SWLF 3105 (Week 8) Today

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SWLF 3105 (Week 8)Todays theme taxation

• Two important thoughts as we begin
• How much to we hate buying dish soap?
• Why are most students opposed to tuition fee
  increases?

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Agenda for this week

• Film As Friend and Foe. Discussion to follow.
• Leftover discussion from last week.
• Analysis of Week 8 readings (Course pack, pp.
  122-157)
• Handing back Paper 1.

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Key themes/ideas from last week

• Paul Martin and CSL (handout)
• What does this example reveal about the federal
  Canadian state, government expenditure, and the
  role of interest groups?
• Are most Canadians unaware of the history with
  CSL and Paul Martin? Why or why not?

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Key themes/ideas from last week

• The Ontario PCs and Magna
• Again, what does this example reveal about the
  state, government expenditure, and the role of
  interest groups in Ontario?
• Do you remember this event when it made the
  headlines? Do you think this situation hurt the
  Ontario PCs in their election campiagn soon
  afterwards?

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Key themes/ideas from last week

• Who watches the statistician?
• What did we learn last week from the debate over
  the federal surplus and the Liberal 50/50
  promise?
• Are there any contradictions in the Ontario PCs
  common sense revolution? Was the governments
  rhetoric around red tape and bureaucracy betrayed
  by their actions in power?

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Applying our analysisThe 2004 U.S. Presidential
election

• Tonight, U.S. voters go to the polls.
• There is significant debate in the US about
  whether there is indeed a choice in this election
  for U.S. President.
• Consider the hand-outs for todays class about
  this, and decide for yourselves.

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Tax cuts less democratic government?

• This is the case Murray Dobbins view, but is it
  persuasive?
• If yes, why do pro tax cut political parties
  comprise the overwhelming majority in Canadian
  society?
• If no, what data explains that tax cuts do not
  mean reductions in social spending?

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2. Overtaxed Canadians?

• What is the criteria we use to measure this
  standard?
• Do we measure Canadian taxes to taxation rates in
  other countries?
• Or, do we measure the quality of life in Canada
  relative to other countries, and taxation policy
  in this context?

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3. On the average taxpayer and Canadian taxes
in comparative terms

• Are you comfortable with the term taxpayer as a
  common term used by Canadian politicians? Why or
  why not?
• What is meant by distinguishing between
  progressive and regressive taxation?
• Do all taxpayers benefit from tax expenditures
  equally? (Table 1.4 p.128)
• What does Dobbin mean what he claims that Canada
  no longer has a progressive system of income tax?
  (128-129)

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4. Canadian taxes comparativein perspective

• Consider Tables 2.1 and 2.2 (pp. 130-131)
• What does this tell us about Canadas total tax
  rate compared to other countries?
• What do corporations get in return for the taxes
  they pay?

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Canadian corporate taxes in perspective

• Consider Dobbins chart on p.132
• What does this tell us about Canadas stature in
  corporate tax rates relative to other comparable
  industrialized countries?
• Taxes are not the most important factor in
  corporate investment.

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6. Foreign direct investment

• An increase in FDI does not necessarily amount to
  an increase in jobs. In 1997, of 21.2 Bn of FDI
  in Canada, 97.5 of this comprised corporate
  acquisitions.
• What commonly happens when conglomerate merge or
  takeover smaller firms?

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7. Declining standard of living in Canada

• Consider Tables 4.1, 4.2, and 4.3
• What does this data reveal about the link between
  the tax system and our standard of living?
• Is low-wage, part-time labour is an unfortunate
  consequence or a deliberate outcome of government
  policy?
• What does Table 4.3 tell us about Canadian
  capitalism?

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8. The flat tax as an alternative

• How would a flat tax system work?
• What do Tables 5.1 and 5.2 tell us about the
  possibilities for a flat tax system in Canada?
• Will lower taxes create jobs?
• What other taxation options could be implemented
  in Canada to redistribute income?

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9. Brain drain

• Consider Table 5.3
• What is the case made by those who insist the
  brain drain take place in Canada?
• Do these claims stand up to research scrutiny?
• Even if some are moving to the US to take
  advantage of lower taxes, should Canadian tax
  policy change as a consequence of this?

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10. Tax breaks and incentives

• Is the cost of doing business prohibitive in
  Canada?
• How effective are tax breaks at promoting new
  investment? Can you think of an example where
  this is the case?

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11. Can the government create jobs?

• Think of many of the most high profile public
  sector workers, then consider other private
  sector occupations. Which jobs strike you as the
  most rewarding?
• Are tax cuts to the poor effective in stimulating
  the economy?
• What are Dobbins findings in contrasting job
  growth through tax cuts and government spending?

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12. Tax cuts and GNP

• Is there a relationship between tax cuts and GNP?
• Is having a strong welfare state good for
  business?

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13. The GST

• Is the GST a progressive tax?
• Why does Dobbin claim there is relationship
  between lower taxes for those well-off and the
  GST?
• What would be the result of scrapping the GST?

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14. Do Canadians want lower taxes?

• What are Dobbins conclusions around the debate
  for and against tax cuts?
• What do you make of the results from the Globe
  and Mail poll, the Environics poll, the Ekos
  poll, and the Vector Research poll?

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15-16. Canada/US tax rates

• What is different when we measure spending
  power over rates of taxation?
• If Canadians are better off in after-tax terms,
  why are US incomes about 2,200 CAN higher?
• What is the rough comparison between CAN-US
  federal tax rates and state-provincial tax rates?
  
• Are you surprised by this information? Why?

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17. Taxes and democracy

• Taxes are a controversial issue because they go
  to the heart of debates around social welfare.
• What claims are made in Franciss article that
  cut against the data produced by Dobbin?

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For next week

• Week 9 The Distribution of Income and Wealth.
• Paper 2 is around the corner! Drop by and chat
  about Paper 1 to discuss your strategy this
  time.