More Signs of Economic DEFLATION coming to Canada puts Central Bank in a tough spot: Canada’s New Luxury Tax Is Officially In Effect as of September 1, 2022 – September 4, 2022,
I prefer calling it “Point of sale taxes,” by point of sale taxes I’m referring to what I call regressive taxation, which is basically the government PUNISHING its citizens for consumption. If you ever wonder if Europe has economic growth problems, it’s because Europeans often overly tax their citizens if they CONSUME.
Canada already has a GST tax and some of the worst tariff taxes, I’d argue, in the world; it’s simply not economical for a lot of companies to sell certain goods or services to Canadians because of our PRIOR luxury taxes that often have different labels attached to them. Point of sale taxes are indeed luxury taxes; the government wants to PUNISH you for spending money on items it imagines you can do without.
How dare you buy that luxury car, plane, or boat, while the rest of Canada struggles to make ends meet? Luxury items should only be reserved for Government officials, correct? When Justin Trudeau travels on a private plane and goes on vacation at the expense of the Canadian taxpayer, that’s different because he’s the Prime Minister, his subjects mostly earned their wealth and need to pay the Federal Government an additional tax because “INSERT REASON HERE”.
What’s interesting in all of this is that the Bank of Canada is trying to STOP consumer price inflation; if you know anything about consumer price inflation, you’d know that Consumer price inflation is DEFLATIONARY to the economy; what is Deflation? I’m glad you asked; Economic Deflation happens when people start spending LESS! If it costs me more money to purchase fewer goods and services, it causes DEFLATION to the economy.
Unlike the public sector, the private sector revolves around MARGINS; Canada’s Public Sector, namely the federal government, is running a perpetual deficit, and non of Justin Trudeau’s spending ideas have resulted in SUSTAINABLE positive cash flow for the Federal Government. Now, instead of Justin Trudeau taking a look at his investment portfolio and maybe selling off some of the “investments” he made that turned out to be bad bets, he’s instead targeting Canada’s wealthiest citizens, who by the way have the option to leave Canada altogether.
Canadians don’t have to spend money. If you’re wealthy, maybe instead of buying an expensive car in Canada, you buy it in a country like Dubai, The United States, the Bahamas, or another country that welcomes your capital.
Not sure if these taxes will have a major impact, but I’m sure the Bank of Canada will be monitoring it; people tend to get the role of central bankers confused; central banks exist to prevent DEFLATION, inflation, or consumer price inflation is a creation of GOVERNMENT, one of the main reasons people like me write about MINIMUM WAGE laws and rental controls because, in a free market, PRICE CONTROLS are the root cause of distortions in the economy.
Economic deflation didn’t happen until Price controls became law of the land; the moment you have price controls, as a business owner an example, once my employee is making $20 per hour, regardless if the economy starts to deflate, that employee still has to be paid $20 per hour. Prior to minimum wage laws, if the economy deflated, a person’s wages would deflate with it.
The same was even true about housing; if the economy deflated, the cost of housing would deflate, but you’ll notice, that doesn’t happen anymore; why? Because we have PRICE controls, it’s illegal to pay someone a wage lower than the government wage, furthermore because a lot of people who shouldn’t have mortgages have mortgages, there is a floor for the housing market; when the U.S housing market crashed, the central banks lowered interest rates when infact the opposite should have happened.
Why did the central banks lower interest rates when the housing markets bottomed? To avoid economic DEFLATION, business people and smart investors tend to STIMULATE growth in the economy when not-so-savvy investors are forced to liquidate their holdings; sure, this can come across as shrewd, but this is what propelled society forward. It’s now been banned in favor of Big Government.
With Justin Trudeau, his only concern is to continue to win elections, and right it’s popular amongst his voters that Justin Trudeau is seen PUNISHING the rich as well as his political opponents; Trudeau is merely indulging in this demand by his voters, but I warn the reader, that this could lead to economic deflation, these additional taxes may actually bring smiles to the faces of the wealthy in Canada because they don’t have to spend that money here, as an example I live Toronto, most of my family members have been using Buffalo Niagara International Airport
Although you might not think that’s a big deal, I think it is; they made these changes because of the incompetence of Canada’s Federal Government; now, if I’m to be honest, these super middle-class family members of mine might vote for Justin Trudeau in an election, because they don’t understand, nor do they care to understand why Pearson Airport is so incompetent, most people don’t pay attention to politics, they assume they’re supposed to vote such and such, and they do it.
Even though the rot cause of the Prolonged Great Depression was because of FDR’s New Deal, FDR continued to win in a landslide; his words resonated with the people, and so they voted for his policies to continue; FDR, by the way, was bailed out by the Japanese bombing Pearl Harbor, so even though FDR never fixed the great depression, he’s credited by his supporters as one of the great U.S Presidents.
Late Stage Socialism is indeed socialist policies in their later stages, destroying the economy. Left-wingers never imagine that it’s their policies that created economic ruin, instead they’ll blame those evil rich people and their luxury purchases; how dare these rich people purchase things other people can’t afford? What these rich people need to do is send their money to Ottawa, so Ottawa can then send that money to China to make solar panels, so we can end climate change.
You should already be aware of the Environmental Socialism scourge that’s creating consumer price inflation all over the western world, National and Democratic Socialism is still alive and well, but Environmental Socialism has definitely been embraced by younger generations, which could equate to decades of government mismanagement, where I stand on this topic is that environmental socialism just started around 2020, it’s 2022, and consumer price inflation is already running rampant.
Environmental socialism is actually an attack on DOMESTIC manufacturing in most developed nations, meaning that the environmental socialists are attempting to strip us of our ability to mass produce things DOMESTICALLY, making matters worse, the Left-wingers are attempting to punish the financiers of our standard of living.
I’m currently writing this post from a Laptop computer. Had it not been for rich people, the price of a laptop computer would not be as cheap as it is today; laptop computers used to be reserved for the RICH. Had environmental socialists taken over the government a lot sooner, civilization would have NEVER gotten to where it is now, had the democratic or National socialists won the wars of ideas; society would not have progressed to where it is today.
What I’m indeed getting at is that it appears to me that we’re headed for Late Stage Socialism, a period in which consumer price inflation is rampant, government regulations on economic activity, slow economic growth, and the Bank of Canada is put in a tough position to lower interest rates. If the Bank of Canada lowers interest rates, it will be REWARDING Justin Trudeau’s reckless spending, taxing and regulations plans.
Interesting times ahead!