skier

AHHHHHHHH *puts on tin foil hat* the evil 2 dollar words can't get me with this on!

__________________
"Asking a bomb squad if an old bomb is still "real" is not the best thing to do if you want to save it." - denim

Antikarma

OK, now that's just ignorant stereotypical thinking, me's thinking. My wife works for the feds, she's a helluva lot higher on the food chain then a secretary, and she earns the SECOND number you quoted. Hell her boss earns less than 70k, by far.

And whereas there are some extremely good dissections of the wheres and the how's, I prefer to take a somewhat naive and idealistic approach to the reasoning of why the debt is so high, as opposed to where it could be.

Lack of creativity. It seems every new approach we have, is simply the status quo with new spin. That can be applied to fixing healthcare, or our military, or pretty much any federal fix it up program you like. Cue 1 year study and report here, cue fist full of dollars next, cue trumpeting of our revived and saved [insert program here].

I think, as financial managers go, the liberals have done a bang up job. I think as free thinkers and problem solvers, they leave much to the imagination.

And my theory on the surplus? I know this will get shot down as incorrect or perhaps a horrible idea and I'd like to hear a counter argument. Universal, free day care. My family pays 800 a month for our two kids. And many single parents can not work because their income cannot support both day care and their expenses. All of that income gets turned right back around into the economy. I know it would easily double the disposable income of my family (course, my disposable income goes to Vegas, but don't tell the feds

), and by following the same (of course, perhaps flawed) theory, many income support dependant families can go get jobs, which would lower the federal burden as well as create new tax revenue.

Or hell, legalize pot. Could support Universal Daycare off the hippies in the Okanagan

__________________

"Whoever you are, go out into the evening,
leaving your room, of which you know each bit;
your house is the last before the infinite,
whoever you are."

JJRousseau

AntiK, I certainly agree that over the past ten years, the bottom tiers of government services have become MUCH more efficient. Most gov't employees at the bottom level work very hard, in many case for less compensation than a comparable private sector job.

The waste in government (aside from the pet projects, grants to friends and corporate welfare) comes in the bureaucracy - which is why I'd oppose your idea of universal day care. Imagine the gov't megalith that would be required to administer that! However, I do agree that assisting people to earn a living is preferable to welfare.

Yakk

Make day care expenses fully deductable against your income, with an extra nominal (say, 3$) deduction/day for side-expenses to day care (dropping off/picking up).

Seems more practical than a national program.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

JJRousseau

Yakk, agreed. The problem, I guess, is that some people don't make enough to pay the child care even if they are deductible. Not sure how to deal with that.

Yakk

Then they should stay at home and take care of the child?

If it costs X to have someone else take care of your child, and you earn Y by having someone else take care of your child, if Y < X, you should take care of your child yourself.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

Antikarma

uh, which is why I brought up the issue. Molly the single mom can't afford to take her child to daycare, so she has to stay at home with the child, forcing her onto social assistance and the like. A program that lessens child care costs to the point of affordability not only reduces the social costs of having to support someone, but creates revenue income by taxing an income that would otherwise not exist.

__________________

"Whoever you are, go out into the evening,
leaving your room, of which you know each bit;
your house is the last before the infinite,
whoever you are."

Yakk

If Molly can't earn more at a job than it costs to put her child in daycare, why shouldn't the government 'hire' Molly to take care of her child? It is cheaper than hiring the daycare. In a way, Molly is more productive taking care of her child than she is working?

Admittedly, to make the 'someone else taking care of your child' completely tax-friction free, the cost has to be tax deductable and the income child care people earn has to be tax free. This looks something like a subsidy?

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

Antikarma

No it is not cheaper. By the governments own standards, one childcare worker can take care of six pre school aged children. The one child care worker I know, with a degree in ECE, makes 32000ish pre tax. So work that out to, roundabouts, to 5300 a year per child. And yes, I'm aware that these are not numbers set in stone, but it's for debate's sake, of course.

Now, social assistance provides, for a single person, 1200 per month. This is of course in MY region, and very able to vary based on economic situation and area of residence. Keep in mind that that number is also based on SINGLE person, and a single mom would recieve more. Now, for the government to pay her at home it costs, immediately, 14400 a year at minimum (that is taxed too I believe). It ALSO loses out on potential tax revenue from the income of Molly were she gainfully employed, adding to that cost.

Which brings us to the second part of that. Noone at all can debate that Molly is not the most qualified to care for her child. But that arguement is two pronged. By a statement like that, it seems to degrade the parenting of those of us who DO work and send their child to daycare. As well, I would argue she is not doing the best for her child resigning herself to a lifetime of low income living. No college fund, no nice dress at prom, no family vacations, there are many things you miss out on when living low income.

Social assistance barely provides enough to survive off of. Its awful hard to take college courses while on it (to provide a means by which you would make an income to support your family as WELL as child care)

And as well, the point of my arguement is that universal daycare provides for more than lower income families. My family spends (I'd have to double check with my wife) 650 a month on day care. If I could turn part of that around and invest it in an RESP, or spend it back into my family, I think it helps ALL families involved.

But then again, as I also said previously, its just MHO, and could mean nada in the grand scheme of things.

__________________

"Whoever you are, go out into the evening,
leaving your room, of which you know each bit;
your house is the last before the infinite,
whoever you are."

Yakk

Oh, so the problem is that the marginal "tax rate" on people leaving social assistance is stuplidly huge? I'd be all for fixing that!

I already subsidize your family to a huge extent. I'd be willing to make that 650 a month tax-deductable, it being a cost of employment, but building a government child care program is a bit much.

I was just saying, if she can't afford to work and put her child in child care, then she must be more efficient at taking care of her child.

As it happens, the problem here was that social assistance results in punative marginal "tax" rates on people with low incomes. That huge tax rate magnifies the cost of working and hiring someone else to do something for you.

That single mom is earning, say, 18,000/year. If she goes to work at a 12$/hour job for 7.5 paid hours/day, 5 days/week and 48 weeks/year, she earns 21160$/year. She still recieves 2,000$/year in social assistance.

Her nominal marginal tax rate in going from 18,000$ to 23,160$ was, say, 18%.

Which means that by going to work, she earned 4238.58$ over the year. Now, she worked 1800 hours that year, which works out to an effective hourly income of 2.35$/hour.

She was paid 12$/hour. This means her effective tax rate was over 80%.

Not only that, placing her kid in daycare cost her 7800$/year.

If you got rid of the punative effective marginal tax rates on people on social assistance earning income, and allowed daycare costs to be deducted from income, this wouldn't be nearly as much of a problem.

I hold that an 80%+ marginal tax rate on the poor is the core of the problem.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

Demeter

The education & medical systems need to be overhauled. Thats a given. We need daycare funding big time (as mentioned above). And better student loan rates. I think these should be damn near tax-free.

Antikarma

I'm not entirely sure how you meant that, and I hope you didn't mean it as you wrote it. That's incredibly presumptuous to the point of rude if so. You don't subsidize my family at all. We pay money to the government, not receive it, and proudly so.

That being said, we're looking at this from two separate perspectives. The argument you use is sound, and of course, correct. My argument is approaching this from another perspective.

Let’s assume we use your numbers, because I find no fault in them at all. Let’s assume that she does go to work, for 12 dollars an hour (which by the way in my neck of the woods, not happening. But I'm pretty sure that’s doable anywhere else in Canada), and send her child to daycare at a cost I believe we both agree on. All being said, with what she takes home, she cannot survive. The amount of money that she would bring home, deducting rent, childcare costs, food, utilities, essentials such as a small budget for clothes etc, if she DOES manage to somehow get by living in a cheaper part of the country, leaves absolutely nothing to allow for educational upgrades or spending on the child.

Now, my perspective is this. Let’s do as you say and allow the daycare costs to be deducted from taxable income. Molly goes to work, making, using the numbers, a total of 23160 a year, or 1930 a month. Before, using the taxable combined rate in BC, she would be paying 425.57 a month in taxes, taking home 1504.43 a month. Now, using the new numbers, with daycare rate deducted from the taxable income, molly has a taxable income of 15360 and pays 282.24 a month in taxes, taking home 1647.76.

Rent:650 (lets assume she lives in the ghetto)
Daycare: 650 a month
food: 200 dollars a month
We're up to 1500 dollars a month in expenses and she's eating rice every night without a telephone.

You see, we're approaching this from separate perspectives, and both of us are right in one way. But even with the daycare removed from taxable income molly could not support the family.

Feel free to poke holes in that. It's an open discussion and I'm never always right (according to my wife, its actually quite rarely I am). But unless I'm misunderstanding your perspective, which I don't believe I am, I don't think what you have offered provides a solution more than a band-aid to the people we are both talking about.

__________________

"Whoever you are, go out into the evening,
leaving your room, of which you know each bit;
your house is the last before the infinite,
whoever you are."

Antikarma

Wait, I forgot to deduct the personal income deduction from that, so the numbers are skewed. As I said, not always right. I'll re-crunch the numbers if you like, but I think it still stands to reason

__________________

"Whoever you are, go out into the evening,
leaving your room, of which you know each bit;
your house is the last before the infinite,
whoever you are."

Yakk

Families recieve tonnes of tax breaks from the government, and children have higher medical costs than adults do. Single people don't. I shouldn't have used the a specific noun, pointing to your case. My apologies.

I subsidize families in the same way that elderly people's property tax subsidizes young people's education. =)

I assume you mean 12$/hour unskilled labour isn't doable? Or, working full time at 12$/hour isn't doable?

She cannot be well off. I would argue she could survive.

However, please examine the implications of both keeping social assistance and lowering the effective marginal tax rate on low income individuals. The end result is a relatively low marginal tax rate on low income people, and a net negative tax rate on low income individuals.

*nod*, children are extremely expensive.

Luckily, the child could self-finance an education, given the Canadian student loans/bursuries/etc system.

Alright, I'll take those numbers as accurate. I assume you rolled CPP and EI into the income tax rate?

Heh, I'm not living in a ghetto. I'm sharing a 3 story house with 2 other people, and paying 430$/month, inclusive.

If you can't afford the rent in a big city, get the hell out of it.

A shared telephone would cost me another 10-20$ -- instead, you could get a cell phone (100$ hardware costs/5 years, or less if you buy used) and a pay-as-you go plan (10$/month, only minimal phone use, no viable long distance).

And no, I don't live in a big city. =)

Using 450$/month rent, that means she now has 350$/month in disposable income, for things like clothes, food upgrades, or savings.

She can't support her family out of (relative) poverty.

She is a single, unskilled, mother, with no support from the father or her family. She should be relatively poor. And I mean relatively poor in the sense that she should be worse off than a single unskilled woman.

Lets examine what I meant by "marginal tax rate on the poor".

Lets say social assistance comes to 8,000$/year (lower than current), and that marginal tax rates on the poor cap out at 40%.

So, if you go out and get a job, and earn 100$/month, at most 40$/month is clawed back from your social assitance and taxes. I

Income(annual):Assitance-taxes (negative = taxes, positive=income)
0$:8,000$
5,000$:6,000$
10,000:4,000$
15,000:2,000$
20,000:0,000$
25,000:-2,000$

Extreme? Well, considering that the top marginal tax rate anywhere in Canada is 52%, should we be taxing the poor on the margin at a higher rate?

Under this model, she is earning 12.50$/hour, 7.5 hours/day, 48 weeks/year, for an income of 22,500$ before taxes.

650$/month in child care comes to about 8,000$, lowering her income to 14,500$.

14,500$ at 40% marginal comes to 5,800$ in taxes. After child care expenses.

Paying 650$/month for an apartment to herself leaves her with 6,500$/year, or 540$/month for food, clothing and the like.

Is this ridiculous? Quite possibly. The fact is, right now, the effective marginal tax rate on the poor is higher than it is for any other demographic in Canada. 40% is already a higher marginal tax rate than most of the middle class.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

Antikarma

The 12$/hour unskilled labour bit. Thats a top end secretary or skilled labourer here. Unskilled labour can expect to make 8 bucks an hour here tops, but thats regionalizing it. As I said, sure its more than possible in most parts.

Average 2 bedroom apartment, in my community of 30k people, is 700 a month. Not sure how that stands up to national average. I know my brother looked at one in Lethbridge for 600 a month, utilities included, for one bedroom. That seems a lot cheaper, but meh, welcome to BC.


I like your arguement. I hate to admit it, but I can't poke any holes in it. Dammit Wheres JJ when I need someone to poke holes in my opposing view

Well said mate.

__________________

"Whoever you are, go out into the evening,
leaving your room, of which you know each bit;
your house is the last before the infinite,
whoever you are."