Chapter 4- Direct Tax

    Recently, an article titled Canada-The Land That Scandal Forgot, analyzed quite a few of the recent tax scandals from around the world. The author of this article mentioned outrageous tax scandals of the United States, of Britain, of France, of Italy, of South Africa, as well as those of Mexico. While the author also mentioned a tax scandal of our very own country, Canada, it was concluded in this article that the Canadian tax scandal was nothing compared to those of the other countries. Our tax scandal was bland, and the Canadian citizens must 'glamorize [...] and perversely virtuous politics as colourful [which is] not an insuperable challenge' (paragraph 5).

    In the Working with Economics textbook, we are told that direct tax is 'one imposed on the individual who should pay the tax' (page 126). Within all of these scandals mentioned in this article, direct tax is a part of it. The governments of each country basically applied a direct tax to it's citizens and then used that money for other reasons other than benefits for their citizens. As well, some governments even applied legislative costs onto the tax payers. That way the government people wouldn't have to pay for their own messes, but the tax payers would-probably not even realizing where their money was going.

    In my opinion, i think that what the governments have been doing with the tax people's money is irresponsible and dishonest. To think of a government, the people supposedly in charge of our country, participating in such scandalous acts is quite worrisome. While the author of the article thinks we should be glad Canada hasn't had any scandals that could compare with that of other country's, i think we should become much more aware of where our tax money is going. If it can happen in other countries then surely, it can happen here.

Link: http://fullcomment.nationalpost.com/2010/08/14/conrad-black-canada-%E2%80%94-the-land-scandal-forgot/

Lorena Laurencelle

Chapter 3 - Natural Monopolies

     A recent article in the Economist, Social Media: Is Facebook really worth $50 Billion, commented on the idea of Facebook being a natural monopoly. While Myspace used to be the most popular social network on the internet, it has quickly been taken over by Facebook. With investors funding a total of $50 billion dollars into the development of Facebook itself, other social networks aren't as lucky. Twitter, for example, has only a 'mere fraction of Facebook's [...] which are said to have hit $2 billion last year' (paragraph 5). In spite of Facebook's popularity, it is no surprise that investors are 'falling over on another to get their hands on Facebook's shares' (paragraph 8).      

     Throughout chapter 3 in the Working with Economics textbook, we learn a lot about natural monopolies and how they work. First of all, a natural monopoly is defined in economics as an industry where the fixed cost of the capital goods is so high, it's not even profitable for a second firm to enter and compete. So basically, no other companies can barge into that industry selling the same product or service. The article also does a good job at explaining why Facebook should be considered a natural monopoly in the social networking industry. With Facebook currently being the number one go-to social network in cyberspace, all the other similiar websites should start thinking about shutting down as there really are no more reasons for them to stay.

     As a frequent Facebook user myself, i know what the benefits of using that website are. Additionally, with all the extra money being put into the website by investors, it's no surprise that Facebook will get even better in the near future. Perhaps people don't want to let go too quickly of all the other social network websites, but sooner or later, all people will crave for is Facebook. And rest assured, Facebook knows.

Link: http://www.economist.com/node/17853336?story_id=17853336