Path: utzoo!utgpu!utfyzx!alias!kpicott
From: kpicott@alias.UUCP (Socrates)
Newsgroups: can.general
Subject: Re: Flat-Rate Tax
Message-ID: <468@alias.UUCP>
Date: 27 Sep 89 13:03:56 GMT
References: <1989Sep26.102844.6519@gpu.utcs.utoronto.ca>
Reply-To: kpicott%alias@csri.toronto.edu (Socrates)
Organization: Alias Research Inc.
Lines: 37

In article <1989Sep26.102844.6519@gpu.utcs.utoronto.ca> golchowy@gpu.utcs.UUCP (Gerald Olchowy) writes:
>2)I do agree that this is a bias for investment over consumption...
>but (IMHO) this is what the North American economy desparately needs.

I have to agree and disagree with this point.  Yes, the economy desperately
needs this bias.  No, the GST will not help it.  Someday the government will
learn that increasing tax rates will only get more and more grumbling from
the population at large, but they will STILL continue to pay it until it
becomes physically impossible (witness the taxes on liquor, cigarettes and
gasoline if you do not believe this).

So how do we create the bias?  To do this we need ("we" as in "Canada") to
look at why people go into investment in the first place.  It might be
an entrepeneurial drive, a flair for the financial, or just an earnest
desire to improve one's lot in life.  But now the government is teaching us,
through extended social aid (the state of which is a different topic
entirely) that if we do not take care of ourselves, the government will
handle it for us.  (Notice I say "do not" and not "can not".)  This provides
an intrinsic security (like "job" security, only broader; maybe "existence"
security?) that makes people unwilling to take chances in the investment
arena, because it is not necessary for them.

We now have the government presenting us with two sides of the same issue.
(One might say this is hypocritical, but I don't think that an organization
can have this characteristic.  It's more like "the right hand doesn't know
what the left hand is doing".)  Human nature, being what it is, will
naturally guide us to the easiest path; that of not investing and trying to
grab all of the security we can get.

IMHO if the government wants to stimulate investment they should do it not
through over-taxation, but by spreading the message that the greatest risk
is in seeking security.  Complacency is the enemy, and taxation is not the
solution; it is the aspirin for headaches, the coffee for waking up in the
morning, the valium for going to sleep at night.  (If anyone wants to
convince me that these are good things I'd be happy to hear your opinion.)

Hey B.M.;  fix the cause and not the effect!