Social Programs and Social Programs and TaxationTaxation

What is a Social Program??

- services provided by the government to reduce economic inequalities and promote the well-being of citizens

Human Resources and Skills Development Canada

3. Health Care

1.Education and Training

4. Housing Assistance

2. Employment

http://www.servicecanada.gc.ca/eng/subjects/education/index.shtml

http://www.servicecanada.gc.ca/eng/subjects/employment/index.shtml

http://www.servicecanada.gc.ca/eng/subjects/health/index.shtml

http://www.servicecanada.gc.ca/eng/subjects/housing/index.shtml

5. Immigrationhttp://www.servicecanada.gc.ca/eng/subjects/immigrate/index.shtml

These services are free to Canadians…

7. Legal Assistance

6. Income Assistance

Continued…….

http://www.servicecanada.gc.ca/eng/subjects/benefits/index.shtml

8. Personal Documents

9. Savings Plans

10. Special Events

11. Starting a Business

12. Travel

right?

The “free” health care enjoyed by Canadians costs The “free” health care enjoyed by Canadians costs big bucks… where does the government get it?big bucks… where does the government get it?

Show me the money!Show me the money!

AllAll social programs are paid for by taxessocial programs are paid for by taxes

The ? is…… how many taxes should each citizen be expected to pay.

The ideals (values) of the government in control The ideals (values) of the government in control can determine which services will be offered and can determine which services will be offered and how many taxes will be assessed to citizens.how many taxes will be assessed to citizens.

Ex. Canada vs. U.S.Ex. Canada vs. U.S.

Healthcare Healthcare

- is a - is a publicpublic service provided by the Canadian gov’t service provided by the Canadian gov’t through taxesthrough taxes

- is a service paid for “out of pocket” by - is a service paid for “out of pocket” by citizens in the US and is provided by citizens in the US and is provided by

privateprivate business business

Let’s look at the example of………

Health insuranceHealth insurance

-Can be purchased in Canada

- used to provide extra services not provided by gov’t healthcare. Ex. Blue Cross

- US citizens need to get health care insurance to US citizens need to get health care insurance to ensure they can receive the care they need in the ensure they can receive the care they need in the event they become ill.event they become ill.- some people can’t afford to do thissome people can’t afford to do this

- an agreement by a company to pay for your - an agreement by a company to pay for your health services in exchange for a fee you pay every health services in exchange for a fee you pay every month, or yearmonth, or year

A Quick Note…..

Canada’s health care system has five principles…….

Public

Universal

Portable

Accessible

Comprehensive

– gov’t run

– available to everyone

– care provided by hospitals, physicians & surgeons

– available everywhere in Canada

- available within a reasonable time and distance

Which governmentWhich government handleshandles the bills?the bills?

- different social programs are covered by the different levels of - different social programs are covered by the different levels of government because under Canada’s constitution, each level of government because under Canada’s constitution, each level of government has different responsibilitiesgovernment has different responsibilities

Examples:Examples:Healthcare= ProvincialHealthcare= ProvincialEmployment insurance= Federal Employment insurance= Federal Child Care subsidies= possibly all levelsChild Care subsidies= possibly all levels

Social Programs in the U.S.Social Programs in the U.S.

Federal & State gov’ts can make legislation re: Federal & State gov’ts can make legislation re: social programs.social programs.

no differentiation of responsibilities as there is in no differentiation of responsibilities as there is in CanadaCanada..In general, federal laws take precedence.In general, federal laws take precedence.

U.S. gov’ts have found less reason to support U.S. gov’ts have found less reason to support social programs on the same level as Canada.social programs on the same level as Canada.

Tax Collection in Canada

Two kinds of taxes….

1. Income Tax

2. Sales Tax

Income Tax- based on a percentage of a Income Tax- based on a percentage of a person’s income… the more you earn, the person’s income… the more you earn, the more you paymore you pay

Sales Tax- paid at the time of buying a Sales Tax- paid at the time of buying a product or service, and based on a product or service, and based on a percentage of the pricepercentage of the price

GST- Goods and Services Tax; a GST- Goods and Services Tax; a federal sales tax in Canadafederal sales tax in Canada

What else do taxes pay for?What else do taxes pay for?

In Canada and Alberta, your tax money (yes, YOUR tax In Canada and Alberta, your tax money (yes, YOUR tax money) goes towards:money) goes towards:

– Recreation and cultureRecreation and culture– HealthHealth– EnvironmentEnvironment– EducationEducation– Debt reductionDebt reduction– Foreign affairs and aidForeign affairs and aid– TransportationTransportation– Social ProgramsSocial Programs– DefenseDefense– Resource ConservationResource Conservation

Taxation in CanadaTaxation in Canada

Taxation Model- a policy of a political party Taxation Model- a policy of a political party of government about what to tax, how of government about what to tax, how much to tax, and how to spend tax moneymuch to tax, and how to spend tax money

Tax base- all the economic activity in a Tax base- all the economic activity in a society, taxed by the government to pay society, taxed by the government to pay for servicesfor services

See taxation model in text p. 283See taxation model in text p. 283

Taxation in CanadaTaxation in Canada

Some people avoid paying taxes, or don’t Some people avoid paying taxes, or don’t tell the truth when they file taxes. This is tell the truth when they file taxes. This is called:called:

– Tax evasion: misrepresenting what you earn to avoid Tax evasion: misrepresenting what you earn to avoid paying taxpaying tax

This contributes to the “underground This contributes to the “underground economy” or “black market”economy” or “black market”

Why does that matter?Why does that matter?

Taxation in CanadaTaxation in Canada

Since the government uses the tax money Since the government uses the tax money to fund social programs, the more money, to fund social programs, the more money, the better. If you (or anyone else) hides the better. If you (or anyone else) hides money from the government, there is less money from the government, there is less money to be used that could potentially be money to be used that could potentially be to your benefit.to your benefit.

Government in the EconomyGovernment in the Economy

Along with social programs, we have seen that Along with social programs, we have seen that the government uses our tax money to fund the government uses our tax money to fund other ventures as well, and where they choose other ventures as well, and where they choose to put that money, may have different effects to put that money, may have different effects and consequences for the country or province.and consequences for the country or province.

Example: Canadian Film industry (ch. 6)Example: Canadian Film industry (ch. 6)

Example: Business subsidies or “bailouts” (ch. 6)Example: Business subsidies or “bailouts” (ch. 6)

Example: Labour Union Strike (health care;ch. 6)Example: Labour Union Strike (health care;ch. 6)