NorthernRaven wrote:Perhaps you could summarize what you think the point of the report is
Taxes paid by the average Canadian have exceeded the cost of food+shelter+clothing (hereafter referred to as the "necessities") since 1992.
Prior to 1981 we always
paid less in taxes than "necessities".
Please note these dates are after
the introduction of modern CPP, OAS, GIS, the Trans-Canada highway, and "medicare" (i.e. the Canada Medical Care Act).
Why would taxes have exceeded "necessities" since 1992 if both are affected similarly by inflation?
Have the, by definition, "non-necessary" services provided to the average Canadian improved enough to explain the divergence since 1992 or does this indicate growing inefficiencies and bloat in our government?
Discuss (but please read the required material first).
I think "both are affected similarly by inflation" and "by definition, non-necessary" are the key points. If someone needs say, an operation, or an expensive drug, that's certainly necessary in the colloquial sense that Fraser hopes people understand by their use of the word. But those expenditures will show up in "Other" or "Taxes". Conversely, one's purchase of some fab Jimmy Choo shoes is "Clothing", but not what most would think of as "necessary"! The shoes sort of things may not be overly significant, but the health sort of example certainly would. I'm pretty sure if you look at the cost of health care over the last 30 years it has increased far more rapidly than inflation - this is hardly a problem unique to Canada. That would probably account for an appreciable fractional increase in government expenditures by itself. But my basic point is that accepting some specific set of "necessary", "average", "income" and whatnot over 60 years from a specific (and interested) source, and assuming they and the story they are supported mean what people might think without understanding the details is potentially quite misleading.
Without understanding how the numbers are constructed, you can play all sorts of games with them. "Necessities" was 56% of income in 1961, but only 34% in 2010. Has government taxation really been grinding families into the ground since then and forcing them to give up a huge chunk of the necessities of life? I think not...
Shouldn't the 10% "Other" from 1961 have been shrinking to cover these missing "necessities", instead of increasing to 20%? Or has "average income" (however defined here) been going up? Or have purchasing patterns been altering to increase items in Other, as opposed to non-necessary "Necessities"?
Or look at 1976. Taxes went from 43.4% in 1974, down to 36.2% in 1976 (and up to 40.8% in 1981). Does this mean that Trudeau-era economic policy produced a brief golden era in the early 1970's? I suspect you'd be hard-pressed to get even dedicated Liberals to go that far! Likely, it is probably due at least partly to oddities in the inflationary time before wage and price controls, or something like that. Bottom-line, assuming this report means "we are paying more for the same stuff we used to get from government" is a dangerous assumption, and for some items like healthcare where they are more expensive, it isn't obvious that they would be significantly less so if delivery was not by "Taxes".