Federal Spending

Mason Gaffney: Canada's System of Revenue Sharing

The federal aid in Canada goes to provinces, whereas in the United States it goes to specific cities, The U.S. Congressman likes to have his fingerprint, as they say, on every dollar that goes from Washington. The Canadian provinces are much larger and stronger, and fewer than the American States. There is much more horizontal balancing among provinces in Canada than there is among States in the United States. The Maritimes for instance get about 50% of their provincial revenues from equalisation entitlements. Fifty percent. Nothing in the United States matches that. In fact, if you look at the U.S. Constitution, it's quite specifically planned to prevent that sort of thing. Equalisation is not what the Founding Fathers had in mind. On the contrary, there is a provision which you may be familiar with which says that direct taxes will be apportioned among the States according to their respective populations. So in the States the idea has been: Tax the States according to their population and then give the money back according to political power. In the United States Senate it means that the smallest State has just as much clout as the biggest State or would have if their senators weren't so merchantable. (I mean, in California when we need something we just look to Nevada or one of those places for a Senator who is having difficulty raising funds for his next election. But that's another story.) ... read the whole article