I’ve read a lot of stuff lately, some here and some in comments sections of other websites, where people are outraged that Obama is a … SOCIALIST. The word is being used like I would use “child molester” Socialism seems to be a Very Scary Thing.
Other people have made very serious comments, that if the socialist Obama gets into power, then United States is doomed. I mean, completely, doomed, ruined, destroyed. They say it with great passion, determination and, as far as I can tell, they believe what they say.
So, up to the North is a country that is very similar in many respects to the United States, except it is much more… Socialist. We have universal health care for all, a large social “safety net”, higher tax rates pretty much across the board. Our current government is “right of center”, which in US terms, is to the left of the Democrats. The opposition is to the left of them, and we also have a significant number of NDP members of Parliment who are so far to left, I think heads would explode if they were US politicians. We have all of the things that the people in the preceeding paragraph are terrified of.
And you know what? Canada is not falling apart. We’re actually doing pretty good. We have balanced the federal budget for 11 years in a row. The debt clock is running backwards. Unemployment rates are low, and the most recent jobs report is glowing.
Certainly there are problems - we’re not perfect. Far from it (just ask Sam Stone). But in a place that is much more “Socialist” than the most ardent democrat could imagine, things are not going to hell in a handcart.
Anyway, could someone please point out to these people that Canada has not gone down the slippery slope, and we won’t be turning Communist anytime in the forseeable future.
I guess it’s the “OH MY GOD! Well turn socialist if we raise the top tax bracket by 3%!!” thing that gets to me. In Canada, it’s called a policy discussion, not an excuse to go off the deep end.
And while I’m at it, “sharing the wealth” is not necessarily a dirty, nasty sentiment. Again, to use the example of your chilly cousins to the North, we tend to do more of it than you do, and we’re doing OK so far. (Mind you, it’s only been 140 years or so… what do we know eh?)
You might want to check your numbers. Overall, Canada has slightly higher taxes than the U.S., but our corporate tax rate is actually lower (33.5% in Canada, vs 40% in the U.S. And Canada is lowering its corporate tax rate to 15% by 2012). And as for ‘socialist’ tax structures, the U.S. actually has a more progressive tax system than we do, because we get a good chunk of our tax revenue from the GST and provincial sales taxes, which are not progressive at all. The income tax paid by an individual making the median income in Canada is 31.6%, whereas in the U.S. it’s 29.1%. The U.S. does have more deductions for families, however, giving them a median tax rate of 11.9% vs 21.5% in Canada.
Canada has no inheritance tax, and our capital gains taxes are lower in general.
Canada also has some of the highest excise and ‘sin’ taxes in the world, and we derive a pretty good chunk of tax revenue for it. This tax falls hardest on the poorer members of society, and is therefore quite regressive.
Overall, taxes in Canada are 33.4% of GDP, while in the U.S. they are 27.3% of GDP. Take away Canada’s 5% national sales tax, and they’re almost the same. Remove the sin taxes and gasoline taxes, and we’re probably just a touch lower than the U.S. And Canada’s taxes are going lower while the U.S.'s are going higher. And we just re-elected a Conservative government.
If Obama gets his tax increases, the U.S. is going to have an extremely non-competitive tax structure in terms of capital gains taxes and corporate taxes. The effective top tax bracket in the U.S. will be almost 50%, vs 41% in Canada. Coupled with a much more left-wing labor policy under the Employee Free Choice Act, certain to be signed into law if Obama is elected. And Canada is going to start looking like a Libertarian paradise compared to the U.S. That’s good for us, bad for America.
Even our National Health Care isn’t quite as different as the U.S.'s, because a good chunk of U.S. health dollars are consumed through Medicare and Medicaid and the Veteran’s administration, funded solely through government dollars.
If Obama is elected and manages to enact everything he says he wants to do, the U.S will actually be farther to the left than Canada in most economic measures. It will have a more progressive tax system, higher federal spending on health care, higher marginal tax rates, higher corporate tax rates, higher capital gains taxes, more regulations, possibly an inheritance tax, and a more left-wing labor policy. Obama’s refundable tax credits (i.e. welfare) will result in over 40% of low-income Americans paying no tax at all, while the top income brackets and corporations shoulder the burden. Oh, and you’re about to nationalize a bunch of banks, too, but you can’t blame that on Obama.
I’ll tell you why I fear socialism, it’s not that country to the north which is not socialist either politically or economically, it’s the one to the south which calls itself socialist. A common slogan in Havana walls in the 90’s was “¡Socialismo o Muerte!”, or Socialism or Death!, which almost daily was altered to read “Socialismo es Muerte”, or Socialism is Death, or sometimes more subtly someone would write on the sidewalk 'is there a difference?"
Socialism, at least as implemented in Cuba, is the most soul crushing kind of government I have ever seen.
That’s not the attitude at all, and I wish people would stop equating socialism with warm, caring selflessness and capitalism with cold selfishness. Most of us believe that people in general will be better off under their system, not just themselves.
Socialism forces people to part with their hard-earned money and give it to people who didn’t earn it. Where is the selflessness there? It also removes some of the incentive to earn money in the first place. I’m all for helping out the poor and downtrodden, I just don’t think it should be mandatory, especially when my money could have more impact if I was in charge of redistributing it myself.
A more free market approach could do more by raising standards of living across the board and making lives in general more dignified and livable. Not to mention that freedom for the masses is more important to me than food and shelter for the masses.
Frankly, I think it all comes down to risk versus reward. Socialists want to minimize risk, capitalists want to maximize reward. Both systems involve trade-offs, and neither side is ‘evil’. They just have different priorities.
Take this to its logical extreme. Let’s ‘share the wealth’ by redistributing it, worldwide, so everyone is even. Now, instead of 3/4 of the world starving, poor and wretched, everybody will be starving and wretched. How’s that for progress?
Excellent post. I would add one final point, or question, to it.
Which is more reversible? In other words, if you try something more socialized such as healthcare, education, bridge-building, alternative energy direction, etc. and you make a mistake (e.g ethanol mandates, any big-city public school system) is it easy to take it back and say ‘Whoops! That didn’t work. Let’s undo it.’? Are we as citizens empowered to do that?
When citizens disempower themselves and delegate responsibility for solving problems (as well as their money) to big governmental bureaucracies, and it doesn’t work, how do they correct it? If a hamburger stand sells a shitty product at too high of a price, it will go out of business quickly. The customers have that power.
Do we have that power as citizens? Do we want some of it back? Or are we actually pushing more and more power away from ourselves, onto governmental institutions, and asking them to ‘Do Something’?
Thanks for the analysis and numbers Sam Stone - I was hoping you’d drop by the thread!
Even if we’re not total socialist heathens up here, we can still serve as a good example of a country not falling apart when it has more socialist “tendencies”.
And I don’t think that there is a slippery slope between increasing taxes to a level they were at a few years ago that leads directly to “Look at Cuba! We don’t want to be like them!” Again, look at Canada. We’re not going to be like Cuba either. No slope.
Part of my point is… That’s what you already have in the USA. You’re already there - your system is set up with a safety net that will not allow people to starve or die in the streets of an illness because they did not earn enough money. I think this is a good thing.
I don’t believe that changing a few % on the tax the top earners pay does not make you “more Socialist”, nor will it inevitably lead to a communist state.
Theoretically, people have that power. It is actually probably the greatest thing about democracy, the power to make mistakes and change our minds. We don’t have to have all the answers now written down in stone. We can try things out and see if they work, tossing them aside when and if they fail. I think Prohibition is probably the most obvious example of this happening.
But I also think that people in general are reluctant to change. We’re all conservatives in that regard. We’d rather keep a sub-optimal status quo than take our chances on a risky change, even if that change is a change back to something we had before. Because we’re used to what we have now, and the world has changed. Who knows if what came before will work again? Besides, it couldn’t have been all that great or we wouldn’t have changed it in the first place.
So in general, it doesn’t seem that changes like you mention are undone all that often. Government gradually grows as we all get used to its presence and involvement in our lives. But it can’t keep growing forever. Some day government will be scaled back, or it least its growth will be halted. But it will take some fundamental changes in the our society’s outlook, and it won’t be a quick process. Unless, of course, it comes about through bloody revolt or something.
Actually Socialism forces rich people to part with a bit of their money (including inherited wealth they didn’t work for) and give it to people who desperately need it.
Hence the National Health Service in the UK, for example.
Actually most people are keen to be wealthy and will work hard to achieve it, even if they have to pay taxes.
And you may well be a charitable person, but sadly many people are not.
‘The rich man has the right to sleep in a mansion and the poor man has the right to sleep under a bridge.’
I used to know people that expected me to “share” my stuff with them out of friendship and they felt it was part of being a friend.
Not suprisingly, these people never had anything of their own worth sharing with others.
Having spent several years participating in on-line cancer support groups,I have to say socialized medicine scares the hell out of me. The level of care varies widely, mostly due to geography. I have seen cancer patients get NO care or treatment because there is not an oncologist practicing in their area. Second opinions are virtually unheard of. They only get one doctor, tops …and if the patient feels the treatment his doctor proposes is not the best one for him…too freakin’ bad. Imaging studies required for diagnosis of symptoms such as intestinal blockages have month’s long waiting lists, while US patients can get the tests the same day.
And if there is a treatment that is not curative but stands a 10% chance of giving a patient a one year remission (a common situation in advanced solid tumor cancers) and that treatment costs 20K a month, the patient isn’t going to get to try it.
And you don’t get to sue.
As one Canadian oncologist explained it once…if we just gave all these treatments away we wouldn’t have money for roads and police.
The Brits and Canadians ( especially Canadians ) seem really complacent about this stuff but I can’t imagine Americans standing for it.
Canada doesn’t really have the same sort of racial underclass that the United States does. Perhaps this underclass is kept down by white racism; perhaps by genetics – but these people are around and one should not assume that policies which work in Canada will also work in the United States.
I don’t know a lot about national health care, but I do know a lot about gun control and I’ve become very sceptical of these sorts of comparisons between different nations or different states. As far as gun laws and crime go, demographics matter. I fear the same is true with socialism.
True. I’m explaining why people might not want the US to become any more socialist, not why it isn’t at all socialist now. Depending on your definitions, all countries are socialist because they all have governments, mostly paid for by its wealthier citizens, set up to benefit society, specifically minorities, the poor, and others who don’t have much power to leverage for themselves.
Unless you define “Socialist” as some sort of rigorous by-the-book system of government, like Communism, there is going to be a sliding scale from “less socialist” to “more socialist”. Taxing the wealthy a little bit more, in order to help the lower class a little bit more, is a little bit “more socialist”. It may or may not be a bad thing based on your perspective, but you can’t deny that’s what it is.
I guess the US was run by left wing commie pinko socialists from 1932 to 1987 then.
And 1993 - 2000 with a top marginal tax rate of 39.6%. Ah, I can remember the horror of that time, with the Marxist/Leninists marching openly in the streets.
I would agree with your sliding scale theory. That’s why I roll my eyes when people (Including Palin!) portray a very small , little move to change tax rates as OMG!! END OF THE WORLD!!! SOCIALISTS!! They’re climbing up my leg! I just saw one peeping out of my wife’s blouse!!!
