Government money

There’s a disconnect inherent in our society, and it is not a good thing.

The disconnect is that people seem to see little connection between their own money and money the government spends. Where do these government funds come from? Of course the vast majority comes from taxes. Income, sales, and seemingly uncountable number of other taxes. Certainly we realize it logically, but that’s not enough.

The Canadian government gave $10.5 billion to GM Canada earlier this year for a 12% stake in the company. The idea is that the money would save the company from failure and save jobs. While the effectiveness of the bail-out is debatable, should the government use tax money to save a company? Or phrased in another way, should the government force you and I to save a company? Further, should the government force you and I to save a company when the Prime Minister tells us, in no uncertain terms, that we should not expect to see any of that money again?

Your answer to the question depends on what you believe the government is for, but that’s a topic for another time.

I’d like to see the government stop withholding tax from my earnings before I ever see the money.  Give me all of my money as I make it, and present me with a tax bill in April. This would do three things:

  • Seeing a bill for a third of one’s income will quickly and clearly show people exactly how much we’re paying in personal income tax. The year-to-date totals appear on our pay receipts, but I suggest that having to write a cheque for tens-of-thousands of dollars will make it more clear than a simple number of a page we often do not even look at.
  • Given that taxes are due in April for the previous tax year, I am losing income in the form of interest on money that should mine until four months after the year ends. The taxes I pay on my first cheque of the year could be earning me interest for nearly sixteen months. Yes, it’s not a huge amount, but still.
  • An unfortunate effect of this change would be to drive many people to financial ruin. And yes, before you pipe up about it, I say this from experience. You can bet that many would simply take the money and spend it all. This is why my idea will not happen.

So how about making it optional? I suspect my second point is the reason this will never be allowed. The money I want to earn interest on is being used by the government, perhaps earning interest.

I would like there to be some way for the general populous to be made to realize that the money the government spends is our money. But even this is not the goal I have in mind. What I ultimately want is for the general populous to make the politicians clearly understand that we know the money they’re spending is ours, and we will not accept it being wasted or spent as if it belongs to them.

Neither the taxpayers nor the politicians act like they are fully aware of the origin of government funds. The government doesn’t make money. The government takes money from us.

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2 Comments

  1. Dee
    Posted October 7, 2009 at 07:20 | Permalink

    I wish people would realize it when they are contracting with the government, charging fees for services to the government. I’m under the impression that rates for the government are often inflated, and that contractors do not work as hard as they would for a private sector client (this is, admittedly, an impression and I don’t have any facts to back this up). Every time you bilk the government, you’re doing nothing but bilking the people of Canada.

  2. Jonathan
    Posted October 9, 2009 at 19:08 | Permalink

    Contracting with the government (in certain businesses) sometimes requires more regulation, paperwork and risk than in the private sector. This is why some government departments are “bilked” when they contract a job.

    In retrospect is it cheaper to do the work in-house (old school government) or close down departments and then hire everyone back on contract, aaaaaaand then hire additional government staff to regulate and inspect the contract work?

    Still as long as costs are hidden in the right columns everyone’s budgets are balanced.

    Grrrrrr sneaky accountants

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