From: cbbrowne@csi.uottawa.ca (Christopher Browne)
Subject: Re: Deficit, Deficit, who's got the Deficit? was: NDP "communism?"
Organization: Dept. of Computer Science, University of Ottawa
Date: Mon, 25 Jan 93 18:20:08 GMT

In article <jstewart.727977919@cunews> jstewart@alfred.carleton.ca (John Stewart) writes:
>In <C1Epw1.IAH@mach1.wlu.ca> dmccrea6@mach1.wlu.ca (doug mccready F) writes:
>>Well, I have just explained where his comments are wrong. Sorry, the federal
>>government has a formula based on tax revenues for equlaization grants - it
>>has a formula for EPF and they have not changed the formula. The formula
>>works to hepl poorer provinces but Ontario still does not qualify. There is
>>sympathy and the numbers aren't fixed in stone - the formula is. Therefore,
>>you are wrong and RAe cannot be supported.
>> 
>>The formula for equalization is based on the tax collections of 29 revenue
>>sources (see my textbook for the 29 taxes) and measures it against the
>>potential revenues if the base was average to determine what the payment
>>will be - Ontario does not qualify.
>
>Whatever statistics you can pull out of a hat to show that Ontario is
>still a rich province don't change the reality that my wife and I 
>see when we look at our family budget. In spite of an above average
>income there is nothing left after we pay our taxes, the mortgage, and
>other basic expenses (food, clothing, heat, lighting).  We are just 
>praying that the car lasts another three years at which point the children
>will be in school and my wife can get a job.  Our situation is by
>no means unique, many families in Ontario have had their budgets 
>stretched to the breaking point by tax increases -- primarily Federal
>tax increases.  It's a myth that Ontario is still rich enough
>to subsidize the poorer provinces.

As Doug already mentioned, equalization payments amount to
approximately one third of the Federal budget.  Those payments have
been increasing by between 10% and 15% per year, for quite a while
now.  In order for the Feds to be able to continue this increase, YOUR
TAXES have to rise by between 3% and 5% every year, just to cover
transfer payments.  That ignores any growth in costs at the Federal
level.

It's a simple FACT.  If provincial spending is going to increase by
15%, then that 15% has got to come from somewhere.  It comes either
from provincial taxes, in which case that Bob Rae hits YOUR wallet, or
Federal transfers, which means that Don Maz. hits YOUR wallet.
There's no third choice.  (Other than that Mayor Holtzmann or Regional
Chair Whatshisname hits your wallet.)

If the transfer payments were kept at their exponential increase,
you'd still pay, through GREATLY increased Federal taxes.  There's
been some bad increases lately, but it could be WORSE, believe it or
not.

>I think the problem is that your fancy equalization formula doesn't
>take into account the higher expenses of living in Ontario.  We 
>would need a lot less money to attain the same livestyle in one of
>the poorer provinces.

If on balance, you feel that you can attain a BETTER lifestyle in
another province, then it's probably a good idea to go there.  Of
course, by moving to a poorer province, you might correspondingly have
to take a pay cut.  You may not be able to "win," no matter what you
do.

People can't do everything that they'd like to.  Figuring out what to
give up is the toughest choice.

-- 
Christopher Browne                |     PGP 2.0 key available
cbbrowne@csi.uottawa.ca           |======================================
University of Ottawa              | Genius may have its limitations, but
Master of System Science Program  | stupidity is not thus handicapped.
Newsgroups: can.politics,soc.culture.canada