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Interesting to see the long-term chart and how similar the Canadian and US federal experience is. But also interesting to think about the difference it makes to look at the issue at a general government level. At least over the last 20 years, general government outlays in Canada have averaged 43% of GDP, while in the US the average has been 37% (Source: OECD Outlook database). Any thoughts?

Michael:
Without looking at any more data, the difference might be attributable to greater outlays at the provincial-local level in Canada versus the state-local level in the United States.

Is the one big budget difference between the US and Canada the provision of universal single-payer health care in Canada? Most every other program has a counterpart except that one.

Vermont, interestingly, has just passed a single-payer health law. They are going to implement a Canadian-style system in full by 2017.

It will be interesting to see what Vermont's tax rates end up as and provides an good test for Hauser's Law.

Nice work, Liveo! If it's indeed like how Hauser's Law appears to work in the U.S., you'll find that the variation of Canada's tax collections as a percent share of GDP from year to year may be described by a normal distribution. That will give you the likely range into which the Canadian tax collections share of annual GDP will be observed for given levels of probability, say 68.2% of the time (+ and - one standard deviation) or 99.7% of the time (+ and - three standard deviations).

"Is the one big budget difference between the US and Canada the provision of universal single-payer health care in Canada? "

Not really, no. Health care spending is roughly equivalent in the two countries thanks to U.S. Medicare.

And by 'health care spending', I mean "government health care spending".

Ironman:
When you take the the percent changes in the tax revenue to GDP ratio and plot them, you do get a normal looking distribution. Here are the basic stats.

Federal Revenue to GDP Ratio (%)

Variable Obs Mean Std. Dev. Min Max

year 140 1939.5 40.5586 1870 2009
usa 140 10.7221 7.11996 1.79 23.85
canada 140 11.5059 5.62957 3.94 25.35
usa pct chng 139 1.76608 17.8845 -30.833 160.487
canada pct chng 139 1.53528 11.92244 -35.038 55.106

It seems to me that to change the ratio, all important governments have to make the change at the same time. The post-Great Depression change was only possible because everyone made it around the same time.

I think what's needed to change the revenue to GDP ratio is an international treaty to simultaneously change tax rates worldwide, so that capital flight cannot happen.

This is a bit of a strange post. Tax rates are conscious political decisions made by the party in charge (bad decisions are justified with colloquial references to faux scientific and economic nonsense like "Hausers Law"). Federal tax rates combined with income distribution and corporate revenues would suggest that the system is designed to collect between 15-20% rather than 15 - 20% arising out of the postulates of economic theory.

I don't understand the point of the post, is it supposed to be a history lesson?

A 1-2% fluctuation in revenues for huge economies like the US is 100 - 200 billion dollars, or 3.5 - 7 million jobs. When a country is at 8.5% unemployment that is significant... For Canada its 10 - 20 billion dollars or 350 - 700 thousand jobs, and we also have high unemployment. Its a silly "Law" and its designed to minimize the role of tax revenues. I think the title is poor, and takes away from the post... maybe you were trying to be funny?

Don't quite understand the last comment. I've provided a historical perspective on the federal revenue to GDP ratio for Canada and the United States. It's postwar behavior for the United States has been referred to by Hauser's Law. I've provided stats for Canada to see if it might also characterize Canadian behavior. I 've been told I have a dry sense of humor but if any humor was intended in this case I'm sure it was entirely subliminal. Cheers!

Sorry if I was unclear

I just sometimes get confused with the structure of some posts.

I appreciate the historical data, I'm just unclear as to why it was framed in terms of something like Hauser's law; when its not really a law, nor is it an argument, nor is it a theory. It just seemed like you were giving it credibility.

I just don't understand the context of the data presented that's all, nor do I get the intent of the post.

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