (Like saying people do something does not mean ALL people but that this is something that people do.)

He does refer to offshore cheats -- and that they are. It is not legal to stash money overseas and not report it.

He does speak to tax loopholes and does not "conflate" them. Rather he says they are part of the same problem: the result of both leads to unfairness and inequity, starving programs. He is right. And they should be seen in the aggregate -- seeing them that way is not a confusion.

I do not understand your criticisms as they seem quite unfair given that this is a short piece that simply lays out the problem of these two issues moving together. It is important to see them in the same light since wealthy people already have loopholes designed for them -- and then on top of that extra nice treatment (policies created for and by wealthy people) many of them then cheat the system that is already titled in their favour.

It is important to see this especially in the light of the tax policy of the Liberal we-want-to-help-the-rich-while-talking-about-the-middle Party.

Broadbent's point is very simple that the combination of legal loopholes AND tax cheating abetted by a government that shows no interest in reignin that in, is screwing everyone else. These are two sides of the same coin becuase the policies are created by government and are political. And the tolerance of the illegal cheating is also a policy that is political. Broadbent correctly points out that all countries do not turn the same relatively blind eye Canada does. To make matters worse, while avoiding the significant cheaters, the CRA has a history of investing greatly in finding the smaller cheats and errors through increased audits on more ordinary and less elite Canadians.

Personally, my criticism of Broadbent's articel would be that he could have gone further in terms of the data and evidence as well as the resulting statistics. That is different from attacking what points he does make effectively here.

Rev Pesky wrote:

From the Broadbent article, as posted by Sean in Ottawa:

He starts with: "tax system that continues to allow the top 1 per cent to avoid paying anything like their fair share."

​This is what I'm talking about. Which '1%' does he mean? The top income earners, or top wealth holders? They are two different groups.

The top one percent is not used politically or culturaaly in a limited way. There is no magical dividing line. It has come to mean the most advantaged economically. It has been used for both income and wealth. And the concept of the 1% is that the top 1% in income have the majority of income and the top 1% in wealth have the majority of wealth. It is true that the of the 1% in each overlap. It is also true, particularly in Broadbent's context that the definitions of each are impossible to see. Income is not accounted for due to loopholes and wealth is not accounted for due to offshore hidden accounts. There is no need to define specifically each because they cannot be -- and that is government policy.

Broadbent did not need to define it specifically as he was talking about both.

And it is not uncommon that people rank by either one -- or both as this article does:

https://www.investopedia.com/articles/personal-finance/050615/are-you-to...

I chose that article to not that the 1% Broadbent was speaking about is a term used in many contexts. I the above case it is global but we use the term in a Canadian context and we hear of it in global and US contexts.

When we hear of the 1% we are not talking of math. We are talking about the very most well off in whatever context by income, by wealth and by geography. In all cases Broadbent's use of the term is understandable, acceptable , supportive of his argument, and definitely common language. It does not suggest that he does not understand how the term is used in context or that participants vary depending on the definition.

The highway code doesn't say "100kph, except for Bugattis registered in Monaco, which have no limit". If it did, and if those cars became enormously popular among those who could afford to buy their way into that exception, and if a majority of crashes were caused by those exempt cars, a fair comparison could be made. As it is, the most common American tool of speed limit evasion, radar detectors, are already illegal in most provinces.

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it is wrong to allow and build loopholes that are unfair and it is wrong to fail to enforce the tax regime as it stands.You someonehow think it is wrong to recognize that out of fear of offending people who have these legal tax loopholes.

I don't think it's wrong at all.  Let's change those laws.

But until we do, I'm not that interested in hearing about how someone who is obeying those laws "isn't paying his fair share" or is "cheating" or whatever.

If the problem is the laws, there should be no problem leaving individuals who are obeying the existing laws out of it.

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it would be like not being able to say speeding kills becuase it might offend speeders speeding legally due to high limits.

We generally use the term "speeding" to refer to people driving OVER the speed limit.  If that's true then there's no such thing as "speeding legally", anymore than "embezzling legally" or whatever.  That's actually kind of my point.  If you're driving the legal speed limit you're not "speeding".