Rail: Ontario-Quebec High Speed Rail Study

[cacruden]

I'm not sure of the point of that question. I've never seen any evidence that HSR would result in higher taxes, considering it's expected to make a profit and pay for itself. But since you brought up taxes, going by total tax revenue as a % of GDP the only one of those countries that's significantly higher than us is France. The rest are in the 30-36% range. Canada is right in the middle at 33%.

http://www.oecd.org/dataoecd/18/23/35471773.pdf

Comparison of taxes paid by a household earning the country's average wage (as of 2005)

Personal Tax Rate - Single
Canada 31.6%
France 50.1%
Germany 51.8%

Personal Tax Rate - Married Two kids
Canada 21.5%
France 41.7%
Germany 35.7%

 

[afransen]

cacruden: % of GDP is more accurate. You can skew that sort of comparison most any way you want. For instance, your comparison seems to exclude all non-wage taxes.

 

[MisterF]

Exactly. That's only a small part of the story. Plus I didn't include Germany in my comparison because unlike France, Germany does have significantly higher population density than we do.

From that OECD pdf, total tax revenue as a percentage of GDP (2004):

France 43.7
United Kingdom 36.1
Spain 35.1
Germany 34.6
Poland 34.2
Canada 33.0
Turkey 31.1
Ireland 30.2

But again, this whole comparison doesn't seem to have much of a point since I've yet to see any evidence that building HSR results in higher taxes.

 

[Admiral Beez]

i'm not going to dispute the fact that i'd rather fly porter than take via, but the whole point of this discussion is that given an HSR option, even flying wouldn't be competitive.

But any HSR network would either have to be super expensive to fund its construction and operation, or operate off the taxpayer's teat for decades, which presents rather unfair competition to Porter, since the taxpayer is not paying for Porter's operations to the SAME degree.

 

[nfitz]

Can we please stop comparing our rail systems to tiny, densly populated countries like France or Ireland.

France and Ireland densely populated??? Compared to southwestern Ontario?

 

[cacruden]

Exactly. That's only a small part of the story. Plus I didn't include Germany in my comparison because unlike France, Germany does have significantly higher population density than we do.

From that OECD pdf, total tax revenue as a percentage of GDP (2004):

France 43.7
United Kingdom 36.1
Spain 35.1
Germany 34.6
Poland 34.2
Canada 33.0
Turkey 31.1
Ireland 30.2

But again, this whole comparison doesn't seem to have much of a point since I've yet to see any evidence that building HSR results in higher taxes.

If you are going to use that as the basis, then you have to include per capita. Higher taxes -- will depress GDP. In mine I am just comparing income taxes, but sales taxes are also higher in France, they are taking more money out of the private economy to pay for government projects - leaving a weaker economy, higher unemployment, higher taxes. We can take more out of the economy as a whole as well, which will also depress our GDP

 

[allabootmatt]

To slightly change the subject...

As much as I would love "high speed rail" in Canada, it strikes me that holding out the eventual, faint hope of it is a very convenient way for governments to avoid actually improving rail service. There's *lots* we could do to improve VIA without new alignments, electrification, rolling stock, etc.--but aside from some minor improvements we don't get them.

I would love to see some public demand for "higher speed rail" too.

 

[MisterF]

If you are going to use that as the basis, then you have to include per capita. Higher taxes -- will depress GDP. In mine I am just comparing income taxes, but sales taxes are also higher in France, they are taking more money out of the private economy to pay for government projects - leaving a weaker economy, higher unemployment, higher taxes. We can take more out of the economy as a whole as well, which will also depress our GDP

You state that higher taxes will depress GDP without any proof of that. And I'll say it for a third time - there's no evidence that HSR results in higher taxes, so this whole debate about taxes is moot.

 

[kEiThZ]

To slightly change the subject...

As much as I would love "high speed rail" in Canada, it strikes me that holding out the eventual, faint hope of it is a very convenient way for governments to avoid actually improving rail service. There's *lots* we could do to improve VIA without new alignments, electrification, rolling stock, etc.--but aside from some minor improvements we don't get them.

I would love to see some public demand for "higher speed rail" too.

This is exactly what I have raised before. Instead of 23 billion, how about spending a billion or two to improve VIA right now.

 

[cacruden]

You state that higher taxes will depress GDP without any proof of that. And I'll say it for a third time - there's no evidence that HSR results in higher taxes, so this whole debate about taxes is moot.

Simple math, money - taxes = less to invest, less profits, less attractive (in an already horrible market) which affects GDP. You need more money for more projects, HSR will only be ONE - you then have to add an extra 40% on for non HSR project provinces - then you have other pet projects -- it is just the way things work up in Ottawa I love trains, but generally speaking - the countries that have train networks (good ones) are generally the ones that take more in taxes and spend more on government projects - so you are generally comparing apples to Oranges. I would prefer Virgin run our railways than the current group at Via which don't seem to be very inventive....

 

[MisterF]

Well I'm sure VIA would be more inventive if Canada spent the same kind of money that Britain does on rail (even per capita).

Simple math maybe, but the idea that more taxes = lower GDP just doesn't work in the real world. Some of the highest taxed countries in the world - Scandinavia, Belgium, Austria, France - are also some of the richest. I don't see a negative correlation between tax burden and economic activity. If there are any analyses that prove otherwise, by all means show us.

I don't see much of a correlation between taxes and rail either.

 

[Admiral Beez]

Shouldn't we start by looking at successful commuter rail systems in North America? Japanese bullet trains might be nice, but what's successful in the USA? The US is as car/truck/road centric as we are in Canada, so let's start there.

 

[ShonTron]

The Capitol Corridor (Amtrak California) is a perfect example of what we could hope for in the short to medium term for the Greater Golden Horseshoe/London area, specifcally for service to Kitchener, Niagara, London: Places too far for GO Trains, but not "intercity". Though California, as car-centric as they come, approved tax funding for high speed rail.

The NEC has relatively high speed trains (200 km/h). I rode Acela between Baltimore and Washington, and that corridor is served by many commuter lines as well between Boston and Washington, including Maryland Transit Administration, SEPTA, NJ Transit, Metro-North and MBTA. All of these commuter routes have off-peak service as well, SEPTA, NJ Transit and Metro-North run frequently in the weekends as well.

 

[afransen]

The relationship between taxation and wealth is not so clear cut. It tends to be a matter of quality of taxation more than quantity. Those countries that have a tax code geared toward low taxes on capital and profits and higher taxes on consumption and personal income tend to be wealthier. Incidentally, lower taxes on profit would help the business case for HSR.

 

[urbanfan89]

Simple math, money - taxes = less to invest, less profits, less attractive (in an already horrible market) which affects GDP.

Okay. Let's cut taxes and see how business will work with crumbling infrastructure and an uneducated workforce.

You need more money for more projects, HSR will only be ONE - you then have to add an extra 40% on for non HSR project provinces - then you have other pet projects -- it is just the way things work up in Ottawa I love trains, but generally speaking - the countries that have train networks (good ones) are generally the ones that take more in taxes and spend more on government projects - so you are generally comparing apples to Oranges.

If the project planning is half-competent then high speed rail will make a profit which subsidizes money-losing regional trains. And you'll have to prove that railway subsidies are responsible for all of the higher taxes in European countries when, for example, Deutsche Bahn pays dividends to the government.

I would prefer Virgin run our railways than the current group at Via which don't seem to be very inventive....

It's a shame, because Virgin's rail operations in Britain are generously subsidized by a government (and charge outrageous fares) that at least pays lip service to improvements. Can't expect a man to innovate when he's starving day-to-day.