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"THE DEVIL IS IN THE DETAILS"

The way I figure it, if you don't like the way something is - then the other guy is not going to change it for you.

You have do it yourself.

I'm fed up with the high TAXES in Canada. I'm fed up with the continual increases. Every time the government increases my taxes, I have less to give to my family.

And I don't know about you, but my family is very important to me.

So thats why I put up this web page. To tell you how I feel - to try to find some way of making changes.

To try to find other people who feel like I do. To compare notes and see what we can do to get our governments under control - particularly to control their spending habits!

I can't afford their ways - and neither can my family.

A few years ago, I met this guy by the name of
Peter B. Macdonald
who had, what I thought, were some good ideas on how to control the government's bad habits.

His basic idea was simple enough - put limits on the government's ability to spend the taxpayer's money - simple!

But as usual, the "DEVIL IS IN THE DETAILS".

So of course, I asked how it would work.

As we coffee'd and talked - I slowly began to understand.

This is a summary of what he told me.

STEP 1.

He said that in order to control government, you must start from accurate revenue and spending figures, therefore the government must adhere to some form of standard accounting practices - and generally they don't. If businesses kept books like the average goverment - business managers would never know whether to give the staff a raise or not! .....or even when to go bankrupt. So, he proposes that the people insist on a consistent form of government financial reporting, the same as for businesses.

He calls this "GAAP for Government"

He picked GAAP because it is a system of accounting that has been around for years and it is the basis of all business accounting.

While it is not perfect - it is better than what we have - and because the world changes, so does GAAP - the accounting profession continually makes adjustments to the basic concepts of GAAP.

We will ask the accounting profession to developement a system of GAAP for governments (much of the work has already been done because it is really important to Statistics Canada), as they have for banking and all other type of enterprises.

FORMALLY, THE WORDING OF STEP 1 IS:

THE GOVERNMENT SHALL ESTABLISH AND ADHERE TO "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR GOVERNMENT" (GAAP-G) AS OUTLINED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS AND THE CERTIFIED GENERAL ACCOUNTANTS (AS AMENDED FROM TIME TO TIME).

Simple! At first it was not simple but now it is obvious...and my curiosity had the better of me. I wanted to know more. As we sipped our sixth cup of coffee, he continued.....

STEP 2.

Once we have the accounting under control, we need some way of 'measuring' the government's proformance. In business, one measure that is used is SALES.

The Gross Domestic Product (GDP) is very much like the sales proformance of a company. It is the total wealth of the state - as measured each year. So why not use it as another basic for his tax limit idea?

So step 2 is to use the GDP figures.

The only argument against using these figures is that they don't include a lot of human activites - like going swimming, volunteering, and a lot of other things which do make the world a better place. ..... but there is little or no money involved.

But it really doesn't matter, as long as we use the SAME figure each year. If we keep changing our system for a better one, soon we will not be able to know where we are. So the GDP is it.

Again simple, what's next?

STEP 3.

Now we have the accounting system under control and we are going to use the Gross Domestic Product as a yard stick of our general proformance. We now need to know what our government is doing for us.

That question has no real answer, because the government is so big - that no one really knows what it is doing. But we can get an educated answer by looking at their spending.

So step 3 is to add up all of the government's spending.

This figure he calls the "Government Spending" and it is the amount of money the government spends for everything in one year.

Government Spending is also TAXES plus BORROWING

Getting the picture?

STEP 4.

Divide Government Spending by the GDP.

Let's look at just one government - The Province of British Columbia. Most governments in the Western World fit a similar pattern.

To be continued.....

Links to other interesting sites on the Web

Progressive Conservative Party of Canada
British Columbia Conservative Party
Tax Ceiling Concepts - TAXCAP
Canadian Politics Newsgroup
Physics of Motion (challenging facts for physics enthusiasts)

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Questions and comments very much welcomed.

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