Posts in Budget
Gosh, the public sector's taking a big slice of cake?

In my National Post column that appeared in print today, I draw on a new Fraser Institute study to underline that unless we put firm restraints on it, government will indulge its ever-growing appetite including for pay and perks far larger than those left to us in the private sector. For more on how to restrain government, see our documentary True, Strong and Free on fixing Canada's Constitution.

And that's an argument against it?

The Daily Telegraph reports a warning from Swedish Prime Minister Stefan Loefven that if Britain cuts corporate taxes it will make its discussions with the European Union over a Brexit "more difficult." He insists that his own country will keep taxing heavily and spending (no, sorry, "investing") because "Tax cuts are not the future." Dude, the whole point of the Brexit is that Britain won't have to keep implementing bad policy because European politicians condescendingly tell them to. It's even odd that Loefven believes the EU has leverage to dictate policy to a member whose citizens have voted to leave, let alone that threatening to will make them less determined to get away from such things.

Oh, and while I'm on the subject, the Telegraph also notes (you have to read down a bit in the story) that, as if deliberately seeking further to persuade Britons that the Brexit vote was a good idea, European Commission president Jean-Claude Juncker wants all EU members to open their borders entirely in a gesture of solidarity with the refugees now causing EU members to tighten border controls. Juncker went so far as to say "Borders are the worst invention ever made by politicians" which is a mind-boggling fatuity given the horrors governments have inflicted on people from tax rates over 100% to concentration camps. I know, I know, you're not meant to end every discussion by invoking Hitler. But in this case Juncker's claim invites the retort from Bertrand de Jouvenel that, as Milton Friedman recounts it, "said he had always been an ardent advocate of world government until the day he crossed the border into Switzerland ahead of the pursuing Nazis."

Borders exist to protect people from the excesses of big government, from the petty to the ghastly. And Britain is correct to assert within its own the right to have tax policy that favours private initiative over a smothering state.

Hence the Brexit. Obviously.

 

 

Today you actually get paid

Woot. Today is Tax Freedom Day in Canada. That's right. June 7. That's the day, according to the Fraser Institute, that the average family stops working for the state and starts working for itself. And that was the good news. The bad news is that if governments paid for everything they took, that is, if you count deficits as if they were covered by taxation now instead of later, it still wouldn't be tax freedom day until June 18. (This methodology I believe relies on mean averages for income and taxation.)

You can find the depressing details including a provincial breakdown in their study. But here's a question to ponder as you do so. How can it be that, with Canadians so much wealthier today than they were thirty or sixty years ago, we can possibly need so much more help from government?

Remember, as we get richer, government could keep getting bigger while tax freedom day got earlier. Why isn't it happening? If it's too much to ask that government actually get smaller as our private means, including for charity, get larger, couldn't it at least take a smaller share?

Instead the total tax rate (see p. 9 of the Fraser study) is higher in every province except Alberta and BC today than in 1981. So where does it all end? And why does current political debate take so little notice of the relentless expansion of the state relative to citizens, talking instead about all the wonderful things we could get if only government finally became truly big and busy?

King Justin

In my latest column for the National Post I argue that Trudeau manhandling MPs was not just rudeness to colleagues. It was an assault by the executive branch on the legislature and, therefore, on Canadian citizens, who elect MPs to control the government on their behalf. One more reason we urgently need to fix our Constitution. Please back our documentary project and help us show the way.

A sleeper fiscal issue

Yet another warning in my inbox this morning from the C.D. Howe Institute (full disclosure: my brother runs the place and was co-author of the study) about how the federal government continues systematically and dramatically to understate the unfunded liability in its employee pension plans. It may seem like a sleeper. But one day it will wake up and it won't be pleasant. According to authors William Robson and Alexandre Laurin, the feds admit to roughly a $150 billion shortfall. But the real figure is $269 billion. And, they say, if the difference were added to the national debt (as the admitted amount already is) it would stand at $730 billion not $612 billion.

It goes without saying that you should not try this sort of thing at home. The government would not like it.

It's a Three Fold Total Bad. In the first place, it's deliberately dishonest. C.D. Howe has been warning about it for years and they are not some radical right-wing outfit prone to bungling or torqueing their calculations.

In the second, it's fiscally reckless. Even the move to have federal employees fund their pensions more fully is undermined, that other Robson and Laurin note, because they calculate the amount required according to the understated figure. And all the blather about how debt is small and manageable as a share of GDP is also undermined by such jiggery pokery.

In the third, it's yet another case of people in government cutting themselves a great big generous slice of pie while the rest of us tighten our belts in hard times and, when we look at them sidewise, go "What? What?" as though their cheeks were not bulging. Whatever happens, federal employees will collect generous pensions they have not paid for. Even if the rest of us have to be taxed within an inch of bankruptcy to make it happen.

Then they wonder why government is in disrepute nowadays. All the way to the bank.

Of course, they're counting on us to sleep through the various alarms. But this is no time to hit the snooze button.