Melon,
"I enjoy your (il)logic trail. Now what does this have to do with quality-of-life?" Well if you took time to think about it, you'd realize that money spent in one place is money not spent somewhere else. This does effect quality of life. Its clear that Canada's perpetual defense spending holiday gives them more funds for things that effect the economic well being of the country. With the USA taking care of defense and security issues for them, they are able to direct resources into other area's.
Actually I have discovered that the Canadians tax rate based on yearly GDP vs. Federal budget is smaller than the USA. Currently, the Canadian Federal budget is about 12.5% of Canadian GDP. In the USA, the current Federal budget is just under 20% of GDP. Per capita tax level(federal budget divided by population) in Canada in US dollars is $3,148. In the USA the per Capita Tax level is $7,084.
One should note though that the USA has far more big businesses and corporations than Canada, and these companies generate a mass amount of money, a good percentage of which goes to the federal government, swelling the government budget.
So, what this does mean is that Canada is doing very well with a smaller federal budget per captita than the USA. Then again, Canada does not face many of the issues that the USA does. I'm not sure what the average tax rate for working Canadians is vs. the US tax rate, but just on a general per capita basis, the US government is taking in twice as much as the Canadian government.
As far as Bush Tax cuts, they are needed in order to get the economy moving. I do agree with the democrats though that the tax cuts should be focused on those making less than 100,000 per year since they are more likely to spend the money.
What really generates revenue for the government is when the economy is growing. A tax increase would actually not increase money coming into the government, because its negative effect on economic growth would offset any level of money gained from simply the increase of taxes. When Business and corporations are making lots of money and expanding, the government is getting a hefty cut of the profits. But what the government takes in from the economy falls as economic perfomance declines. Now is not the time for non-expansionary economic policy. A strong tax cut targeted and low and middle income earners, is needed.