Re: In Defence of conservatism: a young man’s view on taxation

I have been educating people on economics and government policy for the past 15 years as an instructor of economics at Kwantlen Polytechnic University and through my role at the Fraser Institute, Canada’s top ranked think tank.

Every once in a while, I have the great pleasure of coming across a young person that is wise beyond his or her years, someone who takes the time to understand and research critically important economic issues. It’s these instances where you get the wonderful feeling that you’ve just met a future leader.

I haven’t met 15-year-old Sun Peaks resident Brennan Sorge, but he did nearly knock me off my chair as I read his column “In defence of conservatism,” in the May issue of SPIN Newsmagazine.

In his article Brennan tackles one of the most important economic questions: what is the appropriate size of government? Brennan has clearly given the issue great thought and his reasoning is as articulate as I have seen from a student, high school or university.

Brennan understands we need government involvement in the economy, and thus taxes are necessary. He also understands that the economy would fail to work if government taxed 100 per cent of our incomes. Somewhere between one and 100 per cent lays the optimal size of government, one that maximizes economic growth and social outcomes (i.e. crime rates, health and education levels). Brennan comes to the conclusion that around 33 per cent is the appropriate size.

Many academics have tackled this question, the most recent being Livio Di Matteo, economics professor at Lakehead University, who authored a book on the subject, Measuring Government in the 21st Century: An International Overview of the Size and Efficiency of Public Spending. Professor Di Matteo, concludes that economic growth is maximized when government accounts for approximately 26 per cent of the economy (measured by GDP).

With the size of government in Canada currently at 41 per cent, Brennan is certainly right to argue for “a smaller, more responsible government.”\

Brennan deserves high praise for a wonderfully researched and written article!

Niels Veldhuis, economist, president of The Fraser Institute, Vancouver, B.C.