I don't remember much from my Economics 10 class except the "invisible hand" of Adam Smith. What I have learned over the years is that what happens to the economy in the short run doesn't have a whole lot to do with whatever our elected leaders chose to impose on us. There are factors out there that often negate the tinkering that politicians think they have to do.
I'm not saying all economic policy is bad policy except perhaps in the case of this administration which seems to be bent on rewarding the really, really rich at the expense of everyone else.
Canada is not known as a land of few taxes so assuming that the current theory of giving the rich much better tax rates and minimizing taxes is a sound theory, then Canada should be doing a lot worse than the US since a quick glance at these tables will frighten most Americans especially since there is no mortgage interest deduction in Canada.
On top of that Canada has national and provincial sales taxes as detailed in this from VIA Rail Canada.
Canada's national goods and services tax (GST in English, TPS in French) is fixed at 7%. In most provinces, a provincial sales tax of between 7% and 10% (PST) is also added to the cost of various goods and services. In Newfoundland and Labrador, Nova Scotia, New Brunswick, the national and provincial sales taxes have been replaced by a harmonized tax of 15% known as HST in English...
Deductions from income aren't much better. This comes from a petition at the Canadian Taxpayer's Federation.
The basic personal income tax exemption (BPE) in 2005 for Canadian taxpayers is $8,148. This means that only the first $8,148 of income is tax free. Canada’s BPE is one of the stingiest in the industrialized world. A minimum wage employee pays tax on almost half of their income!
According to this information gas prices are also higher in Canada mostly because of much higher tax.
With gas prices soaring, you might be tempted to think Americans are paying the highest prices on earth. You'd be wrong.
In fact, Americans pay among the lowest retail gas prices per gallon of any country, excluding oil producing countries like Kuwait and Venezuela.
Why? In part because of gas taxes, which are significantly lower in the U.S. than in Europe or Asia, for example.
According to the Canadian Broadcasting Company, gas prices are almost always lower in the U.S. than in Canada, where taxes represent about 38 percent of the cost
So it is pretty cleared Canadians are heavily taxed for that they get universal health care, probably a bigger safety net in times of unemployment, and a military that is mainly focused on peace keeping missions. It has been eighteen years since we moved back from Canada so I can't really comment on the standard of living compared to the US but that isn't the point of this post.
My point is that if minimizing taxes for the rich drives economic activity, then Canada should be going in the opposite direction of the US economy. If that's not happening then likely the economic stimulus that we have seen likely has been caused by something other than the great tax giveaway to the rich.
I'll just provide a few quotes from an article in today's Toronto Star and let everyone judge if the billions upon billions of debt that our national policies of rewarding the super rich, the lobbyists, and the corporations is creating a better economy which doesn't seem to let us afford something as basic as national health care like Canada has.
Another wave of full-time hiring in June has helped drive Canada's unemployment rate back to a low posted only twice before in 30 years...
Canada's unemployment rate dipped to 6.7 per cent, from 6.8 per cent in May, returning to the low reached in March 1976 and again in June 2000, when the economy was posting blistering growth. Moreover, all of the job growth was in the private sector. Governments shed 5,000 employees last month.
Hiring was concentrated among goods producers, led by 20,700 construction workers. Even the battered manufacturing sector added 6,100 people to payrolls, rekindling hopes the worst of the impact of the stronger currency is over...
The strong jobs data helped the Canadian dollar extend its winning streak to three days. It ended yesterday at 82.01 cents (U.S.), up 0.63 cents.
The currency also benefited from the foreign-exchange market's disappointment that the U.S. jobs numbers for June came in lower than expected
I'm certainly not advocating going to Canadian tax rates by any means, but just maybe we ought to back off on the rewards to the super rich and the corporations and lobbyists who now seem to control our government policy. Of course we could just keep borrowing and let our kids pay it off.
If nothing else we should realize that all the economic tinkering is just that tinkering which often is used to reward the friends of those in power.