How to talk about increasing government revenue?

George Victor wrote:

The progressive party has to convince a hungry electorate that the conservatives lie through their teeth.

I remember when Mondale was running against Reagan and Mondale (refreshingly) said that he was going to raise taxes (and that Reagan would too, but that Reagan wouldn't tell you he was going to do it).  The reward for Mondale's honesty?  Crushing electoral defeat.

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California's Proposition 13 (1978) was the leading edge of the trainwreck.  Looks good on the lying conservative bastards.

But how about exposing the conservative forces that have played the "taxpayers and consumers" like a banjo ever since Ronnie's time?

Or would that tend to expose the ignorance of the Great Led?

And you offer up these elements as capable of making laws for the benefit of humankind far into the 21st Century?  In the name of some kind of democratic  freedom?

Should we not, like Bill Moyers, expose them as the Children of Barnum and Bailey? The Lumbaughs can function only as long as there are people ignorant and sick enough to take them seriously.

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the issue is 'what kind of taxes'?

taxes are taken by society to create society, we are society,

if all resources are owned by society then we can tax it, we all operate/live in this environment, we can only operate in this environment, we all benifit from it so we all pay for it, it stems from the history,

we should tax those that have the money, we tax the operations of the society, we should tax the corporations that we all support as we guarantee them by definition, they take advantage of the society that has been created thus far,

we have no money today as we have reduced taxing where the money is since the time of trudeau,

lets be honest and say that corporate taxes have come down but regressive taxes on individuals have gone up,

i suggest we dramatically reduce the taxes on individuals and raise it more than that on the corporate structure, then we would invest, buy, etc. and the corporate structure would grow,

'it would not work in a globalised economy' you say, i suggest it would 'work' as well as what we have now.

I think Sven has described the problem very well. If you ask voters whether they want to pay more tax, most will say no. If you ask them whether they'd like to cut services, most will say "hell, no!". What California has pioneered (if that's the word) is the technique of having an entity that is constitutionally bound to balance the budget ask the questions separately, with the resulting obvious trainwreck.

The Canadian experience starting with Trudeau and continuing with Mulroney shows, on the other hand, that if debt is an option then politicians can separate the questions quite successfully for say 25 years before the accumulated debt becomes an obvious problem.

And printing money also works to end speculation on the currency. Kind of important in a country with a "petro-dollar' value created in Alberta and causing the demise of eastern industrial export.

Sean in Ottawa wrote:

Uncle John wrote:

You can also devalue the currency to abrogate the debt. It seems to be working well for Obama, and it worked well for Canada.

If you devalue the currency your offshore debt goes up not down-- don't see how this helps.

It can help competition and exports but you need an export market and now there isn't one to exploit.

The feds do have that policy option. Ottawa doesn't have to pander to foreign money speculators and bondholders. The impotence is self-imposed.

Fidel wrote:

Sean in Ottawa wrote:

Uncle John wrote:

You can also devalue the currency to abrogate the debt. It seems to be working well for Obama, and it worked well for Canada.

If you devalue the currency your offshore debt goes up not down-- don't see how this helps.

It can help competition and exports but you need an export market and now there isn't one to exploit.

The feds do have that policy option. Ottawa doesn't have to pander to foreign money speculators and bondholders. The impotence is self-imposed.

 

That you can change that dynamic -- perhaps true in theory, debatable in practice. But this is more complicated than just devalueing your currency.

The fact that as long as your debt is foreign-owned devaluing your currency increases your debt is a simple mathematical fact. Please explain how you think it isn't? You essentially have to repatriate your debt to accomplish this any other way.

Printing extra currency increasing money supply can risk doing the same thing but there is a chance you can get away with it. But straight up devaluation as a policy initiative can have not other effect than increase your foreign debt.

That said this might be affordable if it makes your exports more competative but that does not change the foreign debt math at all.

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The NDP did oppose corporate tax breaks as well they should.  Iggy I'm not sure what his stand is on corporations getting all the breaks while Canadians go without.   Tax breaks to big corporations do not amount to increased employment as the trend in bigger organizations is big profit, fewer taxes and employee reduction as measures to increase profits for investors.

In BC the largest part of employment growth was in small business and not big and this will continue to be the area where most new employment will be created.  And now devastated with the prospect of going under once Harper's hated HST takes place and will cause many to go bankrupt or close their doors.  BC will be the hardest hit with employment loses.

So why are all of Canadians tax dollars going to big corporations when tax payers don't owe them anything but a thanks for nothing and how about cleaning up your mess?  Now cleaning up after big business now thats job creation and only the right thing to do you would think.

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Sean in Ottawa wrote:

If you devalue the currency your offshore debt goes up not down-- don't see how this helps.

I think it would be a problem in a global downturn, a time when unemployment is high and government revenues are less than they would be otherwise. But Jack has said that the Bank of Canada could be put to better uses. I believe he meant at the time that some amount of debt should be financed through the Bank instead of through private banks at a premium.

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It can help competition and exports but you need an export market and now there isn't one to exploit.

Will the US refuse our oil and natural gas? Our massive amounts of hydroelectric power? What else besides energy and raw materials has Canada been world renowned for exporting?

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That you can change that dynamic -- perhaps true in theory, debatable in practice. But this is more complicated than just devalueing your currency.

The fact that as long as your debt is foreign-owned devaluing your currency increases your debt is a simple mathematical fact. Please explain how you think it isn't? You essentially have to repatriate your debt to accomplish this any other way.

The feds could could change dynamic. This same debate took place in the 1990's among Liberal government members. Paul Martin was pressured by advisers like Peter Nicholson who said that federal deficits would soar through the roof unless there were massive spending cuts. Nicholson maintained that his view was based purely on arithmetic and free of either ideology or assumptions. Martin accepted the advice because of that. But Nicholson later recanted and said that what he claimed was true was based partly on a "smuggled-in assumption" - namely that interest rates had to remain the same.

Linda McQuaig goes on to describe how the Liberals were taking advice from people whose advice they preferred to listen to leading up to the terrible federal budget of 1995.

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[Pierre]Fortin's whole point, however, was that the Bank of Canada could lower interest rates, thereby completely changing the arithmetic. Nicholson agreed that Fortin's point is a legitimate one that can be debated, but one that was "never seriously entertained" in the internal discussions that led up to the budget"

Linda McQuaig a few pages before that describes how governments really had no policy autonomy under the world gold standard, a time when governments had no choice but to favour the interests of international capital and lower deflationary policies on their populations in order to maintain currency stability. Under the post war Bretton Woods agreement, governments had a new tool, which was use of capital controls. Under the new liberal financial regime, in which capital is fully mobile, governments can still have  policy autonomy, but stability of exchange rates has to be sacrificed. Iow's, we would have to challenge capital in a way in which Britain's Labour government of 1976 decided not to in the face of IMF demands(US and Germany) that Brits submit to austerity measures. The problem with market diktats is that marketeers and capitalists are not always rational. And that was true of 1976 Britain when "investors"(speculators acting with herd-like mentality) began punishing British currency for no apparent reason other than the fact they probably didnt like the Labour government and welfare state socialism.

The Cons and Libs are not talking about "increasing gov't revenue", but just balancing books.Flaherty said the Cons would cut future growth in program spending. As the Globe reported, he said "the Tories wouldn't balancde the budget by cutting transfers to individuals or provinces. The former Chretien government slashed payments to privinces in the 1990s to eliminate the deficit.

"Liberal finance critic John McCallum brushed off Mr. Flaherty's accusations, saying his party would not raise taxes or cut transfers to balance the budget. He noted that the Tories aren't keeping all levies steady, point out they will be hiking Employment Insurance premiums in the years ahead."

They accuse each other of haing no "credible" plan to end the deficit.  And looking at their promises, one can understand that. But the REAL final solution will come after the election, of course.

And so it goes.

Finance capital "got us into it", TP. The folks who move our investments around for us. We ae letting them take us back into it because we don't understand the  ways of creating safer investment alternatives. "They" are given the job. 

And, unfortunately, deciding "value" in a largely service economy, in some Marxian sense, ain't on.

You again fail to mention "petrodollar", Sean. THAT is the central factor in Canada having not one, but TWO economies. That is recognized as THE Canadian dilemma in trying to balance the exchange rate...we were the first to float the dollar and were applauded for it as piioneers.  And that is what screwed us with a Conservative administration at the alter of non-regulated markets.

The media are sort of too embarrassed to mention this divisive little bomb, but we have yacked about it in the past, hereabouts. Always brought derisive catcalls from the West.

George Victor wrote:

You again fail to mention "petrodollar", Sean. THAT is the central factor in Canada having not one, but TWO economies. That is recognized as THE Canadian dilemma in trying to balance the exchange rate...we were the first to float the dollar and were applauded for it as piioneers.  And that is what screwed us with a Conservative administration at the alter of non-regulated markets.

The media are sort of too embarrassed to mention this divisive little bomb, but we have yacked about it in the past, hereabouts. Always brought derisive catcalls from the West.

I did not "fail to mention it" -- it was not relevant to my response. I agree it is a significant issue in relation to the value of our currency but not relevant to the issue of any benefit in devaluing our currency with respect to the deficit or debt.That was the narrow question I was answering.

In some respects the petro-dollar angle is a benefit since it might well be the one aspect of our currency value that will allow our interest rates to be lower than they otherwise might be as our economy struggles. On the other hand it is pushing up the value of the dollar hurting exports but as I said there is little export market to exploit presently since what we are selling now is not subject to currency shifts-- if the economy is doing better and there is demand for oil we will sell it regardless of the value of our currency. the big problem with the petro dollar issue is not now but if there is a global recovery that could create demand for our other exports but instead raise the price of oil pushing the dollar so much that our export market does not recover. While serious, this issue is unrelated to the answer I gave which stood on its own.

The Bank of Canada has been threatening to print money, suppressing speculation, for about a month now.  A loon equal to the greenback means no recovery of the economy. I think the tug of war within the country regarding the rate of exchange is germaine. And I  don't understand your "there is little export market to exploit " now. There is a helluva lot to be recovered, including in the car industry.

Spot on, Fidel.

Slap green taxes on Canada's massive fossil fuel exports to the states. Raise per barrel oil royalties to Norwegian levels, or even Alaskan levels.

Slap massive taxes on our massive hydroelectricity exports to the US. And if they refuse to pay, then use the massive surplus power to electrify our own economy, and cancel Ontario's massive diversion of public funds into more bottomless nuclear money pits.

Buy Canadian not American.

Raise taxes on those most able to pay them.

Cancel Harper's half a trillion dollar US-style military expansion program

Create public sector jobs on a massive scale, and invest massively in Canadian R&D to Swedish levels ~ 4% of GDP.

We could make countries like China appear to be running backwards with green and bustling economies of the future. Canada's potential to become a world leader in green economies of the future is simply massive.

It's more than the end of a business cycle. The western world financial system is irreparably bankrupt. I think the situation now is comparable to that of 1929-32. There are leaders around the world saying there needs to be a new Bretton Woods financial agreement between countries, because there are many hundreds of billions of dollars worth of what amount to junk paper iou's floating around the world, and banks and investment houses can't pay them. The new liberal financial system needs to be put through bankruptcy proceedings. It's finished.

Canadian William Krehm reminds us of the Bank of Canada's potential to create money as it was between the years 1938 and 1974. Unlike the US Federal Reserve, which was privatized sometime after turn of the last century, Canada's Bank is still nationalised. Mulroney's conservatives screwed up with doing his part for the half-baked neoliberalisation when they rammed a bill through Parliament ending the bank's role for creating non-interest bearing money and without any debate in 1991. 

This is a promising start.  Almost been tabu for the last generation, but what we're facing now could be seen as taxation crisis as much as anything.

Has anyone ever challenged our governments in court on taking money out of worker paid programs that are supposed to be there for the protection of workers?   If that was ever upheld in court it could even be used to defend pension funds under threat from corporate raiders, as a matter of broader principles.

Lard Tunderin Jeezus wrote:

Uncle John wrote:

Government revenues are not necessarily maximized by increasing tax rates, and they are not necessarily minimized by reducing tax rates.

Not necessarily; but certainly generally these things are true - and so generally your premise is false.

I think it's incorrect to say that increasing tax rates will "generally" result in lower tax revenues or to say increasing taxes will "generally" result in higher tax revenues.

Instead, I suspect that there is a tipping-point tax rate above which tax revenues would decrease because the incentives would become negative.  In other words, there is likely a range of tax rates (0% to ???%) over which tax revenues would "generally" increase as tax rates increase and an upper range of tax rates (???% to 100%) over which tax revenues would "generally" decrease as tax rates increase.

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Lard Tunderin Jeezus wrote:

I'd say that's still mostly bullshit, actually.

So, are you saying that if a government were to raise the average tax rate from, say, 40% to 100% (or to 99% or to 98% or...) that tax revenues would increase?

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[b]Eleutherophobics of the World...Unite!!![/b]