Tag Archives: taxes

Kansas was supposed to be the GOP’s tax-cut paradise. Now it can barely pay its bills.

Kansas’ tax cuts haven’t worked out as planned

Brownback’s tax cut proposal came as Kansas’s revenues were on an upswing. Spending cuts and a one-cent sales tax passed by Brownback’s Democratic predecessor had combined with economic growth to give Kansas a surplus. Now, Brownback argued, his tax cuts would lead to even more success. “I firmly believe these reforms will set the stage for strong economic growth in Kansas,” he said.

The governor proposed to cut income taxes on the state’s highest earners from 6.45 percent to 4.9 percent, to simplify tax brackets, and to eliminate state income taxes on most small business income entirely. In a nod to fiscal responsibility, though, he proposed to end several tax deductions and exemptions, including the well-liked home mortgage interest deduction. This would help pay for the cuts.

Yet as the bill went through the state Senate, these deductions proved too popular, and legislators voted to keep them all. The bill’s estimated price tag rose from about $105 million to $800 million, but Brownback kept supporting it anyway. “I’m gonna sign this bill, I’m excited about the prospects for it, and I’m very thankful for how God has blessed our state,” he said.

Democrats, and some Republicans, weren’t buying it. “It bankrupts the state within two years,” said Rochelle Chronister, a former state GOP chair who helped organize moderate Republicans against Brownback’s agenda. And the House Democratic leader, Paul Davis, laid down a marker. “There is no feasible way that private-sector growth can accommodate the price tag of this tax cut,” he said. “Our $600 million surplus will become a $2.5 billion deficit within just five years.” In return, Brownback’s administration claimed the bill would create 23,000 jobs by 2020, and would lead 35,000 more people to move to Kansas.

After the cuts became law, it was undisputed that Kansas’s revenue collections would fall. But some supply-side analysts, like economist Arthur Laffer, argued that increased economic growth would deliver more revenue that would help cushion this impact.

Yet it’s now clear that the revenue shortfalls are much worse than expected. “State general fund revenue is down over $700 million from last year,” Duane Goossen, a former state budget director, told me. “That’s a bigger drop than the state had in the whole three years of the recession,” he said — and it’s a huge chunk of the state’s $6 billion budget. Goossen added that the Kansas’s surplus, which had been replenished since the recession, “is now being spent at an alarming, amazing rate.” 

This is crazy.  His paid for bill went from $105 million to $800 million and he still signed it.  No wonder Brownback’s popularity has hit rock bottom. 

Invest in transit now or suffer severe consequences

Same thing could be said about any city that has inferior transit (ahem Saskatoon)

Last week, the Premier of Ontario’s Transit Panel — comprising 13 citizens from across the region and the political spectrum — unanimously recommended a strategy to fund transit in the Greater Toronto and Hamilton Area. The report’s title, Making the Move: Choices and Consequences, highlights the urgency of investing in transit expansion today, failing which there will be severe consequences tomorrow.

Road congestion and transit crowding in the GTHA have already reached a tipping point. With 2.5 million people and one million more cars expected to come into the GTHA in the next 18 years, the existing severe state of congestion will become intolerable.

We have come up with a revenue plan that works. Our recommendations call for a fair and balanced contribution from all stakeholders, without asking too much of any one group. Because new transit infrastructure benefits all of society, costs should be shared — by business, drivers, and transit users. Since riders contribute through fares that rise regularly with inflation, the panel chose not to ask more of them. We have asked the government to redeploy the HST revenue it earns on gas and fuel taxes.

As for the tools, our report outlines two variations on a new funding model. The first combines a phased increase of gasoline and fuel taxes starting with 3 cents per litre in year one, a modest increase of 0.5 per cent to the general corporate income tax, and a redeployment of the GTHA portion of the HST charged on gasoline and fuel taxes. The second option is almost the same, but proposes less from gas and fuel, and more from HST.

Taken together, the combined increases would raise between $1.7 billion and $1.8 billion annually for transit in the GTHA. This revenue stream would then lever the additional borrowing to build three-quarters of the Next Wave sooner than expected. People would see the benefits from this investment, thereby generating support for The Big Move in its entirety. This revenue strategy also provides enough money to pay for local transportation improvements and to retire the debt over time.

We researched the possible options rigorously. We favour the gas and fuel taxes because they match usage, affect travel behaviour, are simple to administer, raise a lot of money, and haven’t been raised in more than 20 years. Even with the increase, the GTHA would be below Montreal or consistent with Vancouver.

The impact on households is very tolerable — about $80 per household in year one, just $260 per household after eight years. Compare that to the cost of the gasoline wasted due to stop-and-start commuting for 32 minutes on a daily round trip if we don’t remedy the situation. This amounts to $16 every week or $700 per year. The choice is obvious.
The most common and forceful message that emerged from all of our public meetings and consultations is that the public has very little trust in how transit decisions are made, how money is managed, and how projects are delivered. When it comes to funding transit, the public told us: “Dedicate it or forget it.”

We address these concerns head-on. Our recommendations, when enacted, will ensure that new revenue will be held in a segregated Fund to be spent solely on transit expansion in the GTHA. And they will guarantee accountability and transparency for how funds are spent and reported on.

We emphasize the importance of comprehensive, publicly available business case analysis prior to project approvals. We cannot afford to waste billions of dollars on projects that result in low ridership and huge operating subsidies.

We also cannot afford more congestion and more gridlock. We cannot afford continued losses in productivity and missed opportunities to create more jobs. We cannot afford more pollution and commuting stress. Above all, we cannot afford to wait.

A new contract with citizens for building a great city.

This is from Charlie Clark

I believe that the way forward is to work out a plan that lays out clearly our approach to approving services, a discussion about options for how to pay for this, and then a much improved communication approach that lays out clearly what we will get from the choices we make. I also think we need to set some measurable targets to show that we are achieving results. Snow clearing is but one piece of the puzzle. This year we have had the second highest number of watermain breaks in the 35 years of recorded history on this for example – so we need also to have a look at the big picture and make sure we aren’t just reacting to whatever is most visible.

While I have heard from many people the view that if we weren’t doing things like building the new Art Gallery or River Landing that we wouldn’t have these challenges. Yes the Art Gallery will require an increase in the amount of funding coming from property taxes – this is a signature project for the City. When stacked up against costs like the South Bridge or even building a single overpass it becomes clearer that this one project will have little impact on the overall bottom line of the City – especially with the money coming from fundraising and other levels of government.

That being said – I remain of the view that quality of life comes from attending to our hearts and minds as well as our car tires. If we want our young people to decide to stay here, and we want to continue to attract people to live here – we have to offer more than just cleaner roads. All evidence points to this, and any review of even just neighbouring prairie cities will show that they also are investing in arts and culture along with concrete and asphalt. We ignore this at our own peril.

I hope to carry on the conversation about this with you in the next months and years as we determine the best way forward in building a City that we all feel proud to live in and excited to show off to our guests.

I really like this and it makes a lot of sense.  Clark is on to something here with this contract as he asks the question, do we want really low taxes or do we want to use this time to build a great and enduring city.

Taxes hit a 30 year low

According to the Congressional Budget Office

Americans paid the lowest tax rates in 30 years to the federal government in 2009, in part because of tax cuts President Obama sought to combat the Great Recession, congressional budget analysts said Tuesday. […]

During Obama’s first year in office, the average tax rate paid by all households fell to 17.4 percent, down from 19.9 percent in 2007, according to the CBO. The 2009 rate was significantly lower than the previous low of 19.4 percent in 2003 and well below the 30-year average of 21 percent.

The difference in worldviews between Mitt Romney and Barack Obama

Changes in tax rates under Romney and Obama

As Paul Krugman sees it.

Now, this is only for the specifics Romney has announced; he claims that he will make up for the large revenue losses under his plan (Obama gains revenue) by closing loopholes. But he refuses to say which, and the clear reality is that he’s talking through his hat. Meanwhile, Romney also proposes severe cuts in Medicaid, and his party wants big cuts in other safety-net programs.

So like it or not, we have an election in which one candidate is proposing a redistribution from the top — which is currently paying lower taxes than it has in 80 years — downward, mainly to lower-income workers, while the other is proposing a large redistribution from the poor and the middle class to the top.

So the next time someone tut-tuts about “class warfare”, remember that the class war is already happening, in real policy — with the top .01 percent on offense.

Are the influx of casinos a result of our regressive taxation policies?

Martin Regg Cohn in the Toronto Star

We’ve lost our moral compass in recent years — not by embracing gambling, but eschewing taxes. We have been contaminated by the anti-tax compulsions of American political culture that prevent governments from maintaining a progressive taxation system. This pathological aversion to taxation has driven the explosion of casinos everywhere, as governments rely on gambling to take money from the poor while sparing the rich.

Column: There has to be more than tax cuts

My latest column in The StarPhoenix.  I’ll add in some extra link later today but for now I need to get some work done for my other employer.

The Star Phoenix Since the end of the Super Bowl, I have been following the National Football League lockout and the litigation surrounding it. I have concluded that the hard-line owners and the players association leaders are the stupidest group of people not working in the National Hockey League’s front office.

That all changed last week, when both the Republicans and the Democrats started to talk openly about defaulting on the debt of the United States – something that seemed so preposterous that I thought I was reading a headline from News of the World.

Sadly it wasn’t. If a deal isn’t struck soon, the U.S. will default on debt – something that neither Canada nor most western nations have ever done – and it will cause economic chaos around the world, again. Why has it come to this? You can blame George W. Bush or Barack Obama, but this one rests with the Tea Party.

Almost everyone agrees that the U.S. budget has to be cut.

Incredibly, President Bush cut taxes at the start of his first term and then, while the world changed after the Sept. 11 attacks, the U.S. tax rate did not.

Rather than raise taxes to pay for wars in Afghanistan and Iraq, Bush kept the rates low and borrowed, as if there were no tomorrow.

In case you haven’t taken time to think about how expensive wars can be, the U.S. spent $20.2 billion to provide air conditioning alone in Afghanistan and Iraq last year. By contrast, Canada’s massive Economic Action Plan had just $12 billion in new infrastructure spending.

On top of the wars, the Great Recession hit. Then, to control long-term health costs, Obama brought in health-care reform. It wasn’t universal care, but better than what Americans had. Suddenly people started talking about seceding from the union. Apparently helping people with their health problems is unconstitutional.

Somehow, out of all of this, the Tea Party was formed and has decided to fight raising the debt ceiling.

Conservative columnist David Brooks calls the Tea Party a "psychological protest," and I tend to agree. You would dismiss the partiers as wing nuts if they didn’t hold the balance of power.

In the 2010 midterm elections, the Tea Party was quite willing and able to defeat any Republican incumbent who compromised on increases to spending or taxes. The result is that Republican Congressmen know they will face a tough primary challenge from the right if they step out of line and compromise.

The result? A possible debt default.

What I find interesting about this is not the politics but the psychology. Tea Party supporters see taxes and government as evil: No tax increase can ever be justified.

I complain about taxes like everyone else. I howl every year when the mill rate goes up, but after 13 years of making weekly mortgage and property tax payments, my payments are now $130, up from $114 a week in 1998. Even if the city reduced its tax rate to the 1998 level, my gain would be about $15 a week. I cheered when the GST was lowered to five per cent from seven per cent, but I haven’t noticed the price go down on anything I have bought.

While I don’t especially like paying taxes, I also know they go toward making our city and our country a better place to live. Even the great icon of conservatism, Ronald Reagan, raised taxes when more revenue was needed. Brian Mulroney’s hated GST was a component that allowed the Chretien Liberals to balance the budget.

Yet to balance the budget the Tea Party demands only spending cuts, which will largely hurt the poor, rather than seeking to close tax loopholes for the rich. They propose gutting Medicare, which could hurt seniors across the nation.

It’s something you hear often and it boils down to: "If I can make it, so can everyone else." It’s based in a deep ignorance of the social, medical and geographic realities of how we are raised, the opportunities we are given or the geography we settle in. In Saskatchewan, where prosperity often has come because of the soil conditions of the homestead, we understand this.

Spending cuts are often deemed to be courageous and noble and at times they are. But so is ensuring the less fortunate are taken care of. We’ve always known that as a city and a province. I hope we won’t forget that, as others have.

Cutting our own wrists

Back in 2005 I saw a link to a review of Jared Diamond’s book Collapse on the New Yorker website. Malcolm Gladwell was telling the story of Norse settlers coming to Greenland a millennium ago and I found the story fascinating. Even to the Norse, Greenland was not a place that one would want to inhabit but on the southwest corner there are some Fjords that looked a lot like southern Norway and was a perfect place to settle so they got off the boats and set out to tame the land. For four hundred and fifty years they built two settlements, churches, traded with Europe and possibly even had a section of prime downtown real estate they couldn’t develop. They hunted seal, caribou and raised livestock and pets. Life was good and then one day it was all over. What happened?

Diamond’s book is full of stories of societal collapse. Easter Island, Mayans, and even the genocide in Rwanda but the Norse on is the one that I keep re-reading. Partly because I am part Norwegian but partly because I keep seeing those settlement’s demise being played out again and again today.

What happened in Greenland is what happened in most of the societies that Diamond looks at. The ecosystem was too fragile to support the population. The trees were chopped down for fuel, the soil erodes, the crops fail and society has to leave or ends up dying. He tells essentially the same story over and over again. Greenland wasn’t as green as the Norse thought it was and the same thing happened to them.

What is so odd about this chapter is that within feet of their shore is some of the best fishing grounds in the world. Diamond describes running into a tourist who had caught two Arctic Char with her bare hands so why did they not fish. For years archeologists have looked for the fish bones and no one has ever found them. They found tons of trash fully of garbage and livestock bones. When the pastures couldn’t support the cattle, the Norse ate the cattle, then their young (right down to the hoofs), and even their pets while ignoring a massive food supply right that was within feet of them. You could argue that maybe the Norse didn’t know any better but there was Inuit there but the Norse looked down at the Inuit and their hunting practices that probably would have saved their lives.

What does this have to do with today? Until last week I wasn’t that preoccupied with the U.S. debt ceiling. To be honest I was much more preoccupied with the NFL lockout. It never occurred to me that American politicians would allow the U.S. government to default on its debt. As the rhetoric flew in Washington, I realized it all sounded familiar. This isn’t about economics; this is about the survival of ideologies and political parties. In the same way the Norse wouldn’t fish, intermarry with the Inuit or even copy their ways of life because they were ranchers and because of cultural status, Republicans can’t make a deal because they can’t be seen raising taxes or Democrats can’t been seen cutting Social Security or Medicare. Michele Bachmann can’t compromise because that would alienate the Tea Party. John Boehner can’t compromise because then he looks weak. Obama can’t compromise or he’ll upset his base. They may push the United States into another recession but they won’t have compromised on their values.  It’s a pile of crap and the rest of the world in this case pays for it.

This is what bothers me about ideological arguments, they ignore the cost to people along the way.  Real leaders are not ideologues.  They are pragmatists who are capable of making hard decisions that go against their base.  In Saskatchewan how popular do you think it was for the NDP when they closed rural hospitals or cut the public sector in their efforts to reign in the Saskatchewan deficit?  In Alberta during the same time Ralph Klein instituted user fees on healthcare.  How popular were the Chretien budget cuts and austerity of the 1990s with Liberals.  So much for the short term vision of a just society.  While the Saskatchewan Party says it is a party of free market principles, they dug in (with the support of the NDP) to help save PotashCorp (an American company that for some reason we could not handle being taken over by an Australian company because that would be wrong for some reason).  Leaders decide to go fishing from time to time.  They also know they need to raise taxes to pay for a war in Afghanistan and Iraq, no matter what it does to their presidential aspirations or how much it hurts their base.

So why didn’t the Norse settlements eat Arctic Char (apparently it’s quite tasty, similar to rainbow trout)?  Because they were so concerned with the survival of their northern European culture, a culture of churches, cattle, and trade that they never could see there was an alternative way to act.  Why is the United States about to walk into financial Armageddon because Republican’s don’t raise taxes and Democrats don’t cut entitlements and they are both too stupid to realize that this polarization can’t continue.

As Gladwell points out,

The lesson of "Collapse" is that societies, as often as not, aren’t murdered. They commit suicide: they slit their wrists and then, in the course of many decades, stand by passively and watch themselves bleed to death.

I think I see blood on the floor.

Default: Bachmann vs Boehner

Joe Trippi & Paul Goldman writes in Politico

The debt ceiling issue is the first defining GOP presidential event because Bachmann is the only serious candidate with a vote in Congress. Tea party backers want to see her self-proclaimed “titanium spine.” If she plays it right, she can win huge. If not, she can become yet another fallen idol.

The Canadian rock group Bachman-Turner Overdrive scored big with “Takin’ Care of Business” back in the ’70s. Now Bachmann realizes that the wrong vote puts her out of business as a presidential aspirant.

President Barack Obama understands that default would inflict incalculable damage to the United States and add to the advantage of the nation’s foreign competitors. He is right to want to repeal unfair Bushonomics.

But let’s be honest: When Obama took office, the Democrats reneged on 2004 and 2008 platform promises to repeal Bushonomics — claiming the economic recovery was too fragile. Yet Democratic leaders attack Republicans as defending Bush’s “tax cuts for the rich” though the recovery is now even shakier.

No wonder Americans are cynical. Obama knows avoiding the economic damage from a default is of greater urgency than a fairness fix.

Bachmann’s tea party posse will not accept any agreement deemed dictated by the president. And GOP legislators, vulnerable to a primary challenge from the right, are understandably nervous about appearing to compromise with Obama.

Conservative columnist David Brooks writes from the GOP perspective and wonders if Republicans are even pretending to govern responsibly. 

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.

The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.

The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them that a default on the debt would have calamitous effects, far worse than raising tax revenues a bit. But the members of this movement refuse to believe it.

The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.

The members of this movement have no economic theory worthy of the name. Economists have identified many factors that contribute to economic growth, ranging from the productivity of the work force to the share of private savings that is available for private investment. Tax levels matter, but they are far from the only or even the most important factor.

But to members of this movement, tax levels are everything. Members of this tendency have taken a small piece of economic policy and turned it into a sacred fixation. They are willing to cut education and research to preserve tax expenditures. Manufacturing employment is cratering even as output rises, but members of this movement somehow believe such problems can be addressed so long as they continue to worship their idol.

Thoughts on Saskatoon

  • I was a little sad that the city decided to replace and not rebuild the Traffic Bridge.  It’s the last steel truss bridge of it’s type in North America and while I find it to be an eyesore, it’s Saskatoon’s eyesore.  I was going to make a comparison to Vancouver’s Lion’s Gate Bridge where the city did a massive rebuild and reconstruction of the bridge where it was widened and changed but you can’t do that to a truss bridge and at what time does the changes to the bridge mean that it’s no longer the original bridge.
  • The city needs to change the by-law regarding cyclists at night.  For $1.50 I bought a battery powered LED light for Mark, Wendy and my bikes from Dollarama.  After seeing numerous cyclists on city streets with no reflectors, lights (or helmets) after dark I am starting think that anyone riding in the dark at night should have to have a bike light, helmet, reflectors, or be heavily fined.  They just aren’t taking their own life into their own hands but riding like that endangers drivers and everyone else.  You can blame it on kids but last fall I just about hit two Saskatoon bike cops that ran a stop sign on Avenue H and about 23rd on their bike.  I had to lock up the van and while everyone was okay (and they apologized), even with me driving the speed limit and with reflective jackets on, it was hard to avoid them.  If it was a car, it would have been a fender bender but in this case, it could have been two dead cyclists.  I can’t count the amount of people I have seen with dark colors, nothing reflective, and no helmet at night.  I have no issues with more bike lanes but if cyclists are going to share the road with cars, they need to follow the rules of the road as well.  If they can’t, they can walk the bikes after dark.
  • Speaking of driving.  When the 30 km/h school zones came out, a friend railed against them in regards to high schools.  His feeling was that if you didn’t know how to jaywalk by the time you were 14, you shouldn’t be let out of the house.  Yesterday while driving home past Bedford Road Collegiate, a student walk out of the school and into incoming traffic and kept going.  Myself, the car behind me, and two incoming cars had to hit the brakes and swerve to avoid hitting her.  I was only driving 30 km/h and so was the car behind us but if the police are going to ticket anyone speeding through school zones (which is a good thing), they need to crack down on students jay walking.  The girl didn’t look before she stepped out and once she heard the tires skidding and the oncoming traffic swerve into our lane, she didn’t look up.  There very easily could have been a four car and one pedestrian accident and this happens lots in front of not only Bedford Road but also any street with a high school on it.
  • The city needs to ban lawn signs on public property.  While I haven’t looked the deeply into the issue, it doesn’t look like the grass on the Meewasin Valley or the boulevards in Ward Five delivered many votes at all.  No lawn signs on public property or abandoned lots.  It makes the city look horrible and cluttered.  It can’t be that hard to do.
  • Property taxes are going up again.  My mortgage payment when I bought my house was $400/month in 1999.  It’s 2011 and now it is approaching $600/month and no, I don’t have a sub prime variable rate mortgage.  All of that is property taxes.  I am not one of those that hate all taxes.  Richard Florida has done a lot of good work pointing out that livable cities often have higher taxes which makes sense.  Someone has to pay for the nice amenities that we all enjoy.  Taxes are cheaper in places like Warman and Martinsville but to be honest, I wouldn’t want to live in either one of those places.

Unemployed: The New Normal?

Disturbing article in the New York Times today about long term employment prospects in the United States.

The “new normal,” as it has come to be called on Wall Street, academia and CNBC, envisions an economy in which growth is too slow to bring down the unemployment rate, while the government is forced to intervene ever more forcefully in a struggling private sector. Stocks and bonds yield paltry returns, with better opportunities available for investors overseas.

If that sounds like the last three years, it should. Bill Gross and Mohamed El-Erian, who run the world’s largest bond fund, Pimco, and coined the phrase in this context, think the new normal has already begun and will last at least another three to five years.

The new normal challenges the optimism that’s been at the root of American success for decades, if not centuries. And if it is here, the new normal could force Democrats and Republicans to rethink their traditional approach to unemployment and other social problems.

Some unusual suspects, like Glenn Hubbard, dean of the Columbia Graduate School of Business and an economic adviser to George W. Bush, are talking about a new, expanded role for the government in addressing the problem. In particular, Mr. Hubbard favors investing more in education to retrain workers whose jobs are never coming back. “If there is a new normal, it’s more about the labor market than G.D.P.,” he said. “We have to help people face a new world.”

As Frank Rich points out in his NY Times column today, “16.5 percent of America’s workers are now either unemployed and trying to find a job, involuntarily working part time, or have stopped looking for work altogether.”  The prospects look even worse when you look at the financial shape of many municipalities and civic governments.

Faced with the steepest and longest decline in tax collections on record, state, county and city governments have resorted to major life-changing cuts in core services like education, transportation and public safety that, not too long ago, would have been unthinkable. And services in many areas could get worse before they get better.

The length of the downturn means that many places have used up all their budget gimmicks, cut services, raised taxes, spent their stimulus money — and remained in the hole. Even with Congress set to approve extra stimulus aid, some analysts say states are still facing huge shortfalls.

Cities and states are notorious for crying wolf around budget time, and for issuing dire warnings about draconian cuts that never seem to materialize. But the Great Recession has been different. Around the country, there have already been drastic cuts in core services like education, transportation and public safety, and there are likely to be more before the downturn ends. The cuts that have disrupted lives in Hawaii, Georgia and Colorado may be extreme, but they reflect the kinds of cuts being made nationwide, disrupting the lives of millions of people in ways large and small.

Of course there is also the impact on the American family.  While we tend to romanticize The Great Depression, it was a horrible experience for most families.

The poor are getting poorer, and the rich, despite stock-market setbacks, are still comparatively rich. The most devastating losses in household wealth over the past two years have been suffered by the middle class. And families are fraying at the seams. The Pew poll showed nearly half of people who had been unemployed for more than six months saying their family relationships had become strained, and a New York Times/CBS poll of unemployed adults last winter found about 40 percent saying they believed their joblessness was causing behavioral change in their children.

Parents who have jobs are working longer hours than ever. Mothers are taking shorter maternity leaves. The birth rate is on the decline. The divorce rate is declining, too — it’s too expensive for people to break up their households — but that’s not necessarily a family-friendly thing, as a report from the Council on Contemporary Families noted in April: “We know from the experience of the Great Depression of the 1930s that divorce rates can fall while family conflict and domestic violence rates rise.”

Saskatoon Spending at a Glance

Saskatoon in the fall

In case you are wondering how much more the City of Saskatoon has been spending since 2002, Sean Shaw has done some homework and created some visuals.  The operating, capital, and debt servicing budgets have all been heading upwards.  Coincidently enough, so have our taxes.

While no one likes to pay taxes, Richard Florida does point out that if they make a city more livable, most of us tolerate them if we see the value.  While the Lake Placid site at River Landing hasn’t worked out, River Landing was a tremendous home to the Saskatoon Fireworks Festival and has been a wonderful gathering place for thousands of us over the summer.  Infrastructure along Circle Drive created the auto mall which allowed for the redevelopment of 8th Street.  I think all of us agree that this makes the city a better place to live.  The question that we all struggle with is does it make it a good enough place to live to justify the year after year increase in taxes.

End Child Poverty

Ed Broadbent is speaking out on child poverty

Why is it that Finland, Sweden and Denmark have almost wiped out child poverty, and we have not? Why do more than 600,000 Canadian kids wake up hungry and go to school trying to read, write and think on an empty stomach?

First, we should have no illusions about where our poor children are to be found. Most are in families with two adults. Most poor adults work. Most of them have incomes so low that they can’t afford housing and can’t adequately feed or clothe their kids. If kids are members of aboriginal or immigrant Canadian families, the odds are even much greater that they will be poor.

Second, this poverty was not inevitable. Mostly it is the product of governments that have neither shared nor cared. As a Unicef report last Friday pointed out, Canadian politicians have failed our children. During the 1990s, the federal government abandoned a leadership role for Canada’s poor. It unilaterally cancelled the Canada Assistance Plan with the provinces, eliminated all low-cost housing programs, ceased to set the pattern for minimum wages and failed to bring in a national child-care program. Perhaps most serious and unbelievable of all, it exacerbated the inequality that was emerging in the marketplace by changing the income-tax system to the advantage of the richest Canadians.

I have blogged about this before but I am going to keep bringing this up because it’s a big issue.  I don’t know if I see how a tax increase on the rich will help the situation because I don’t see a plan for what the $3.7 billion can and will do.  While poverty is a financial issue, it’s also a bigger social issue and how does $3.7 billion do to change the impact of lives shaped by poverty.

Make Poverty History

I think the solution can be funded by churches, community groups, schools, and governments partnering together to remake neighborhoods, reserves, and communities as part of a long term process to take on the contributing factors of extreme poverty in Canada.  Providing better facilities for those who struggle with mental illness, reinvest in local schools, provide help (which may include incentives) to keep kids in schools longer (there are about 1500 truant kids in Saskatoon right now according to many sources), help those in low income jobs with affordable housing and subsidized rents and help them get ahead.  Poverty is a complex issue that gets oversimplified sometimes in political discussions.

  • One in six Canadian children is poor.
  • Canada’s child poverty rate of 15 percent is three times as high as the rates of Sweden, Norway or Finland.
  • Every month, 770,000 people in Canada use food banks. Forty percent of those relying on food banks are children. These statistics point to a betrayal of Canada’s children. What makes the persistence of child poverty all the more disturbing is that Canada is a rich country, a country that ranked fourth in the world on the 2004 UN Human Development Index.

But in the midst of wealth, almost 5 million Canadians live in poverty. Poverty is increasing for youth, workers, young families and immigrant and visible minority groups.  Why aren’t we getting together to tackle this issue? 

I am not sure Make Poverty History has the answers but sadly since 2005, the issue has disappeared off the radar when it was no longer the issue du jour.  Let’s move it back on the political radar.

Tax on wealthy to fight child poverty

Ed Broadbent is calling on a tax increase to fight child poverty

Broadbent, 73, said increasing their taxes from 29 per cent to 35 per cent would put billions more toward eliminating child poverty, increasing the amount spent by $3.7 billion.

“With just that single move we would double the amount given for the national child benefit supplement and take children out of the devastation of poverty,” he said during a speech at the University of New Brunswick.

He said it makes sense given that in the past decade only the richest in Canada have seen their wages go up beyond the cost of living.

Well first of all I don’t know if a six percent tax increase is the right number and from where I am, I see child poverty as a much more complex problem than doubling the national child benefit supplement but I kind of like Ed’s idea of using a focused tax to fight a specific problem.  Of course it never works that way in the end.  Our gas taxes don’t go to fixing up roads but go into general revenues.  Part of me has often wondered if you could designated a percentage of the GST, let’s say .25% and designate that to fight child poverty in Canada or if you made it broader, fight poverty and homelessness in general.  You could also designate a portion of “sin taxes” to it instead.  I know it won’t happen as we really aren’t that serious in Canada about fighting child poverty (which is the real issue) but not all taxes are bad and fighting child poverty and homelessness at a young age saves an awful lot amount of money down the road, money that could be used for tax cuts in other areas.