Chapter 4

http://timestranscript.canadaeast.com/news/article/529923

Summery

The article discusses a survey discussing whether New Brunswick should switch to a flat tax rate system instead of the progressive system it has now. It would attract new workers, as they would have to pay less tax and take home more money. But many are rejecting the idea because they believe those that earn more should pay more. Many that agree with the flat tax plan say that worker with a higher income still pay more tax even on the flat tax plan since 10% of $100,000 is more than 10% of $10,000. Not surprising that most people like the idea of paying less tax and having more money in their pocket to spend whatever way they like.

Connection

Chapter 4 talks about the tax brackets in Canada and the different taxing ways there are. Canada currently uses Progressive taxation. So the percentage of taxes paid is different among different incomes. The higher the income is, the higher the percent of tax one would have to pay. A lot of people do not think that’s fair due to the tax bracket and the marginal tax. One that makes more money doesn’t necessary get to take home more money, as most of the money would be paid off in taxes. A lot of people in New Brunswick are debating the idea of a Flat tax, which means there is a fixed percentage of tax one would have to pay. It challenges the current progressive taxation ways and makes people think about future taxation plans.

Reflection

This is a bit of a debate for myself. On one hand, I don’t like the current progressive taxation in Canada. I think it discourages people to take better positions and higher income because in the end, the raise isn’t all that much. If we were to have a flat taxation plan, the rich would still pay more than the poor. It would encourage people to take higher incomes and not worry about the money going to tax. It also avoids the tax bracket, which is a problem with the progressive taxation plan due to the fact that some people are just on the boarder and paying more but not earning quiet as much. The problem with the flat taxation is that there would be less tax going to the government and many benefits that we have now would be lost. This is especially troubling for the poor as they are the ones that are benefiting the most from all the public services. It is defiantly not an easy debate.

Chapter 3 Blog

Article:http://www.economist.com/world/britain/displaystory.cfm?story_id=12641944

With the increase in life span and obesity rates in wealthy countries, the demand for organs are growing rapidly. But the amount of organ donors have not increases at the same rate. In Britain, 3000 people received life saving organ transplants in 2007 while 1000 have died waiting for donors. 8000 are still on the waiting list. With a problem like this, the British government is looking to shifting into a ‘presumed consent’ system that most European countries use. Instead of willing donors signing up to donate, the presumed consent system is the opposite. Everyone is assumed donors unless they register their objection. But many question just how much this system would help, if at all.

 

The article deals with the government control over a countries organ market. The government can apply rules that influence the amount of organs that is being put out into the system. This affects the market because the more organs that are available the less there is for the need for people to go to other countries and get the transplants illegally. Also with more organs for transplants, less people would be on the waiting list. It saves the government taxes because it costs the government money to keep patients on waiting lists and many other problems may arise during the wait, which leads to more taxes being spent.

 

I think if the government does decide to use the presumed consent system, many more organs would be available for those in need of one. I do believe the problem for some is not because they do not wish to donate their organ, its simply because they didn’t take the time to go and get registered or do not know where the registry is. With the presumed consent system, it would eliminate those factors. Only those that have a strong opposition against organ donation would have to have the trouble of registering. Since a lot of people’s organs would be up for donation without the need of payment, the chances of an organ black market would be scarce therefore eliminate the problem of the survivor of the rich and death with the poor.

Chapter 2 Blog

Article: http://www.economist.com/business/displaystory.cfm?story_id=12481020

With the recent economic downfall, consumers are putting more thoughts into what they purchase. They are no longer buying things on impulse and instead take time to ask themselves the question “Do I really need this?” Big companies are hurt by the drop in demand and some small companies are close to bankruptcy. Retail companies cannot wait this economic downfall out due to the fact that retail revenues are quick to fall and slow to recover. Cutting labor cost causes problems in times like this when companies must struggle to get every sale. Even though prices are low, customers wait till the economy gets worse and for the price to dip even lower before making any purchases.

 

The article shows the operation of a market. The retail market is an interaction of buyers and sellers and it establishes a price for the goods. With more supply than there is demand for all the retail goods, the prices are reduced. In cases like this, companies usually have sales to bring up total revenue. But companies are discovering that many consumers are still not buying the cheaper product. They are often waiting for the price to get even lower before making a purchase. That can cause trouble for many companies. Also with less revenue, the less there can be spent for hiring workers, which may result in job cuts to be able to keep the supply price low. Today’s retail market is not of equilibrium.

 

I think due to the economic crash lately, people are not as willing to spend their money on unnecessary goods. Since retail shopping is a leisure expense and people have less money in their pockets, it makes them think twice about handing the money away. With many faced with possibilities of being laid off, people also begin to consider putting the money away for back up instead of spending it on a day out. I believe the retail market hasn’t seen its worst yet. The economy is still plummeting with little to no signs of it going up anytime soon. The worst is still yet to come for the retail market.

Economics

Oil prices have skyrocketed over the past few months and while its prices have fallen quiet a bit lately, the economy is not much better. The inflation has gone down because of cheaper oil and food prices though policymakers say it has not gone down enough. The wages haven’t gone up enough to match the inflation and the oil is costing companies a big chunk of money. Some companies are not able to make profits due to high oil prices causing some of them to shut down. That’s why policymakers need to be careful not to over stimulate the economy when there is an oil shock happening.

            When something is scarce and the demand for it is high, the price is usually high as well. And since gas is a non-renewable resource and getting scarcer as time goes, the price for it has gone up. But it’s not infinite; the price can only go do high. Once it reaches a point where it’s so high that the demand for it goes down, the prices will drop. Sometimes a company or a country cut the supplies of oil so there becomes an overwhelming demand for it that the price goes up and they can sell it for the high price.

            I believe oil prices are failing because people simply aren’t going to pay anymore for gas. A lot of people are already using other ways to get around instead of driving their cars. A lot of airlines have gone bankrupted because they weren’t making any money when they were in business and some were actually losing money every time they fly. So the demand for gas has gone down. Also since there was such a big inflation to housing and other good, no one was spending money because everything was just too expensive, there was a big drop in the market making everything go down in price. Though the prices are low, I don’t think the low cost will last because the oil countries are cutting the production of oil to make the prices go up once again.

http://www.economist.com/finance/displaystory.cfm?story_id=12209376