New Tax Policies May Aggravate Gap Between Rich and Poor: A Recipe for Risotto

30 05 2011

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Key Points:

– In most recent years, Canada has been experiencing among the highest rates of gap expansion. Meaning that the distance between the rich and poor is gaining significantly.

– Between 2005 to 2009, the total monetary wealth that the top 3.8% of Canadian households controlled jumped from 60.6% to 66.6% and is estimated to head to over 70% in 2018.

– Despite this, as well as a 30 Billion Dollar deficit, Stephen Harper plans on making even more corporate tax breaks, costing an estimated 6 billion dollars in forgone revenues for next year.

– This “trickle down economic” theory states that companies with tax breaks will use that money on machinery, making new jobs, among other things that give back to the country’s economy.

– This sounds good on paper but the majority of Canadian companies, despite extensive tax reductions, have been reluctant in recent years to make the investments in machinery and equipment needed to strengthen the country’s economic prowess.

Questions:

1) What do you believe should be the right gap between rich and poor? Smaller, or larger? Should the richer control more or less and why?

2) How do you propose the government taxes citizens and should it change?

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3 responses

1 06 2011
bgray8

1. I believe that the gap between rich and poor should be somewhat midway. If the rich had too much power than there would be little money regulation towards the poor, and if the power was distributed too evenly than there would be absolutely no benefit to being rich and having all of this money. I believe that the most fair scenario would be for the rich to have more power as a reward, but not a large enough amount that they take from the poor.

1 06 2011
Kiruban

1. It would definitely be fair to have a middle gap between the rich and the poor. A large gap would cause chaos as the rich would have an over abundance of cash. This can lead to poor money decisions from the excitement of having a large excess of money. Firms can be persuaded in the lavish lifestyle and spend on luxury cars, jets, e.t.c. Also, the poor would have to struggle more since they are gaining lower money. If there’s a small gap, the economy would be unstable as there would be no one in power. This leads to lower investments towards businesses. A fair gap would make a stable economy, one that would create decent consumer spending and investments by businesses.

2 06 2011
Heshani Makalande

2. The government taxes their citizens based on their income levels. For example if a person is earning a higher income he/her has to pay a large percentage of its as taxes, whereas low income earners pay a smaller percentage of their income. This is fair to an certain extent because government provides us with other benefits. Thus, i believe in order to continue the welfare benefits, health care, free education etc the government should tax its citizens based on their income levels which is currently happening in Canada and it shouldn’t change.

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