Social Programs and Taxation in Canada and the US
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Presentation Transcript
Social Programs Focus Question: How do decisions about social programs and taxation in Canada and the US attempt to meet the needs of citizens?
Social Programs • Social programs are services provided by the government and paid for by taxes • Their goal is to reduce economic inequalities and promote the well being of citizens • There are differing opinions on what constitutes a social program • Health care, pensions for senior citizens, income assistance, education, affordable housing, child protection services, employment insurance, child care and other programs supported by a government • Three areas of focus for us will be: • Health care • Pensions for senior citizens • Income assistance • The decisions of governments to provide (or not provide) social programs comes from many different factors • Economic philosophies • Different values
Sweden – Too Many Social Programs? • “In Sweden, new parents get 480 days of parental leave and a child allowance from the state. There is free day-care offered from age 1, and a free primary and secondary school system that promotes democratic values. School lunches are free for all students. University and post-graduate studies are free. Healthcare and dental coverage is high quality and universal, and patients choose their doctors. A public pension system reserves a portion of your income for retirement. There is an efficient public transportation system of metros, streetcars, buses, and commuter trains.” • “Sweden pays for its social welfare system through one of the highest tax rates in the world. The people we talked to saw paying in as part of their self-interest. Everyone pays in, and everyone gets back.” • - Mike Medow, Director of Allied Media Projects in Detroit • http://blog.gmfus.org/2013/12/18/swedens-social-welfare-system-up-close/
Health Care • Canada has public health care • Public funds (taxes) pay for it • It is considered a necessity • The United States has private health care • Individual citizens cover the cost of their own medical needs • Health care is considered a business, where profit is a goal • Many Americans buy (or receive) health insurance to cover some of the costs of medical expenses • Everyone may not be able to afford it, however • Gov't has Medicaid & Medicare Discussion Question: Which form of health care do you think is more effective? Why? Do you have any experiences to draw upon?
Government Responsibilities • Because Canada follows a Federalist system, both the provincial and federal governments provide social programs • Provinces have the responsibility to supply health care to their residents • That's why funding and programs can differ by province • Allows for unique perspectives and needs • BUT, because the federal government has the catch-all “peace, order and good government” it can pass laws which affect how provinces provide health care • The American constitution allows both federal and state governments to create laws regarding social programs • Specific responsibilities are not addressed, however • In general, federal laws determine the principles regarding social programs
The Canada Health Act is federal legislation which created 5 principles for health care in Canada in 1984 • Every province and territory must abide by them • Publicly Administered: run by the government and is not for profit • Comprehensive: it must look into all your health needs • Universal: everyone is allowed to access it • Portable: is available everywhere in Canada • Accessible: available within a reasonable time and distance • These 5 principles apply to all hospitals, physicians and surgeons • Dental care and eye care and other health related services are NOT included
Private vs. Public Debate - Videos • http://www.youtube.com/watch?v=48gvhlZTqtM • http://www.cbc.ca/news/world/toronto-s-dr-danielle-martin-educates-u-s-senators-on-canadian-health-care-1.2570872
Taxation • Social programs are funded by taxpayers' dollars • Both the federal and provincial governments collect taxes from residents • The federal government gives some to the provinces • Canada Health Transfer • Canada Social Transfer • Citizens of Canada pay two main types of tax • Income Tax • Sales Tax
Sales and Income Tax • Income Tax: This is a tax which is based on how much money you earn • They more money you make, the more taxes you pay • Sales Tax: This is a tax that is added on to products that you buy • The more products you buy, the more sales tax you pay • Everyone in Canada pays the Goods and Services Tax (GST) • It is currently set at 5% • Provinces can choose to add a Provincial Sales Tax (PST) • Some provinces have a Harmonized Sales Tax (HST) • Canadian families paid, on average, 17% of their income to taxes in 2005 • The median income of families in 2005 was $67,000
Tax Brackets • Taxes are calculated using a bracket system • You fall into a certain “tax bracket” depending on how much income you earn annually • The higher your bracket, the higher percentage of taxes you will pay • Taxes are generally taken off each pay by your employer, but the rate is up to you • This could lead to a refund or balance 2015 Tax Rates:http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
Taxation Models • A taxation model shows a policy which describes: • What to tax • How much to tax
Tax Evasion • Canada's government(s) spend a lot of tax dollars on social programs • Because of this, tax evasion can be a serious issue • Misrepresenting what you earn to avoid paying, or paying less, tax • Tax evasion is against the law • You have to make a legal tax return • The economic activity (people, businesses) that the government taxes is referred to as the tax base • The tax base it what pays for social programs and other services • If you do not report your economic activity, you are committing tax evasion • The people who work in a country and do not pay taxes are part of what is termed the underground economy or the black market • Generally, people perform tax evasion for legal reasons
Tax Dodgers - Video • http://www.youtube.com/watch?v=YMtG3JXrwFc
