Health Care: Needs-based Canadian Funding. Remote Essential Services Funding. School tax reform.
All Provinces and Territories Health Care Insurancevia new line #425 on Canada income tax return
Sent to all Canadian Premiers, Provincial and Territorial and Federal Health and Finance Ministers and Dep Prime Minister, copied to First Nations chiefs, December 2, 2019.
-could replace "Equalization" formula, and also enables "PharmaCare"
-younger persons require less public health care and thus would pay lower tax rate
-wealth plus income are both taxable for health care, easing relative burden on the poor.
Following was first sent to Manitoba and Canada Ministers in December. 2016.
Now, in late 2019, this funding source would also enable national Pharmacare to cover essential drug prescriptions.
Proposed changes to the Canada Income Tax and Benefits Return:
1. Line 420: "Net federal tax"
- Lower the federal tax rate as needed to account for removal from it of all federal transfers to provinces for health care
2. Add a new Line 425: "All Provinces' and Territories' health care insurance"(having a distinct print colour different from the provincial tax line)
- Set this tax rate (in the first year) such that it replaces the total amount the federal tax is lowered, so the change is revenue neutral in the first year.
- After the first year, the provinces annually decide, by majority vote, what the health care tax rate should be, but the federal government retains the option to cap the health tax rate at a maximum rate.
This dedicated health care tax collected is then entirely forwarded to the Provinces and Territories and First Nations, but distributed among them in accordance with the relative health care needs of each, based principally on population and age distribution of the population in each jurisdiction.
- Prior year's national health care data is used by the Federal Government to calculate the average relative health care service cost requirement for each age of persons, in general being a higher cost for older persons. However other relative adjustments could be added, such as a higher health service cost per pregnant person or per new infant.
- Relative payments to jurisdictions thus vary annually with the relative health care needs and population of each jurisdiction.
The health care tax rate would also vary with the age of the taxpayer. Older persons would pay a higher rate than younger persons, because their risk of needing health care services is higher, and because younger persons may have an accidental death, and thus not have the privilege of living to be an older person typically drawing more heavily upon government health care funding. The age of retirement and all older ages, could be set as the full rate level for the health care tax, with a simple linear tax rate reduction for younger persons. A 25 year old would thus pay 25/65 = 38% of the rate paid by a 65 year or older person.
A wealth factor should also be included, to ensure that wealthy persons who happen to have low income, are also required to pay health care tax similar to high income earners:
- exclude personal residence from wealth determination to ensure seniors in their own homes would not be cash stressed as a result of this tax line;
- use the Bank of Canada interest rate to determine deemed possible annual income if the person's assets were converted into income earning assets.
3. Line 428: "Provincial or territorial tax"
- This initially remains unchanged, as set by each province and territory, but would likely decline as each may choose to shift more emphasis onto the new line 425 for their heath care revenue.
Federal government achieves political freedom from taxing responsibility for health care, and could implement this change unilaterally to expedite.
Provinces and Territories achieve greater collective control over total health care funding.
Provinces and Territories and First Nations retain independence for health care expenditure decisions, achieving diversity of approach to enable learning from each other.
- Only federal string attached might be that jurisdictions must annually spend the funds received on universal public health care services or investments.
Canada thus achieves an automatic "Equalization" regarding the federal funding of health care.
- Funding is raised from income across Canada, and then distributed according to need across Canada.
- Health care can thus be removed from the calculation of other equalization needs among provinces.
Provinces, Territories and First Nations and the public are assured of enduring federal tax collection and fair allocation, via a visible mechanism, ensuring secure long term funding.
Canadians achieve greater equity of funding for health care service needs in all regions, automatically adjusting for relative demographic and income changes among regions.
BSc Agric, MSc Food
homestead grain farmer, organic winery
Upper Pembina, Earth (SWManitoba)
REMOTE ESSENTIAL SERVICES via PROPERTY TAX EQUALIZATION - to CORRECT DISPARITY
Essential public services, such as the provision of safe drinking water, safe removal of disease-harboring body excrements, emergency control of fire, and criminal law policing, are generally administered and paid for by local municipal-level governments from property taxes, yet not all local governments have access to adequate tax base property assessments to raise sufficient revenues to provide these services.
News reports often highlight this deficiency especially in some northern communities in Canada where there are low property values and no industries with taxable physical assets. Yet other municipalities in Canada have very rich property value assessments, such as from railways, office towers, affluent homes, manufacturing plants, etc, and can easily prioritize available property tax revenue to fund essential services to keep their citizens healthy and safe.
It is not the fault of any citizen born into any community, nor of its elected council, that it may lack sufficient property tax base assessment to enable essential public services to ensure public safety. It is never the fault of local citizens if a mining industry shuts down, or the world price of grain collapses, or the automobile assembly industry relocates, resulting in decline of local property valuations and ability to pay taxes. Yet other citizens are fortuitously born or move to communities accidentally blessed with abundant property value assessments with surplus industry capacity to fund local essential services, due only to arbitrary historical municipal boundary lines.
Yet it would be in the vested interest of all Canadians for all of our citizens to become content for their region to stay within Canada, confident that all Canadians together will ensure the basic essential public services for all citizens in all communities. (I imagine citizens in the far north could be enticed to favour their region being rescued from Canada's neglect if another country was to offer adequate funding to ensure essential public services. Similarly, citizens of neglected rust-belt cities will be incapable of and perhaps enticed to not cleanse themselves of criminal activities that provide income if they perceive themselves abandoned by the rest of Canada.)
PROPOSAL: National (or Provincial) Essential Services Equalization:
Replace base municipal tax assessment, with provincial or national tax assessment of all real estate property at an equal rate based on the value of property, to raise minimal funding to provide for essential water, sewer, fire safety and policing services to all communities in Canada (or within the Province). The funds would be entirely re-distributed back to municipal-level and indigenous-level local governments principally on a per capital basis to cover only the costs of essential services, with local expenditure decision-making. Generally, taxes on big city office towers would rise a little, and taxes on average homes would decline, with all properties contributing uniformly for all of our citizenry.
Higher than average per capital allocations to communities facing more challenging costs could be allowed, up to arbitrarily 5 times the national average cost conditional upon the principal that the least cost sustainable service option be selected - for example, communities built on rock might most efficiently be serviced with home delivery of drinking water and collection of composted excrement; for example, communities surrounded by forest might employ goat grazing services to reduce buildup of excess fuel to ensure fire safety.
All citizens in communities across Canada would thus be assured basic provision of safety via adequate funding of their local governments.
This policy would appeal to bleeding heart political philosophies, as well as to shrewd economic philosophies given prevention is cheaper than the predictable high cost of policing after criminality commences in rust-belt slums due to inadequate local tax base. This would avoid the very high cost of international war to prevent possible secession of the northern archipelago as a result of disaffection for Canada in remote hinterland communities (due to unsafe drinking water) being exploited by expansionist foreign countries willing to buy allegiance by paying the relatively small costs for basic essential public services for many of Canada's currently neglected remote communities.
April 26, 2018
EDUCATION PROPERTY TAX REFORM - to CORRECT DISPARITY
The Issue in Manitoba:
Farms involved in the U-pick industry, such as U-Pick strawberry farms, need to locate near to urban areas to conveniently serve large populations, and must therefore purchase typically very expensive farmlands due to proximity to cities.
The education tax burden is unfairly born by such U-Pick farm owners due to the tax being assessed in direct proportion to real estate assessed value, This is unfair between them and other non-U-pick farmers who can own cheaper lands more distant from cities, and also unfair between them and all non-farmers in society who typically own much less real estate of much less value and thus are assessed much less education tax as individuals, even though their personal net worth might be higher just not invested in real estate subject to education tax.
The Contrary Issue:
However, some farmland adjacent to cities is bought by investors, not for the purpose of personally earning a living via the work of farming it, but as an investment vehicle, same as if purchasing an office building to gain rent from it and to speculate that its value will increase. Others in society would not reason it fair for such persons to be exempt from education tax assessment if they invested in farmland instead of in office buildings. Similarly, although very large grain farms may be owned by individuals for the apparent purpose of earning a livelihood, the large tracts of farmland typically also serve and are acquired as investment vehicles of very wealthy persons who happen to be farmers, and much of the work is actually done by employees or supply and service contractors who are prevented from participation in the speculative capital gain by lack of ownership of the land on which they work as farm labourers, and generally precluded from purchasing their own farms due to bank lending practices favouring concentration of farmlands ownership (explained at grantrigby.ca - entrepreneurs credit union article).
Proposed Reform of Farmland Education Tax:
Exempt smaller farmland holdings that are owner-operated farms from education tax. On the Prairies, it would be reasonable to exempt up to one section (four quarter sections) of farmland per person owning it who also personally actively farms it, from education tax. Education tax would still be assessed against the assessed value of the residence and other buildings, same as for other non-farming members of society. This ensures that typically lower and middle-class wealth farmers who must purchase farmland to earn a livelihood are not assessed a greater share of society's education tax burden than for example a trucker who must purchase a machine to earn a living. It also achieves a favoritism for the socially and rural economically valuable objectives of reversing the concentration of farmland ownership and creating a greater number and diversity of independent owner-operated businesses and more families strengthened by the security of farmland real estate equity.
Defer education tax from all farmland commencing now, until the date it is sold, and then assess the education tax rate in effect then, only against its real capital gain (in excess of monetary inflation) between now and then, applied for each year of the deferral from now until then, but only against 50% of the total capital gain (presumes the gain was linear over the years). This ensures that the speculator who chooses to invest in farmland (includes farmers) is not exempt from contributing to societies' education funding need for the proportion of the investment which is speculative. It also ensures that farming businesses are free of education tax against the farmland base, and that farmer families have the option of transferring it for a capital gain of no more than the monetary rate of inflation to maintain the deferral.
Or, do both of the above:
Allow deferral from paying education tax on farmland, and then assessed only against its real capital gain, to a maximum of 640 acres per owner-operator farmer (two sections of land per typical two person farming partnership).
Education tax reforms sent to Keystone Agricultural Producers Nov 20 2017