Saturday, 17 October 2015

Politicians need a new incentive to leave money in your pocket.

Bureaucrats are penalized if they don't spend their budget every year.  Politicians are one step up the food chain and are rewarded for spending all the money they can collect from you.  Why would they stop before you squawk when they are praised for spending money in the riding?  Tax collection is a rigged lottery.  Everyone buys a ticket but not everyone gets a prize.  Winning tickets go to the fixers, not to the lucky girl and boy.

Friction is a bug in a motor, reducing efficiency.  Friction is a feature in government because it feeds those who make a living doing government stuff.  How can you expect those civil servants and MP's and lobbyists to ask for less to live on? Sadly, the more friction there is, the more you need a fixer to tweak the tax code or cut a cheque, to get by the obstacles of government.   Greater spending is rewarded and inefficiency keeps people employed.  Better incentives are needed.

I'm viewing lawmaking separately from redistributing money  to make this argument.  (It's worth remembering that some countries with lots of oil don't rely on taxes.) We have a wonderful job in our country, "The Receiver General", defined by his ability to receive any given amount of our money.  He should be rated the same as charities: What percentage of funds raised goes to administration?  In some programs, administration is the main benefactor.  In others that mail a redistributed cheque to every parent or every pensioner, the "pay to the order of" party is efficiently favoured.

Ask for more taxpayers to participate in the government market
The starting point for reform is to increase the influence of taxpayers on spending and to simplify the redistribution of the take.   The layers of management needed to get a job done has shrunk in business, not so much in governments.   Remember when you needed a bank but now just need a bank app in your pocket?

The incentive to leave money in our pocket is competition from the taxpayers.
The fall-back is to bribe politicians with rewards into the millions of dollars when Canadians prosper and unemployment plunges.
In short,
open the market to more tax-payiing customers
or create a legal market in kickbacks for pols.

1 comment:

  1. Here's an idea - if any government increases net debt - all MP's should be banned from running again for Federal Office for life and if they are due a pension, said pension is reduced by 50%. If a government leaves office and reduces the Federal debt by X%, then all MP's receive a bonus on their salary and pensions of X%. Incentives work!