Chapter 6 Comp

• Canada is as a "socialist" country: Mix of public and private businesses. Crown Corporation. Ultimate goal is economic growth.
• Crown Corporation: Publicly owned companies ex. Canada Post, CBC. Developed for: company providence an essential service. Company provides a service that would otherwise not be provided as it is not profitable.
• The ultimate goal the government has to achieve economic growth is the use of taxes.
• What is the main goal of Canada's Tax Policy?

  main goal is a redistribution of wealth Canadians.
• Canada's Tax policy: Taxes allow the government to provide for/pay for social programs. Social programs and taxes to favor the less wealthy.
• Social programs 2 perspectives: Very wealthy pay the most in taxes and receive the fewest benefits or the very wealthy have the best accountants and avoid paying taxes and benefit on the back of the middle class.
• Types of Taxes: Consumer tax, property tax and income tax
• Consumer tax: GST - 5% tax on service/product you receive. PST - is another similar tax (provincial). GST Rebates are issued by the government.
• Property Tax: Local tax that is paid once a year, based off a percent of the value of the property a person owns. City related services are paid by property tax.
• Income Tax: Determined by a person's yearly income. Provincial and federal income tax. Federally there is a progressive income tax.
• Progressive Income tax: the more a person makes, the higher the percentage they pay taxes. Harms the people who are working harder.
• Regressive tax: Flat tax disproportionately hurts the poor 5% for the rich is nothing, but 5% for the poor is a lot of money
• Progressive income tax against: It punishes the individual for working harder
• Income tax: There are proponents of a flat tax - everyone pays the same percentage regardless of the amount earned. True equality does not discourage people from working harder.
• what is the biggest argument against flat tax?

  The poor pay more taxes than perhaps they can afford.
• Flat tax can also be called regressive tax - as it unfairly burdens the poor tax collected by the government in less, which leads to cuts in social programs
• Alberta was the only province up until the election of the NDP tha used a flat tax - now the province also has a progressive tax
• Those who are wealthy are more likely to find tax loopholes and pay less taxes. Regardless of ta type a business can reduce the corporate tax through tax loopholes/business expenses
• Universality- Applies to everyone regardless of income.
• Social Programs Canada - Health care, Education, CPP Pension
• Health care Canada - Doctor check ups, Emergencies, Medically necessary procedures. Not covered - dental, eyecare, non-elective surgeries, ambulances, prescriptions
• Education Canada - k-12 is covered for tuition and books. No covered - daycare for before and after school and post-secondary education.
• CPP Pension canada - Universal at age 65, although you can take it out earlier. No indexed (tied inflation) the pension does not increase with inflation (cost of living). OAS (supplement paid for lower income seniors). More coverage for dental eyecare, etc.
• Sweden - Welfare capitalism and mixed economy. Mix of public (15%) and private (85%). Companies are publicly owned for specific reasons.
• What are the reasons Sweden has publicly owned companies. To: maintain high levels of employment, Business that provides a service that would not be profitable business, communication, healthcare/education
• Sweden Indicative Planning - Uniquely Swedish. Once a year they come out with an economic plan. Provides predictions/projections of the government's plan. Private businesses can follow it or not at their own discretion.
• Sweden Social Programs - "From cradle to grave" Most extensive social programs in the world. Healthcare: dental is partial, everything is covered. Education: Post-secondary is paid as well. Pension: index and starts at age 61. Taxation: highest taxes in the world, so high that the very rich move out of sweden (tax evasion)
• The scandinavian "third way" economic model of democratic socialism- combining the wealth creation of capitalism with the safety net of socialism - works well
• USA taxation - Progressive taxation
• USA Social Programs /Social Policy: Three goals: Protect against risk and insecurity, promote equal opportunity, assist the poor
• In the US they preferred: Individualism, private charities, "Pull yourself up by the bootstraps"
• After the New deal the US government: social security, medicare, temporary welfare benefits, education