Future Canadian Budget Dangers



Commentary

The Liberal Party’s budget will finally drop on April 19, the first time in two years. April 5, Financial Post Evaluated the case Opposition to capital gains tax on sale of main home, and April 9 Commented by Terence Corcoran Other tax increases seem certain.

The value of a home is constant, and rising prices are a function of the value of losing money. With just 2% low-end inflation required by the Bank of Canada, the value of money is halved every 36 years.

Banks of Canada sow inflation by depositing billions of dollars into government checking accounts and pretending to buy valuable bonds instead, despite the time it takes to germinate. That’s how money printing works today. In the long run, the famous saying of the late Milton Friedman has always been heard. “Inflation is a financial phenomenon anytime, anywhere.”

To correct the excess caused by COVID, the tax increase may not justify the ship. Transfer income tax on homes can also reduce the supply of existing homes on the market, thereby raising prices even further. Why sell your home or stock and pay a profit tax, for example, and then $ 1 costs only 75 cents?

The government is expected to raise taxes on corporate profits, but the CD Howe Institute opposes this. Evidence is compelling that lower tax rates (but obviously not zero!) Generate more tax revenues and strengthen investments that generate wealth and taxes. A prime example is the economic upturn in the United States when Calvin Coolidge and Ronald Reagan took office, and in Ireland, which was previously depressed. Ireland currently outperforms Canada in GDP per capita. Prime Minister Stephen Harper earned more from corporate tax after lowering the tax rate. Marginal income tax rates above 50% can also lower receipts. High-income earners come up with ways to reduce their jobs or reduce their tax burden.

Inflation and the welfare state’s overkill have come together. Many governments offer income support and so-called affordable housing, but that’s not enough. Returning to the basics, Say’s law states that supply creates its own demand. In other words, declaring low income and working in the underground economy means positive cash flow. How many drug sellers are paying taxes?

Argentina, one of the wealthiest countries in the world at the beginning of the 20th century, should remain the world leader if inflation and government spending produced prosperity. Long-term history tells another story. Since 1660 in the United Kingdom, through the Industrial Revolution, house prices and monetary values ​​have remained fairly constant until around 1914. Price fluctuations are now even. For example, the price of wheat in 1900 was half that of a century ago.

Canada’s government spending has many elephants in the room. These include payments for interstate leveling, indigenous issues, and support for the fast-growing lower class of multi-generational welfare recipients. As a result, those left behind dominate the costs of police, the criminal justice system, and misnamed correction services. Another elephant, according to the Fraser Institute, is the cost of processing and supporting recent immigrants. They receive billions of profits than they pay with taxes.

The gap between the rich and the poor is mercilessly widening, thereby undermining social justice and threatening the stability of democracy. Inflation enriches owners of capital assets and makes them, especially housing, more out of reach for low-income wage workers. The government is aware of the front-end costs it wants to avoid to enable those left behind with intensive education and skills training to reward employment in the high-tech economy. That way, people will be able to provide their own home.

Runaway government spending can take time to provoke the final disaster foreseen in Pierre Poirievre’s January 25 speech at the House of Commons. It took years after the end of World War II until the UK’s inflation accelerated. In the 1970s, British Prime Minister James Callaghan partially identified this issue. I frankly, that option no longer existed, and as long as it existed, it only worked by injecting a large amount of inflation into the economy after the war and then increasing the unemployment rate as the next step. “

Margaret Thatcher has solved the problem significantly by cutting government spending in parallel with tax cuts. She famously said that the problem with socialism is that you end up running out of someone else’s money. Prime Minister Jean Chrétien rigorously corrected this deficiency when the Wall Street Journal stated in 1995 that Canada could be considered an honorary member of the Third World because of government debt.

In short, it’s hard to understand how a tax increase can be successfully completed. Also, spending on infrastructure and social programs (funding to buy goods from China) is no substitute for investing in non-residential businesses that lag behind international competitors.

Colin Alexander was the publisher of Yellowknife News in North. His degree includes a master’s degree in politics, philosophy, and economics from Oxford University. His ongoing work is a book with the working title “Justice on Trial”.

The views expressed in this article are those of the author and do not necessarily reflect the views of The Epoch Times.

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