Faced with an open challenge from George Bush to sign on to the missile defense shield, Paul “Weeble Wobbles But He Won’t Fall Down” Martin is on the defensive from opposition pounding and concern for maintaining solidarity in the red wing of his minority government. He’s standing firm in his decision to continue to consider.
Last night, at a Liberal fund raiser, Martin countered critics by announcing that Canada does not need the help of the USA to defend herself, thankyou very much , and that we are capable of providing security for our part of North America. The only explanation I have for this outburst of absurdity is medical. I hope someone is talking to him about seeing a doctor – head first.
While Monty Paul’s Flying Circus loses their collective minds over a program that is going ahead with or without our approval – we can only pray that someone in Ottawa is paying attention to the potential of tax reform in the US to go nuclear.
In case you haven’t heard – the world’s largest economy is considering elimination of income, payroll, corporate and estate taxes, and replacing them with an across the board federal sales tax of 23%. The estimated 600 billion currently spent to collect and manage these taxes would be virtually eliminated, along with the need for the IRS. The underground and criminal economy that historically evades income tax would be brought into the revenue stream.
The saving to business by the elimination of corporate taxes should result in a drop in wholesale pricing, making US manufactured goods more competitive. The implications for Canadian manufacturing alone are profound. Without corporate taxation, there would be tremendous incentive for business to remain in, or relocate to, the US.
With the beckoning glow of an income tax free America, there wouldn’t be time to worry about an outright exodus of highly skilled Canadian professionals – we’ll need a national strategy to keep our truck drivers.
A couple of western provinces won’t be far behind.
I’m not a tax expert or an economist, but I think that if you change the method of raising taxes without reducing the size of government expenditure, you will not make your nation wealthier.
If you could, then Mulroney’s GST would have created jobs. But it didn’t. Somehow, despite the elimination of manufacturer’s tax, “the silent killer of jobs”, we managed to lose hundreds of thousands of manufacturing jobs.
Bush is an insane socialist. There is no other possible conclusion that you could reach, when you witness the size of the US deficit and the sheer number and size of the programs into which he has poured (borrowed) money. Every one of those spending programs has created a new class of dependents, who will now use their power to preserve their entitlement indefinitely.
Given the gi-normous debts that the US is running up, I have a feeling that he will end up implementing a sales tax, without reducing other forms of taxation by any significant degree. The ongoing terrorism crisis, plus a debt crisis, will provide all of the political cover that he needs to get this done.
When I lived in Hong Kong (pre-handover) everybody richest to poorest paid a flat tax of 13 percent. No exceptions, no deductions, no loopholes.
Result was healthcare, education and road/sewer/water/electricity etc were excellent.
The numbers of people employed for revenue-collection didn’t change, were simply re-assigned to more fulfilling jobs. 13 percent seemed far more than adequate to meet all social and govt needs.
Biggest concern was that we were about to hand over billions of unused tax-savings to the Mainland Chinese.
Point is, have lived in one of the few modern-times places on the planet with a flat-tax, and witnessed first-hand it’s positive effect.
Lends an entire new mindest when the boss asks you to work overtime – you now get time and a half but also still only pay 13 percent tax, all the while knowing it generates huge extra income for your govt.
I keep hoping more progressive western (led) countries will try it. Or we’ll all be as over-taxed as Norway with nothing to show for it.
The irony is that Canada is better placed than the US to try something like this because our federal budget is in surplus and we already have a national sales tax in place.