Last Updated on Monday, 18 April 2011 20:37
The Alberta Government will spend an extra $700 million on health care, in addition to the $630 million increase over last year. This means that total spending on the government's health care monopoly is rising by 18% in just one year, from $7.4 billion in 2003-04 to $8.7 billion in 2004-05.
The rising costs of the government's health care monopoly are, predictably, leading to talk of more tax increases. Albertans suffered their first round of tax increases in March of 2002, when Premier Klein raised the health care premium tax to $1,056 per year for Alberta families, and $528 per year for individuals. This money doesn't pay for health care any more or any less than other provincial taxes, like income tax, fuel tax, property tax, etc. Worse, this "health care premium" tax gives Albertans a false impression about how much health care really costs.
But Premier Klein's tax increases of 2002 might not be the last ones inflicted on Albertans in the name of health care. The Graydon Report recommends that the Alberta Government consider:
- giving Regional Health Authorities more taxing powers
- increasing the health care premium tax
- increasing personal income tax
- introducing a "health care deductible" to be capped at 1.5% of taxable income
Throwing more tax dollars at a government monopoly is not the way to better health care. The problem is the Canada Health Act, which prevents provinces from innovating better health care policies. And this in spite of the fact that Canada's Constitution gives provinces exclusive jurisdiction over hospitals, and in spite of the fact that provinces - not Ottawa - pay most of the health care costs.
Further, the Canada Health Act's principles do not include quality, choice, accountability and sustainability. As a result, Canadians die on waiting lists in a health care system which ranks a mere 30th place, according to the World Health Organization (WHO).
France, Germany, Singapore, Australia and other countries with better health care than Canada have a parallel private system which co-exists alongside the public system. Does that mean that some people receive better health care than others Yes, absolutely. And what, pray tell, is wrong with that People who have more money are able to purchase better food, clothing, housing, transportation, legal services and holidays for themselves. Why should people be denied the right to spend more of their own money to buy better health care for themselves As long as everyone enjoys basic food, housing and health care, why is it wrong for some to enjoy better food, housing and health care
Today's government monopoly on health care prevents people from spending their own money on more health care or better health care for themselves. Only those who are wealthy enough to purchase health care abroad - and a plane ticket to get there - can escape this reality. Everyone else runs the risk of finding themselves on a waiting list, living in continuous pain and possibly dying.
Unless Alberta taxpayers speak up in the months ahead, Premier Klein will likely tear a page from Ontario Premier Dalton McGuinty's budget, and hike taxes in order to throw even more money at the government's health care monopoly.
Last Updated on Monday, 18 April 2011 20:41
Should the federal government decide what form of child care is best, using the tax system to favour institutional care over home care Or should the government be neutral and allow parents to make their own child care choices, free from financial penalties
In light of election promises to spend billions of tax dollars on government-regulated daycare, these questions deserve answers.
Taxation has a huge impact on family life. Canada's three levels of government consume close to one half of Canadians' earnings through sales, income, property and other taxes. But Canada's tax system does not recognize the cost of raising children, let alone the cost of providing a basic standard of living for oneself or one's family. The lowest federal income tax rate of 16% kicks in as soon as a person earns more than $8,012 in a year. The spousal exemption is a paltry $6,803. As for children, the tax system provides no exemption at all. This means that a family with children starts paying 16% federal income tax on its income in excess of $14,815 per year.
Ottawa should stop taxing people who earn minimum wage, and raise the basic personal exemption and the spousal exemption to $15,000 each. That would enable families to provide a basic standard of living for themselves, before having to send 16% of their earnings to Ottawa.
As for spending billions of tax dollars on institutional daycare, this would only benefit parents who prefer that kind of child care. It doesn't help other families, who make financial sacrifices to enable dad or mom or both to care for children at home. Some studies suggest that institutional daycare is as good - or perhaps better - than "parent-care" at home. Other studies suggest the opposite. This debate has gone on for decades, and will likely continue for decades more. The federal government should not take sides in this debate by forcing all Canadians to pay for state-run daycare with their tax dollars.
Rather than spending tax dollars on institutional daycare, the tax system should allow parents to claim an exemption (eg. $2,400 per year per child) - an amount free from federal and provincial income taxes. How parents spend their own $2,400 should be entirely up to them. There are as many different child care arrangements as there are families. Parents should be free to choose what kind of child care they think is best, without paying higher taxes for the "wrong" choice. A per-child tax exemption would help empower all parents to make their own child care choices - including the choice of full-time or part-time institutional daycare.
On this same topic of respecting parental choice, Ottawa should end its tax discrimination against families supported by one income-earner. Two different families, each earning $60,000 per year, should pay the same in federal tax, regardless of whether that $60,000 was earned by one person or by two people. The federal government should treat all families equally, without rewarding or punishing different kinds of financial arrangements and time arrangements which families set up for themselves.
If politicians really want to help families, the starting point should be allowing families to support themselves, and respecting parents' child care choices.
Last Updated on Monday, 18 April 2011 20:42
Some media people have declared that government cannot "afford" to reduce taxes. Some politicians say that proposed tax cuts might "cost" too much. Journalists sometimes ask how lower taxes will be "paid for."
All three phrases are based on the assumption that government owns - or is entitled to own - the wealth created by Canadians. It's as though government has a legitimate claim to every dollar earned, giving only what it can "afford" back to the people who earned it. Only a government which already owns every dollar in every bank account in Canada would need to "pay for" a tax cut.
It "costs" me money to buy groceries because the money belongs to me in the first place. If I were spending someone else's money to buy groceries, or if the store gave them to me without charge, the groceries would cost me nothing at all. But if groceries "cost" me something, it's because the money spent to buy them truly belongs to me. In the same way, if it "costs" government money to cut taxes, this implies that government is money's rightful owner, or has a valid first claim to Canada's wealth.
This question of who has a valid first claim to wealth - government or people - should be pondered as we approach voting day on June 28. It just so happens that June 28 was last year's Tax Freedom Day, when Canadians finally started working for themselves. In other words, the average Canadian works from January 1 to June 27 to pay all the sales, income, property and other taxes collected by three levels of government.
Wealth in Canada - and every other country in the world - is created by workers and managers, investors and businesses, buyers and sellers, inventors and manufacturers. Every day, millions of individuals make choices about what to buy, where to work, how to run their businesses, which new products and services to develop, and where to invest their money. People make billions of voluntary decisions and perform billions of voluntary tasks, resulting in a prosperous economy with a vast multitude of different foods, clothes, products and services. Wealth is created because people work, buy, sell, farm, manufacture, invent, trade, invest, explore, develop resources, take risks, set up new businesses etc.
If government is our master, and we its servants, then government certainly has the first claim on all wealth produced by people. It would then follow that government has to "pay for" tax cuts which it can't "afford" because lower taxes "cost" too much.
But if wealth belongs first to those who created it, and if government should be our servant and not our master, then government is not entitled - morally or legally or otherwise - to all of our money.
The question is not whether government can "afford" tax cuts, but whether Canadians can afford to continue paying 49% of their earnings to support three levels of government. If individuals are the rightful and legitimate owners of the money in their bank accounts, the question is not how government will "pay for" tax cuts, but rather how much the politicians' spending promises will cost us.
In short, if wealth belongs first to people, and if government is their servant, then tax cuts cost nothing, are always affordable, and don't ever need to be paid for.
Last Updated on Monday, 18 April 2011 20:42
Alberta teachers should not be allowed to go on strike, period. Public education is a vital, essential service on which parents and students depend. Taxpayers pay $3.9 billion per year for Alberta's K-to-12 public system, and are therefore entitled to receive value for that money without disruption by strikes or by threats of strikes.
It's not because Alberta's teachers are the best paid in Canada. It's not because their 14%-over-two-years pay increase is much larger than pay increases received by workers in the private sector. It's because the teachers' union enjoys an absolute monopoly over the provision of teaching services and therefore has the ability to hold students and parents hostage to its demands. Premier Klein's government can and should change existing legislation which enables the Alberta Teachers' Association to hold children for ransom through threats of strikes.
When teachers strike, parents suddenly have no choice but to seek emergency childcare from 9:00 to 3:00, five days per week. Everyone knows that the number of available daycare spaces is not infinite. And with very few exceptions, parents simply cannot afford to pay for "reserving" a spot from September to June just in case teachers decide to strike. When teachers strike, students who depended on teachers must suddenly choose between temporarily embarking on a home-schooling program, or learning nothing at all. Home schooling can be a wonderful choice leading to excellent outcomes, but not when it's imposed suddenly and temporarily through a teachers' strike. In short, a teachers' strike is grossly unfair to parents, grossly unfair to students, and grossly unfair to taxpayers.
But surely the teachers' union has a right to speak about class size and other education issues Yes, as do students, parents, grandparents, employers, and all taxpayers. The right to express one's views is not the same as the right to impose one's demands.
How would teachers feel if parents and other taxpayers had the legal right to withhold salaries from teachers until certain demands were met Would that be fair If it's unfair for taxpayers to stop paying teachers' salaries, why should the teachers' union have the legal right - conferred on it by Premier Klein's government - to withdraw teaching services
The Alberta Teachers' Association will cheerfully and enthusiastically argue that public education is fundamental, indispensable, all-important, and vital-to-the-future public service. That's exactly why Premier Klein should not give the teachers' union a legal right to withdraw from delivering this vital public service.
Things would be different if the teachers' union did not enjoy an absolute monopoly over education in Alberta. Then parents would have the option of sending their children to other schools, where teachers were not on strike. But a teacher, no matter how well qualified, cannot exercise his or her profession without being a member of the teachers' union. The Alberta Teachers' Association controls education in Alberta, and Premier Klein's government allows it to do so.
Learning Minister Lyle Oberg and the rest of Premier Klein's government have a choice. They can continue allowing the Alberta Teachers' Association the right to strike and withdraw a vital and essential public service. Or the government can do Alberta's parents, students, teachers and taxpayers a favour and change this legislation.