Economics and Taxation

Project: Canada and Saudi

Arabia
Argument:
In the context of the mature economic systems of Canada and Saudi
Arabia, taxation should be used to a moderate extent to provide basic standards
living for all people in society. The use of taxation is very important to provide
basic services for citizens, and help to stabilize the economy, but taxation should
have limits to allow for economic growth. Basic services such as universal
healthcare, education, transport, etc. Can become corrupted when privatized, so
taxes should pay for these services to protect the collective. Taxation is also very
important when a nation is going through a recession to try to provide jobs and
maintain the economy. However, too much taxation takes away from the
individualistic values that we hold dear. Taxation can make people view their
government as illegitimate especially when we see corruption, and a lack of
transparency within the government.
Canada's Economy
Market economy with a combination of private enterprise and government
regulation

Exports > Imports

Market thrives from rich supply of iron, ore, nickel, zinc, copper, gold,
hydropower, petroleum, lead, fish, wildlife and coal

Driven by oil, automotive and lodging

Income tax is collected up to 33% of citizens overall annual earnings

Universal Health Care provided to all citizens

Saudi Arabias Economy

Oil-based economy

Worlds leading oil exporter

Open market policies and free trade is endorsed

Absolute monarchy ruled by King Salman bin Abdulaziz Al Saud

2.5% religious tax mandated by Islamic law

Tax burden= 4.6% total domestic income

Judiciary branch is not separate from the executive branch

What Principles of Individualism are Present Within
Each System?
Canada Saudi Arabia
Private Property: Through the oil and gas and agriculture Competition: the government encourages
industry especially, Canada's government promotes capitalism and businesses competing to
workers and farmers to proudly own their own companies create better products at lower costs.
with motive of consumer demand and profit.

Self-Interest: In December 2011, Canada pulled out of the

climate change regulating accord called the Kyoto Accord.
Putting themselves and jobs in oil and gas first, Canada
demonstrated their value of allowing citizens to pursue
their economic interests without fear of regulation.
Competition: Dollar voting and consumer sovereignty are
encouraged which provides private enterprises a motive
to create the newest, most efficient and reasonably
priced products
Economic Freedom: they have an extremely low
tax burden for corporations.
Self Interest: people are allowed to pursue their
own economic interests through consumer
sovereignty, as long as it doesnt interfere
with islamic practice.
What principles of collectivism are present within the
systems?
Canada
Public Property: Canada is a large country with a
land area of 9.985 million km^2. 89% of this land
is publicly owned by the government for the
monarch. This is where it gets it name Crown
Land.This includes National Parks, Indian
Reserves and Canadian Forces Bases.
Economic Equality: The Canada Act of 1982
amended the constitution to ensure that poorer
provinces were entitled to economic equalization
payments. This is one example of how Canada's
federal and provincial governments redistribute
wealth through tax dollars to strive for economic
Saudi Arabia
Public Property: all private property is subject to
sharia law, and because the government is
non secular, the state can claim a lot of
property. Up until 2016, the citizens had
limited to no property rights or property
ownership.
Economic Equality: the government controls and
regulates most of the exports of the country,
and so the state has become very wealthy
because they are the second leading oil
exporter in the country.
Determine the tax dollars paid to the government
each year.
Canada Saudi Arabia

$127.1 billion Approximately $20 million

What kinds of social services are provided for all
peoples in these countries?
Canada Saudi Arabia

Universal Health Care system called Medicare is The government is funding a small public
provided to all Canadian citizens based on their healthcare system to provide care to all
territories insurance plan. citizens. They are working to increase
immunization and pharmaceutical programs.
The Old Age Security Program: This is Canada's
largest pension program. It allowed for Social insurance for disability, death, and old-age
Canadian citizens aged 65 or older to receive
pension, for the self-employed.
monthly payments from the government in their
older age. There are however, still some
Special benefits for government workers.
requirements for this program.

Canada Child Benefit: This social program is tax free.

It allows for eligible families to receive monthly
What Are the Pros and Cons of the Taxation System
in Canada?
Pros:
Higher tax rates allow for universal health care which benefits the whole country

Many other social services are available because of the $127.1 being paid in taxes to the government each
year

Equalization payments allow for poorer provinces economies to grow, thus promoting consumer sovereignty
and dollar voting

Tax dollars pay for a large majority of education costs, which creates for a high rate of employment later

Maintenance of vital infrastructure

Cons:
The tax bracket system allows for simply a $1 difference to change the amount of tax any given citizen pays
from 15%- to 20.5%, 20.5% to 26%, 26% to 29% and 29% to 33%. This dollar can drastically impact the
What are the pros and cons of the taxation system in
Saudi Arabia?
Pros:

Citizens pay no taxes

Goods and services are cheaper

Dollar voting will only help self-interest of individuals

Citizens dont need to be worried about their money being

used unjustly

Cons:

Limited social services

How does Canadas system fit into our argument?
Canadas taxation system fits into our argument of a moderate standpoint
very well. In the Canadian economy, there are 5 different tax brackets that salaries
fit into based on their dollar amount. These tax brackets however, only go up to
33%. This allows for social services to be provided to Canadian citizens but also
allows for citizens to achieve self-interest and economic freedom without giving up
too much wealth. Some of the successful social services moderate taxation has
provided Canada with include: Universal Health Care, Child Benefits and Old Age
Pension. However, even with a moderate taxation system Canada has been able
to become a prosperous, capitalist nation that values principles of collectivism as
well as individualism. In order to for moderate taxation for standards of living to
work, a country (like Canada) must successfully balance the collective as well as
the individual, and then an economy has the potential to fully prosper.
How does Saudi Arabias system fit into our
argument?
Saudi Arabia somewhat fits into our argument, because it demonstrates
the economic growth we see when citizens are not burdened with immense taxes.
However, it only somewhat fits into our argument because they are in an
economic boom right now, as they are the leading oil producer in the world, and
second leading oil exporter in the world. This allows for the state to provide the
nation with social services without having to pay taxes. Due to this, they are an
exception to our argument as most countries are not in huge economic booms that
enable them to care for their citizens like Saudi Arabia can. Most nations, must
find a balance between taxation (caring for the collective) while ensuring that
individualism is still very important.