54 billion stolen by the government!

[Rwede]

Not realy that money should go to lowerimg premiums ,taking it to use Elsewhere is theft

That money will either be paid via your EI premiums or income taxes. At least your employer chips in 1.4x what you pay for EI premiums. I'm assuming you'd rather pay more income tax, at a rate of 2.4 times your EI premium to fund the shortfall? Not me.

[logicalview]

That money will either be paid via your EI premiums or income taxes. At least your employer chips in 1.4x what you pay for EI premiums. I'm assuming you'd rather pay more income tax, at a rate of 2.4 times your EI premium to fund the shortfall? Not me.

You have to have a job to pay EI premiums.

[LoneWolf_53]

You have to have a job to pay EI premiums.

LOL. There is that!

[hobbyguy]

The problem with using EI as a taxation method is that it is a regressive method of taxation for small business. A small business that is not hugely profitable gets hit. In the context of massive reductions in corporate income tax, this is transferring the tax load from very profitable large players to small business and their employees.

In a very real sense this places small businesses, which tend to be more labor intensive, at a disadvantage. It therefore places a damper on employment, as small businesses are the real job creators. It is a transfer of of the tax burden from the very wealthy dominant players, who save billions on the corporate tax cut, to the small business community and workers.

That is precisely the wrong direction in the context of high unemployment.

It is also precisely the wrong direction to address Canada's falling economic opportunity ranking.

Arguably, it is also counter to improving the productivity of the country as a whole. I say that because my observation is that small business is much more likely to spend profits on new equipment to improve productivity. Reduce the profitability of small business, and you put a damper on those productivity improving expenditures. No, I don't have any statistics to back that up, it is just an observation.

The current government is using this backward method of taxation so that they can claim "lower taxes" when in fact they have raised taxation for everyone but those at the very top. Overall government revenues are up massively under this government, and so are expenditures (ave over 7% per year since Harper became PM). They are touting a balanced budget for 2015. GDP growth has been what? 2.5% ish? So there is roughly 5% difference in revenues every year, but corporate taxes have dropped to the lowest in the G8, and half of world average. Obviously this difference doesn't come from "fairy dust". If the big boys are paying less, and government revenues are rising, then it comes from?

[Rwede]

The current government is using this backward method of taxation so that they can claim "lower taxes" when in fact they have raised taxation for everyone but those at the very top.

Yet you were deathly silent when Paul Martin and Chretien "stole" >$40 billion from the EI fund.

Strange how it's okay when your guy does it, but bad when my guy does it.

While Martin's record as finance minister was lauded in business and financial circles, there were undeniable costs. Some of these costs took the form of reduced government services, affecting the operations and achievement of the mandate of federal and provincial departments. This was probably most noticeable in health care, as major reductions in federal funding to the provinces meant significant cuts in service delivery. Martin's tactics, including those of using surplus funds from pension plans and Employment Insurance, created further controversy. CAW economist Jim Stanford said that a combination of a spending freeze at 1994 levels and lower interest rates would have eliminated the deficit in two years through economic growth alone, without the reduction in services.[

[hobbyguy]

Nope, I wasn't happy about it then, and remain unhappy about it, and for the reasons I stated above.

I am a firm believer in taxation in accordance with the ability to pay.

[SpeakTheWholeTruth]

35 replies to this topic. Unreal that no one cares!

[Smurf]

I have to agree with hobbyguy. I was just as mad about it then as I am now. It is deceit. Employers should be really mad about it. They paid billions of dollars into a program, not general coffers, then the government steals it and raises their premiums. They are in a round about way making them pay for it twice. It is definitely a hidden tax. It is money the government is using to try and make itself look good. They are being deceitful to both the employers and employees and that is wrong.

[zzontar]

It's not much different than ICBC having a huge surplus which they give to the government and then raise the premiums. What reason do they both give for raising premiums... sorry, we gave away your money?

[Smurf]

Maybe they should have used it to train people to get into better full time jobs. At least it would be going for a purpose similar to what it was meant for. A backup plan, insurance, for people who loose their employment.

I would say it should be voluntary but I think most of us realize that the people who really need it the most would be the last ones to participate. The same with CPP, but again the people who will actually need it in the end would be the ones who don't participate. At least each of these plans gets them to pay partially for their benefits instead of just going on welfare which is totally paid by the taxpayer. They are also working at least part time as compared to full time welfare. To me it is a good program and should have been left alone. We all know they will get their money and this I believe was the cheapest alternative.

I always thought I could do better on my own than paying into these programs, but I do believe if used the way they are meant to be they are good for the country and economy in general. I believe they were a cheap method of keeping money in the hands of temporary workers who will exist as long as we exist as a country. Stealing from it is just another taxation and has increased the premiums/costs which never should have happened. It is no different that you constantly pulling money out of your retirement saving to buy groceries. In the end it doesn't work.

EXACTLY zzontar. Stealing is stealing.

[hobbyguy]

Here's a bit of a random thought on this issue.

The current crop of economists seem to have a "group think" mantra that income taxes are bad, and VAT taxes are good.

Using the EI system to tax labor consumption is pretty much an extension of this group think. Big corporations minimize labor costs through the use of very expensive robotics etc. etc. etc.

Given that big corporations have had their income taxes recklessly slashed by the Harper government, and that they are in the position of being able to minimize employment, increasing EI costs not only "stacks the deck" against small business, but it further incentivizes big corporations to go further down the path of automation, robotics, etc. etc. and to compound that, it further incentivizes big corporations to 'offshore" labor intensive parts of their business by raising the ROI on a plant in, say Bangladesh. The EI savings involved may well offset the freight costs etc.

Add to that mix, that the big corporations will then report that profit in Ireland, or...

So "tax cuts create jobs" do they? Small business gets whacked by the EI labor tax, and so has less resource available to improve the business and invest productivity enhancing equipment etc. Big corporations are incentivized by this goofy system to introduce more automation/centralization etc. and to "offshore" jobs.

And we wonder why Canada lost 29,000 jobs in April? Why young folks struggle to find a decent job?

http://www.forbes.com/sites/petercohan/2011/05/03/do-tax-cuts-create-jobs/

"Do tax cuts create jobs? No, just deficits."

This complete and utter folly in taxation and fiscal policy by Harper and crew will beggar the country for years.

[Smurf]

If they want it to be a VAT of some sort then tell us that. Tell us these are not crown corporations, etc., but all departments collecting different types of taxes. EI tax, Hydro Tax, Health tax, CPP tax etc.. Instead of being deceptive about it and hoping no one will notice what they are doing. Don't call it EI and force people and companies to pay it, then spend the surplus and raise the (tax) rate to pay for it when it was already paying for itself just fine.

[steven lloyd]

Here’s an email that has been making the rounds:

WHERE DID THAT MONEY GO?

Remember, not only did you and I contribute to CPP but your employer did, too. It totalled 15% of your income before taxes. If you averaged only $30K over your working life, that's close to $220,500. Read that again. Did you see where the Government paid in one single penny?

We are talking about the money you and your employer put in a Government bank to insure you and I that we would have a retirement cheque from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back. If you calculate the future invested value of $4,500 per year (yours & your employer's contribution) at a simple 5% interest (less than what the govt. pays on the money that it borrows), after 49 years of working you'd have $892,919.98.

If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.

Another thing with me.... I have two deceased husbands who died in their 50's, (one was 51 and the other one was 59 before one percent of their CPP could be drawn). I worked all my life and am drawing 100% from my own CPP so I am receiving the maximum allowable payment per month. My two deceased husband's CPP money will never have one cent drawn from what they paid into the CPP plan all their lives.

THE FOLKS IN OTTAWA HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.

Entitlement my foot, I paid cash for my CPP! Just because they borrowed the money for other government spending, doesn't make my benefits some kind of charity or handout!!

Remember Senator's benefits? --- free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days. Now that's welfare, and they have the nerve to call my CPP retirement payments entitlements?

We're "broke" and the government can't help our own Seniors, Veterans, Orphans, or Homeless. Yet in the past few years we have provided aid to Haiti , Chile, Turkey, Pakistan, etc., etc., etc. Literally, BILLIONS of DOLLARS!!! And they can't help our own citizens !

Our retired seniors living on a 'fixed income' (CPP and OAS) receive no additional federal aid nor do they get any financial breaks, while our government and religious organizations pour hundreds of billions of $$$ and tons of food to foreign countries!

They call CPP an entitlement even though most of us have been paying for it all our working lives, and now, when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.

[Smurf]

So very true. The government should keep it's hands out of these things and let them run the way they are supposed to. Payments into them would be a lot less, payments out would be better and it would put more money in people's pockets to help the economy and pay more taxes if necessary. If all these premiums, costs, CPP, EI, ICBC, Hydro, Health insurance, you name it were dropped a bit because the government wasn't picking their pockets, people would have a lot more money to spend and save for their retirement or pay increased taxes. I believe we would be much better off in the long run.

[Woodenhead]

So very true. The government should keep it's hands out of these things and let them run the way they are supposed to. Payments into them would be a lot less, payments out would be better and it would put more money in people's pockets to help the economy and pay more taxes if necessary. If all these premiums, costs, CPP, EI, ICBC, Hydro, Health insurance, you name it were dropped a bit because the government wasn't picking their pockets, people would have a lot more money to spend and save for their retirement or pay increased taxes. I believe we would be much better off in the long run.

Agreed 100%. SL's posted article applies to many things outside of pensions (EI immediately comes to mind) and the government's treatment of them is unacceptable.