3. PaulYoung - Presenter
Bio
CPA/CGA
25 years of experience in Academia, Industry and Financial solutions
Youtube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg
4. Agenda
What is socialism
What are social programs
What is income re-distribution
Private Sector
Issues
Example/Cuba
Example/Venezuela
6. How does revenue flow for government?
Government gets money via taxation
DirectTaxation (Corporate / PersonalTaxation)
IndirectTaxation (PropertyTaxation, SalesTaxation, Excise/DutiesTaxation
Income from Crown Corporation
User Fees
Other taxation
8. How are social programs funded?
Taxation
Equalization
CST/HST
Direct funding
9. Why is business investment important?
Business Investment
Capital is required to develop and produce products for both domestic and international
exports (FDI and Domestic Capital)
Business requires inputs like labor and material to produce goods for re-sale. Consumer
spending drives 2/3 of the economy
10. Issues with Socialism
Productivity
People are not motivated to succeed in life
Too much government intervention deters FDI
Companies will invest where they can get a return on investment
No emphasis of efficient and effective uses of taxpayers dollars
Value for money
Government does not operate in a competitive environment
11. Examples / Cuba
Human Rights ranking low – Source - https://www.hrw.org/world-report/2016/country-
chapters/cuba or https://freedomhouse.org/report/freedom-world/2016/cuba
FDI – “Fixed capital investment in Cuba represents just 10% of GDP, which is half the
regional average.This likely won’t change until the embargo is lifted, as that would
facilitate the arrival of significant new foreign capital.Cuba currently requires billions
of dollars in investment in communication infrastructure, an update to its dilapidated
transportation network, and significant capital inflows into key productive sectors”. –
source - http://cubajournal.co/investing-in-cuba-the-approval-process/ or
https://hbr.org/2016/03/the-potential-and-pitfalls-of-doing-business-in-cuba
12. Example/Venezuela
In the oil fields that dot the country’s eastern savanna, pump jacks sit idle because of
parts shortages, abandoned oil barges rust onshore and drillers earning $9 a week
often skip shifts.Overall, the number of working oil rigs inVenezuela declined by a
quarter in the 12 months to September, according to Houston-based oil-field-service
company Baker Hughes Inc.There are now more rigs drilling in Oman, where proven
reserves are just 1.7% ofVenezuela’s. “I don’t think this government will be able to
stabilize production even if the oil prices start to rise,” said Luisa Palacios, Medley’s
Venezuela analyst.
Source - http://www.wsj.com/articles/venezuelan-oil-is-largely-staying-in-ground-or-going-
up-in-smoke-1477238401