Mr. Speaker, there are so many areas on which a person could criticize the budget. There is such rampant waste and mismanagement that I could stand here for hours listing them.
There are three areas in particular that the budget did not appropriately address. The first one is the national debt. I hope I will have time in my comments to talk about that in a little more detail.
The employment insurance fund is a rip off. The federal government is siphoning over $5 billion a year in excess of the premiums that employers and employees pay and dumping it into the consolidated revenue fund. I hope I will have enough time to explain how, as employers, municipalities are facing the same rip off. By virtue of that fact, property taxes are being diverted into the consolidated revenue fund of the federal government and are being wasted on handouts to special interest groups and grants to corporations.
Another thing is the inherent unfairness of the tax system of which the Liberal government is so supportive. Using Liberal terminology, the tax system is called progressive. The member for Markham wrote an editorial for the Globe and Mail some time last year. He raged on about how progressive the tax system was. In the recent budget the Minister of Finance added a tax rate. What is meant by progressive tax system, is that tax rates progressively increase the more money we make.
Progressive sounds like a positive term, but if the government wanted to be intellectually honest, it would say that we had the most regressive tax system in the world. To progressively increase tax rates is punitive. The more money we make, the more we apply ourselves and the harder we work, the more we pay. It penalizes success and rewards failure. It is inherently unfair.
The member for Markham wrote an editorial using intellectual dishonesty. He called the Liberal tax system progressive. The truth is, it is progressively punitive; it is regressive.
I told him that I had read his editorial and that I found it objectionable that he had used that kind of language. When people read this they probably thought it was the most progressive system in the world so the Liberals must be good. A former economist of a bank ought to know how punitive the tax system is to hard working Canadians and inherently unfair.
When I spoke to the member for Markham I used the perfect example of a friend of mine who was in a low income situation for several years after high school and decided he wanted to better himself and generate more income. He had some goals, dreams and aspirations so he went back to school. He took out student loans. Besides the demands of the study that university required, he had a part time job on evenings and weekends to help get himself through school. After all the years spent at university, where he obtained a professional designation, he had a substantial debt to pay, but he became a great productive member of society.
We should support education more. Maybe the Liberals should look at spending more money on education and health care instead of handouts to Liberal business friends and special interest groups. We should be encouraging education.
My friend became a contributing member of society. He worked long hours at his chosen profession to pay back his student loans. However, as a result of the Liberal progressive tax system, he is paying the highest rate of taxes.
My friend is being penalized for having spent all those years going to school. He had to work evenings and weekends to help put himself through school so he could earn a decent living. However the Liberal tax system penalizes him. Not only will he pay more taxes because he is earning more, he is disproportionately penalized because he is bumped up to ever increasing tax brackets. We could have a single rate of tax so that the more money we make the more we pay.
The more overtime that people work, the harder they work and the more they apply themselves, the more they will be penalized. That is wrong. I used that example and asked the member for Markham how he could justify that. I said that not only was his article intellectually dishonest but he was promoting a very unfair system of taxation. He replied that fairness is a relative concept.
What does that mean? I want the people of Markham, Unionville and other areas in his riding to know this fact. He is supportive of a punitive, regressive tax system which says the harder that people work, the more they apply themselves, if they want to obtain more education, they will be penalized.
That is the inherent truth of the Liberals' tax system. It is wrong. It is offensive and it is unfair. The member ought to know better, being a former economist of a bank. I hope the bank replaced him with someone with a little more common sense. I hope voters send him a very clear message in the next election that they do not want to be penalized for working hard. They do not want to be penalized for helping their kids become educated so they can get better jobs and be successful.
People do not want to be penalized. The Liberals' regressive tax system should be changed. Let it be known that progressive tax is an intellectually dishonest term. There, I am glad I got that in.
I do not want to use up a lot of time going through the history of the employment insurance fund. Suffice it to say that the unemployment insurance system initially brought about in 1940 has evolved over the years. Today it is a program whereby employees and employers pay premiums on income and that money goes into the consolidated revenue fund. Benefits are paid to people who claim them.
The premiums people are paying currently sit at $2.25 for employees and $3.15 for employers per $100 of earnings up to a maximum amount of $39,000. Those rates are 15% higher than what is required to have an even flow of money in and out of the fund. Since 1995 an excess of money has been paid into the consolidated revenue fund than what has been paid out in benefits to people who become unemployed. Currently that 15% constitutes $5.4 billion a year.
At the present time the EI surplus is approximately $38 billion. Since 1995 the federal government has taken in $38 billion into the consolidated revenue fund and it has been spent. In other words there have been grants dished out to the Liberals' corporate friends and handouts to special interest groups and all the wasteful government programs. Some $38 billion has gone into this fund and has been spent. It is called the surplus but it does not exist. The money has been spent by the federal government. That is bad enough.
However municipalities are employers and they pay premiums as do their employees. Using the city of Saskatoon as an example, the 15% overpayment by employees and the city as the employer was $800,000. Some $4 million since 1995 has been diverted out of the city of Saskatoon's property tax revenues and into the federal government. I used Saskatoon as an exmaple because that is where I am from, but everywhere in the country, people's property taxes are being siphoned off into the Ottawa sinkhole of waste and mismanagement. Property taxes were never intended for that purpose.