Polls Details

FOR MP,s,voters,taxpayers

Thinking can be easy.  Based on fast, effortless memory recall and associated with feelings instead of knowledge and reason, such thinking reverts humans to their primitive roots.  It seems that most citizens of our country today are satisfied to take this easy path. Voters today, and the people they elect, have been encouraged to ignore Informed and rational thought for reliance on mind control, advertising,  by the political parties.  There are many Government policies that deserve the effort, logic, reason,  skepticism, self awareness, slow and controlled consideration of alternatives. All of the following alternatives are based on factual information, data and reasoning, readily available through research and study. All MPs, and voters,  should have the intelligence to understand all that follows, if they make the effort.

Let us look first at the creation of money. Money is not wealth, it is simply a means to quantify the production and value of wealth. Work, capital, demand and the social environment, produces something of value ,wealth,  and the value is expressed as the amount of money paid for that value. The food, services or things produced are eventually bought, paid for with money and consumed. Money is presently created by private banks, without any foundation of production or wealth.  In order to create money the banks also create debt. If you doubt this statement of fact, just “google” it. The banks like to create money, and therefore debt, because they can then collect interest on it.  Where do the banks loan this money.  They make stress causing loans on credit cards and on high cost homes to individuals. Also, loans to Governments causing stress to taxpayers to pay the debt charges. But worst of all, loans to speculators in financial instruments which add no productive wealth to the nation.  Instead, such loans create economic bubbles in the economy that lead to recessions. Uncontrolled creation of money by banks, without corresponding creation of wealth,  creates inflation.

Rational thought leads to the alternative.  Instead of money being created for debt, create money only for wealth.  Between 1938 and 1974 the Government of Canada had the Bank of Canada create the money to pay for the conduct of wars, the construction of publicly owned  infrastructure and the introduction of health and education services. This was done without Government debt and with little family debt. Those were called the “Golden years of Canada”.

The Bank of Canada should be the sole creator of money and only for the creation of wealth. The wealth created for war was destroyed by war, leaving nothing of value to the country. The same amount of wealth could be created to provide benefit to the country and its people. The Bank of Canada could also create money, that required in excess of their equity and deposits,  for use by the banks.  By charging the bank's interest, at least an equal rate to that paid to people on savings, the monetary system would treat the banks and people equally. Savers would receive value for their savings. Banks would still be able to apply a “spread” on the money they loan. This would encourage saving and the deferral of consumption to future needs. Only through judicious application of both fiscal and monetary policy can employment and the economy be strong and  balanced.

There has been less rational or reasonable thought given to taxation than to any other responsibility of Government. Expenditure by Government is freely debated. Taxation is wrongly thought to be too complicated to debate. It need not be as complicated as it presently is. The basics are quite simple. The society we live in should allow all members to share in the wealth created because of living in that society.  The wealth created, as represented by an amount of money,  can be spent, saved and invested, or paid as taxes.  

One would hope that our society, together with the work performed by its members, assures the necessities of life to everyone.  Unless a guaranteed income is paid directly to each citizen, the first claim on the money value of income must be the cost of basic necessities of life.  The second claim is payment for the benefits of living in the society, the taxes. The balance of the money value of the wealth created (earnings, income) is available to be spent or saved by the individual. If any of that balance is saved (invested) it deprives individuals of immediate consumption, makes that balance of money available for productive use by others and increases the total of national wealth.

The first consideration in taxation is choice of tax base. The choice should be that which is most beneficial to the economy and still acceptable to the taxpayer.  The taxation of income is harmful to the economy, by discouraging work and productivity, and is viewed as a penalty by the worker.  Attempts to correct for the wrong choice of tax base has resulted in great complications in the calculation of taxable income.  Whereas income results from the creation of wealth,  spending of income is the decreasing of wealth. For the majority of taxpayers, the only difference between income and consumption is savings. Most of the complication in determining taxable income arises from taxing, or not taxing, income derived from other than wage remuneration.  

The simplest and fairest tax is a tax on consumption, by means of a “cash flow” tax. The simplest concept is that ALL money, or value, received is either spent (consumed) or not spent (saved). Present record keeping requires reporting of all payments and receipts. If the receipts are not saved and invested they must have been spent and the wealth consumed, and should be subject to tax. Instead of taxing the wealth that is created in the society, the tax should be on the wealth taken from the society.

Once the annual amount of cash flow spent is the accepted tax base, the method and rate of tax needs be determined. The current method of graduated rates applied to brackets of income has been a long standing tax method, and considered fair and just by most thinking people.. Reasoning that one’s ability to earn and consume is, in large part, dependent on the past and present influence of society,  increasing graduated rates should apply to predetermined increasing brackets.

The number and size of brackets over the last 50 years seem to have been adjusted as a method of increasing the tax burden on those with lower incomes while decreasing the tax burden for those with high incomes.  The tax burden over the last 75 years, for those with lower incomes, have increased by 15% while those in the top bracket have decreased by 38%. This was accomplished by decreasing the number of tax brackets from 25 to 4 and decreasing the tax rate on the top bracket from 90% to less than 50%. It would seem that with the advent of computers and the publishing of tax tables, a fairer bracket distribution would be for 100 brackets.

It is not altogether clear what the government’s motivation is in providing tax inducement credits for savings. If it were to encourage productive investment, the inducements would be for investment in small and medium sized business, those that provide greater employment and growth.  The RRSP and other schemes results in savings being invested in the least economically productive investment possible, in speculative trading in listed shares and financial instruments. If the intent was to encourage savings in order to help support those who might otherwise require government support at a later date,  the greatest rate of inducement would go to those in the lower tax brackets, not to those with the highest incomes. Those in the higher tax brackets would save anyway. If the intent was to encourage savings in general, there would be no requirement to invest in funds charging costly maintenance to investors. A taxpayer declared and provable investment, even a bank savings account, would induce more low income taxpayers to save their smaller savings amounts, as well as encouraging the wealthy to invest.

There are  tax sources, other than on income or consumption, that would be economically beneficial to our economy, as well as more acceptable to individuals. The purchase and sale of shares and financial instruments adds nothing to real wealth in the country. To quote the founder of the Vanguard Investment Group “We encourage investors to trade - - - - - - So the way I calculate it, 99% of what we do in this industry is people trading with one another, with a gain only to the middleman. It’s a waste of resources”. A tax on every securities transaction, maybe excluding IPO’s, ( Initial Public Offerings which presumably increase productive capacity), would aid the economy,  by reducing the tax on productive effort, and provide taxation revenue,

The purchase of financial instruments add an equal benefit to the production of wealth in the economy as the purchase of a lottery ticket. They both provide only remuneration for the middleman. The purchase of a lottery ticket pays 45% of the purchase price to Government. It has been stated that the stock market is more subject to dishonesty and manipulation than lotteries or casinoes. Why should the poor, who attempt to receive a something for nothing gain, from their investment in a piece of paper, pay a 45% tax to Government while the rich investors pay no tax on their purchase of a piece of paper?

The cost of every item manufactured, processed or grown in Canada bears a portion of the cost of maintaining our society. The taxes and withholdings from employees, the tax paid on the assets used, business taxes, corporate taxes, utility costs, municipal taxes, HST on the goods bought by employees, and these same costs for each rollover of money, are all lost if the goods are imported . 100 years ago over 75% of tax revenues were from custom and excise taxes.  Manufacturing and the economy, and gainful employment, expanded. Canadian workers can produce just as cheap and efficiently as any others, it is only the added costs of Government that allow imports to sell cheaper. All imports should bear the same tax load as those produced in Canada. Then Canadian workers could compete on a fair and equal basis.

The taxation treatment of food fails the rationality test.  The exemption of food from point of sale H.S.T. tax seems to be another example of favouring the richest segment of society. The exemption enables those buying the most, and most expensive, foods to save much more than those on low income. Better to increase support for those on low incomes to cover the tax cost and to levy the tax on everything purchased. If there was an import tax on all foods, there would be increased demand for local production. Imported foods should bear tax at an equal level with locally grown and processed.

Our politicians agreement to multi government trade agreements are treasonable actions. The multinational corporations are creating and controlling elite tribunals to override domestic laws, including environmental, health and other wishes of the people. They are transferring jurisdiction over our society to multinational corporations and financial interests. Canada is being left with nothing to support its foreign trade but the depletion of our natural resources. Most of the value of our resources is being surrendered to foreign and international speculators. It is not even necessary for resource developers to use only Canadian labour.  The consumption of unnecessary imports, destruction of manufacturing export ability, expansion of unfunded liabilities, debt, infrastructure deterioration and diminishing natural resources  should not be our legacy to future generations.

What can induce our elected representatives, and the electors,  to even think about rational alternatives? How do we overcome the influence by the moneyed corporate and financial  elite over our political leaders and followers?  I do not know, do you?


2017 Pre-Budget Consultations


Phone - 902 691 2866

98 Elm Avenue Kentville NS B4N 1Z1

www.eddtwohig.ca edd@eddtwohig.ca


On October 19, 2016 I had the following to say before the “ House of Commons Finance Committee (FINA) 2017 pre budget hearings, followed by the brief previously filed with the Committee:


Mr. Edd Twohig (As an Individual):

Thank you very much. I'm here as an individual, but at the request of a Canadian senator who spent two or three hours listening to me rampage over what I have learned in the last few years about Canada's economy and the history of it, and further, what I started writing about the bad base of our taxation policy in Canada, on which I started ranting about 50 years ago.

Looking at the history of Canada, I look back at when I was born at the beginning of the Great Depression, and it appears that the Great Depression had a lot to do with the creation of money by the financial sector, which caused the excesses of the 1920s, which we now see being repeated again.

I go back and look at the history of the golden years of Canada, the years when everybody seemed to be working. We did all the great things. We built the Trans-Canada Highway, seaways, hospitals, and everything. These were the golden years, but they stopped. When did they stop? They stopped when the financial interests again took control of the finances and the economy of Canada.

What's happened since then? Our manufacturing sector has diminished. We look at economic growth and see it has been up and down. We've had bubbles grow and burst, and we have seen a decrease in the distributive justice of our country.

We've seen a death spiral start. We've seen the growth of debt for Canadian homes and people and workers. We've seen personal savings go down and debts go up. All of these things have happened in the last half of my lifetime.

In the first half of my lifetime we got out of a depression, we paid for a war, and we did all these great things in Canada, but then the policies changed around the 1970s, and this wasn't just the policy of Canada.

I have been studying some of these things and hoping that the rest of the Government of Canada, the members of Parliament, would look at these various ideas and debate them and learn them, just as this senator suggested they should.

If I look back at the study and the rational thought that I've applied to these matters, I think that if MPs do not even make the effort to understand them, then I believe they will be negligent, and I would think that I would deem them as being traitors to our society.


July 29, 2016

2017 Pre-Budget Consultations


Suzie Cadieux,

Clerk of the Standing Committee on Finance

House of Commons

Ottawa, Ontario

Canada K1A 0A6

Tel: 613-992-9753

E-mail: FINA@parl.gc.ca


Executive Summary


Very few citizens understand, or try to understand, the country’s economy. They may feel too dumb or uneducated, but it is really just failure to use their ability for rational thought. They elect MPs to do it for them. To understand and legislate economic policies, to benefit all citizens, is the greatest responsibility and duty of every MP. Economic policy is the foundation of every other facet of Government. MPs must research the necessary concepts and data and apply rational thought. Policies should assure maximum wealth creation (goods and services), and lesser wealth consumption, in order to sustain productive capacity. Policies should assure fair allocation of production and distribution between individuals and society as a whole.


It is rational that tax influences citizens decisions to work and produce and to spend and consume. The elimination of tax on money received as income could easily be replaced by taxing payments that are unproductive. The current tax statutes and regulations have become complicated and confusing by efforts trying to correct the economic and personal harm caused by taxing income.


The complications of determining the taxable amount could be reduced by simply totaling the money received in any year and deducting

(a) an amount for median standard of living ;

(b) total amount saved

(c) amounts paid that are determined to benefit others than the taxpayer


Taxation that would replace the income tax would include:

(d) applying equal, or higher, tax on imported goods and services;

(e) applying a tax on secondary market security transactions;

(f) applying a progressive tax on total receipts less (a), (b), (c)above.


The effect of such taxation changes would be to shift the taxation base from the production of goods and services, the creation of wealth, to consumption, the destruction of wealth.


Background and history


Most Members of Parliament would have no personal recollection of the “Great Depression” , “World War II” or the “Golden Years” of Canada. Nor are they knowledgeable about the economic policies of those days and have little knowledge of the days since the “Golden Years”, the years of greatest growth. Let me outline some of the changes and their effect on Canadians.


The influence of the banking and financial interests’ over Government's policies led, prior to the Great Depression, and again after 1970, to economic bubbles, high debt levels and concentration of income and wealth in the hands of the few. MacKenzie King stated “The Liberal party declares itself in favour of the immediate establishment of a duly constituted national bank for the control of the issue of money in terms of public needs.” So he formed the Bank of Canada with the mandate of creating the money to finance all levels of Government. The recovery from the Great Depression, wars, the seaway, the TC highway, much infrastructure and social policies were so financed. This was all done with little government debt and need for taxpayers to pay debt charges.


The “Golden Years” of Canada ended when the banking and financial interests regained control during the 1970 decade. MacKenzie King warned that loss of control of the money supply would “wreck any nation”, and it is happening.


WWII saw Canadian production expand, much of that production only to be destroyed, saw maximum employment, saw personal savings rise. If we could contribute that much effort for war, we should make equal effort to produce infrastructure and more goods and services for Canadians and for others less fortunate. Such would increase employment and growth. We did just that, for decades after WWII, the Golden Years. The TCH, Seaway, schools, hospitals, social programs, basic research, the arts, all were funded without significant government or household debt.


During the Golden Years, in addition to the creation of money by the Bank of Canada, Canadians were employed and could earn, and loan, money to the government or to the private economy. And there were income taxes. During the 1950’s and 1960’s, the rates on taxable income ranged from a low bracket of 17.4% to a high of 91% on the top bracket. Such high rates of taxes did not discourage work effort or production. Those who were in that workforce will vouch that the opposite was true. The complex changes to income tax determination over the last 50 years have included additional deductions in the calculation of the highest taxable incomes as well as reducing the tax rates of those incomes over $300,000 by 38% while increasing the rates for those reporting under $300,000 by 18%.

Imports, fair tax


Federal, Provincial and Municipal taxation equals over one third of GDP. Presently, all cost of government must be absorbed in the price of goods and services produced in Canada. Imported goods and services bear none of those costs of maintaining our society. Canadian production would be more competitive, in Canadian and other markets, if imports were levied the same tax amount as borne by Canadian production. The manufacturing sector in Canada is shrinking because it bears all the costs of government, not because our workers are any less competitive.


Canada can produce all of the food necessary to feed our entire population, and more. The consumer’s choice, to purchase foods not produced in Canada, is of no benefit to any Canadians, other than the one consuming. Canadians should have full freedom to choose as they wish, but should pay for their choices. Canada’s food production could be increased by charging the same taxation on food imports. Imported food should not only bear the same taxation as Canadian food, but an additional duty to encourage production in Canada.


Imports are currently paid for by two principal sources. Firstly, the money from the depletion and export of natural resources. In addition to depleting the resources, the future economy, as well as the current, is denied value added industry to support employment and prosperity. Secondly, foreign investment in real estate and other rent seeking assets. There seems to be little concern for future generations in our economic policies. In addition to personal debt, for student loans and predatory credit cards, all of the foreign investment will have to be paid for by future generations. All to be paid for while good paying employment is being reduced by technology and imports.


Speculation tax


A Canadian buying a lottery ticket speculates that they will be paid about one half of the amount speculated. The other half goes to Government, a tax rate of about 47%. A tax on speculation is good source of revenue because it is an easy source, the money is there and the transaction is of no benefit to the rest of society. A purchase/sales transaction in the secondary securities market benefits only the seller and buyer. Such a transaction diverts capital from any “initial public offering” that would create productive assets or from other use of the money that would benefit the economy. It is pure financial speculation based on inflation and financial growth. Such a tax, at some fair rate, would replace revenue from taxes levied on income and production.


Tax calculation


The information required and filing requirements for the suggested change in the tax base would be less than required under the present tax base. Present accounting principles and standards for all monetary transactions are in place. The record of every transfer of money in every transaction is available and required for various purposes, including taxation. The suggested change would eliminate adjustments for time, type, and sundry reallocations. For tax purposes, only two things would matter, money received and money paid out. With the paid out, only two things would matter, was it paid for personal consumption or was it saved. One of many reasons for not taxing savings is simply that savings are of no direct benefit to the saver until cashed and spent. Savings are available for use by others.


The effect of such taxation changes would be to shift the taxation base from the production of goods and services, the creation of wealth, to consumption, the destruction of wealth.




Present savings plans do little to encourage savings by those who most need savings. Those with the least income and resources need the most encouragement to save. Their savings are most needed to offset any need for future government support. Those with higher incomes benefit most by tax deductibility on savings. The savings plans are invested in secondary securities markets that do the least for the economy. The re-selling of securities add no economic value. Investment of savings in the small business sector, the sector that most creates employment and advances the economy, is not encouraged. The cash generated in a small business is presently taxed, even if it is used for expansion of productive assets.


Creation of Money


Few members of the public understand, or will even believe, that money is now created by banks through the creation of credit, of debt. W. L. MacKenzie King stated; “The Liberal Party believes that credit is a public matter, not of interest to bankers only, but of direct concern to every citizen.” The banks, and allied financial institutions, have, for their own profits, created unsustainable levels of debt for households and individuals. The banks have created money for speculation in securities and real estate, creating harmful economic bubbles. The governments since 1970 have needlessly incurred debt charges by failing to finance through the Bank of Canada. Much of the borrowing was due to unnecessary debt charges and the failure to pay current expenses from current taxation.


All money should be created by the Bank of Canada, as stated by MacKenzie King “in relation with the domestic, social, and industrial needs of the Canadian people”. There should be control over the creation of debt for unnecessary consumption. Money should be created only for the creation of wealth. Money should be created for public wealth in the form of physical and human infrastructure or for loan to the private sector to support industrial and developmental needs.


If all Members of Parliament knew our economic history, we might still be in the “Golden Years”. Had the Governments since 1970, kept using the Bank of Canada, kept control of currency and credit, discouraged speculation and maintained distributive justice through taxation, we might still have a viable and productive economy. We might have employment by the production and consumption of Canadian goods and services. We might have a growing middle class.


There are so many economic theories, and economists of different minds, that it behoves our Members of Parliament to review and reconcile the economic differences and through rational thought. If they do --- “they can make Canada great again”.


EDD W TWOHIG 902 691 2866

98 Elm Avenue Kentville NS B4N 1Z1

www.eddtwohig.ca edd@eddtwohig.ca

July 19, 2016

William Stephenson

Procedural Services

House of Commons

Room 6-11

131 Queen Street

Ottawa, ON K1A 0A6


My justification for appearance before the Committee is having experienced 86 volatile years of our economic history as a Chartered Accountant, entrepreneur, consultant to Government and business, Member of the NS Legislative Assembly and Candidate for Member of Parliament. I have studied Economic Growth and Distributive Justice and have written and spoken on my economic and political opinions. I fear that Canadian legislators have been deprived of the knowledge necessary to adequately evaluate economic and taxation options. A favourite quote states; "The only thing new, is the history you don't know". Canadian policies have been good and have been bad. Policies of the 1920's were bad, the policies of W.L. MacKenzie King and others led us through the growth decades of the Golden Years and we now have policies that are leading back to the 1920's. Canada must stop following policies dictated by other countries and corporate interests.