National Economy

[Build.It]

Originally Posted by WarrenC12

Yeah, slash everyone's benefits and throw a bunch of the military out of work. They'll have plenty of time to sharpen their guillotines.

What is your solution to pay for all these services (on both sides of the border)? I'd love to hear some of your ideas.

[MolsonExport]

Must you be so argumentative?

[Build.It]

You're right and I've removed the sarcasm from my last post.

[WarrenC12]

Originally Posted by Build.It

What is your solution to pay for all these services (on both sides of the border)? I'd love to hear some of your ideas.

Increase taxes! Start with reversing the Trump cuts. Increase capital gains taxes.

I'll note that Canada's deficit is around 2% of GDP. We could and should make some cuts to spending. I'd like to see OAS clawbacks adjusted, they are far too high. Even at 2%, if our economy grows more than that, the overall deficit/debt picture will continue to improve over time.

US deficit is around 6.5% of GDP. It's more than triple ours. They need some serious adjustments.

[kwoldtimer]

Originally Posted by WarrenC12

Increase taxes! Start with reversing the Trump cuts. Increase capital gains taxes.

I'll note that Canada's deficit is around 2% of GDP. We could and should make some cuts to spending. I'd like to see OAS clawbacks adjusted, they are far too high. Even at 2%, if our economy grows more than that, the overall deficit/debt picture will continue to improve over time.

US deficit is around 6.5% of GDP. It's more than triple ours. They need some serious adjustments.

Although Trump wants to increase debt limits, so don't hold your breath.

[WarrenC12]

Originally Posted by kwoldtimer

Although Trump wants to increase debt limits, so don't hold your breath.

Tell the guy who thinks Trump is the answer. I know he's a lying fraud.

[Loco101]

Originally Posted by Build.It

This is more or less what is required for them to balance their budget again.

US health spending is extremely inefficient compared to other countries for example.

US social security per capita is also significantly more than Canada's for example.

Countries like the US and Canada were established on the foundation of limited government and low taxes - this (among other reasons) was why so many people uprooted their lives to move here. So it's unrealistic think our populations will accept being a high tax high service state like Norway. That leaves us with the only other viable option, which is to cut services.

Of course the there is a third option which nobody wants, and that is perpetual borrowing and inflation.

The US won't be balancing its budget anytime soon. The biggest problem is that wealthier people don't pay their fair share which would go a long way to reducing their deficit. Cutting services there is absolutely an option but there are consequences in doing that as economic growth will be hurt in the short term and some people may fall through the cracks which leads to longer-term problems. My opinion is that cutting taxes has been done at the expense of much higher debt and Trump's plans seem to be only doing more of that.

[Loco101]

Originally Posted by WarrenC12

Increase taxes! Start with reversing the Trump cuts. Increase capital gains taxes.

I'll note that Canada's deficit is around 2% of GDP. We could and should make some cuts to spending. I'd like to see OAS clawbacks adjusted, they are far too high. Even at 2%, if our economy grows more than that, the overall deficit/debt picture will continue to improve over time.

US deficit is around 6.5% of GDP. It's more than triple ours. They need some serious adjustments.

Yet PP supporters here make it sound as though Canada has serious spending problems and that the US is doing much better yet it's actually deficit-fuelled.

[Build.It]

Originally Posted by WarrenC12

Increase taxes! Start with reversing the Trump cuts. Increase capital gains taxes.

I'll note that Canada's deficit is around 2% of GDP. We could and should make some cuts to spending. I'd like to see OAS clawbacks adjusted, they are far too high. Even at 2%, if our economy grows more than that, the overall deficit/debt picture will continue to improve over time.

US deficit is around 6.5% of GDP. It's more than triple ours. They need some serious adjustments.

I'd be okay with paying current tax rates if it was accompanied by cuts in social assistance, social security, corporate welfare, and the money was instead invested into debt repayment, infrastructure and education.

Once the debt has been repaid I would expect taxes to gradually come down as well.

Income tax below $250K should be zero. The government should be able to fund itself from consumption taxes, and 10% on anything above $250K earned. Capital gains tax should be zero. Corporate tax should be 15%.

People shouldn't be punished for being successful and making positive contributions to society. Similarly people shouldn't be trained to believe they will be supported by the government their entire life. We need 90% of citizens to be able to carry their own weight without any government assistance. Forcing them to pay shelve out 50% of their earnings to the government (when you add up income tax, sales tax, property tax, capital gains, etc) makes it more difficult for them to do this so they end becoming dependent on the social programs their taxes are funding.

[YOWetal]

Originally Posted by Build.It

I'd be okay with paying current tax rates if it was accompanied by cuts in social assistance, social security, corporate welfare, and the money was instead invested into debt repayment, infrastructure and education.

Once the debt has been repaid I would expect taxes to gradually come down as well.

Income tax below $250K should be zero. The government should be able to fund itself from consumption taxes, and 10% on anything above $250K earned. Capital gains tax should be zero. Corporate tax should be 15%.

People shouldn't be punished for being successful and making positive contributions to society. Similarly people shouldn't be trained to believe they will be supported by the government their entire life. We need 90% of citizens to be able to carry their own weight without any government assistance. Forcing them to pay shelve out 50% of their earnings to the government (when you add up income tax, sales tax, property tax, capital gains, etc) makes it more difficult for them to do this so they end becoming dependent on the social programs their taxes are funding.

Ignoring your proposal to cut all social assistance and social security (OAS?). would literally kill people and in the social assistance category make a lot of people try and kill you.

As for your tax proposals. These kind of ridiculous "we should" statements are silly. You should be able to build me a 3000 sq dt house for $100,000. Why? Because I say so.

If we only tax income above $250k and only 10% we will lose probably close to $200 Billion a year in tax revenue. There is literally no way to cut that much from the budget. Even if we cut all payments to individuals as you suggest starting with above and all healthcare money we'd still be short.

[Build.It]

You're ignoring that income that goes untaxed would get spent into the economy and would get taxed at consumption. Money velocity would go up as well, so overall tax collection wouldn't be reduced by as much as you'd think. Look up the laffer curve.

Cuts to social security would have to be phased over time.

[YOWetal]

Originally Posted by Build.It

You're ignoring that income that goes untaxed would get spent into the economy and would get taxed at consumption. Money velocity would go up as well, so overall tax collection wouldn't be reduced by as much as you'd think. Look up the laffer curve.

Cuts to social security would have to be phased over time.

Social Security is American. Do you mean OAS? Cuts there are reasonable and needed as it's set to explode but many depend on it to eat.

The Laffer curve is the most misused theory in economics. It means if income tax rates were 80% there would be an increase in revenue. And actually even at those rates it's unproven.

Even with a 20% VAT replacing the GST the revenue drop would be catastrophic. If you can't see that it's honestly hard to have a realistic conversation.

[acottawa]

Originally Posted by Build.It

You're ignoring that income that goes untaxed would get spent into the economy and would get taxed at consumption. Money velocity would go up as well, so overall tax collection wouldn't be reduced by as much as you'd think. Look up the laffer curve.

Cuts to social security would have to be phased over time.

A 20% VAT would decrease consumption and encourage people to put money saved on income tax into assets, which would further worsen the housing crisis. This would slow the velocity of money. People will avoid taxes when they can, which under this plan would mean getting the money out of the economy as quickly as possible.

[kwoldtimer]

Originally Posted by Build.It

I'd be okay with paying current tax rates if it was accompanied by cuts in social assistance, social security, corporate welfare, and the money was instead invested into debt repayment, infrastructure and education.

Once the debt has been repaid I would expect taxes to gradually come down as well.

Income tax below $250K should be zero. The government should be able to fund itself from consumption taxes, and 10% on anything above $250K earned. Capital gains tax should be zero. Corporate tax should be 15%.

People shouldn't be punished for being successful and making positive contributions to society. Similarly people shouldn't be trained to believe they will be supported by the government their entire life. We need 90% of citizens to be able to carry their own weight without any government assistance. Forcing them to pay shelve out 50% of their earnings to the government (when you add up income tax, sales tax, property tax, capital gains, etc) makes it more difficult for them to do this so they end becoming dependent on the social programs their taxes are funding.

Randomly throwing out "should" numbers without indicating revenue impacts seems pointless.

[niwell]

The Laffer Curve is one of those Economics 101 theories that provides an interesting theoretical model, but when you start looking at higher level economics mostly falls apart. And yes, I have looked at it in Real World settings.

While they have a place, consumption based taxes tend to be more inefficient, administratively complex and don't always scale in ways that are easy to predict.

[Nite]

Originally Posted by WarrenC12

Increase taxes! Start with reversing the Trump cuts. Increase capital gains taxes.

I'll note that Canada's deficit is around 2% of GDP. We could and should make some cuts to spending. I'd like to see OAS clawbacks adjusted, they are far too high. Even at 2%, if our economy grows more than that, the overall deficit/debt picture will continue to improve over time.

US deficit is around 6.5% of GDP. It's more than triple ours. They need some serious adjustments.

The current US deficit is around 7.5% of GDP
2.1T deficit with a GDP of 28.1T
5.5% more in deficit spending to GDP than Canada to only generate 1.5% more growth that Canada

[Innsertnamehere]

Originally Posted by WarrenC12

Increase taxes! Start with reversing the Trump cuts. Increase capital gains taxes.

I'll note that Canada's deficit is around 2% of GDP. We could and should make some cuts to spending. I'd like to see OAS clawbacks adjusted, they are far too high. Even at 2%, if our economy grows more than that, the overall deficit/debt picture will continue to improve over time.

US deficit is around 6.5% of GDP. It's more than triple ours. They need some serious adjustments.

Social Security is killing the US far more than OAS is killing Canada. Which is saying something.

The US desperately needs Social Security reform, but it's political suicide to touch it.

[MolsonExport]

consumption taxes are regressive; income taxes are progressive.

The former hurts the less well off, as consumption accounts for a larger share of their net earnings, compared to the better off.

[YOWetal]

Originally Posted by Innsertnamehere

Social Security is killing the US far more than OAS is killing Canada. Which is saying something.

The US desperately needs Social Security reform, but it's political suicide to touch it.

Well Social Security is self funded. If we needed CPP to fund OAS we'd be in trouble also. Without changes OAS bankrupts us as well it just comes from general funds.

[Build.It]

Well something needs to change. We can't just keep running deficits into perpetuity.

I have a suspicion we will be moving away from fiat money in the near future, which would solve the problem (even if it's by force), but not sure what that'll look like.

The good news is that we now have numerous countries trying new drastic measures in all directions (far left, far right) so we can see which models actually work and apply that to Canada. We can let Argentina etc be the guinea pigs and we can just adopt what has been proven to work.