- Pratap Chatterjee discusses our new age of robber barons - and how the wealthiest CEOs get out of paying any tax at all on massive sums of money:
The Institute for Policy Studies, a Washington DC thinktank, says that a chunk of the money Ellison spent buying Lanai should have paid for elementary school teachers and clean energy jobs, instead of fulfilling the billionaire CEO's vacation fantasies. That's one conclusion of their new report, "The CEO Hands in Uncle Sam's Pocket: How Our Tax Dollars Subsidize Exorbitant Executive Pay", which points out that Oracle took advantage of a 1993 loophole in tax law to designate $76m of Ellison's income as "performance-related pay", which allowed him to avoid paying any taxes on the money.- Meanwhile, Erin Weir points out that Vale's choice not to proceed with a potash mine in Kronau only highlights the fact that corporate decision-making has far more to do with other factors than with provincial giveaways - serving as all the more reason for Saskatchewan to ensure it gets fair value for our potash.
Dozens of US CEOs have cashed in on this major tax incentive at an estimated cost to US taxpayers of $9.7bn last year. Statistics provided by National Priorities Project suggest that the same amount of money could have paid for 142,625 elementary school teachers, or healthcare for 4.96 million low-income children.
"At a time of austerity, it's beyond absurd that billions of our tax dollars are pouring into executive pockets," says Sarah Anderson, a report co-author.
- And Jim Stanford notes that the key to growth in our auto sector involves public policy which actually values industrial development, not further attacks on employees:
Imagine, purely for discussion, that labour costs were reduced in Canada. Right now, with a very strong dollar, total nominal labour costs (including benefits) at the three companies average about $3 per hour more than in the U.S. (Real wages, adjusted for higher Canadian prices, are actually lower here.) Suppose that gap was eliminated and costs fell by $3 per hour. Would that usher in a new era of automotive prosperity?- Finally, Dene Moore reports on how the Harper Cons have gutted the exact review process which they plan to rely on as validating the construction of pipelines wherever Enbridge chooses to place them.
It takes an average of 29 hours of in-house shop-floor labour to manufacture one vehicle (including engine, transmission and final assembly). A $3 hourly saving therefore translates into an $87 reduction in the cost of a car. That’s not even enough to pay for deluxe floor mats in your new sedan, let alone underwrite the future success of an entire industry.
Meanwhile, the all-important policy context in Canada is currently making things worse, not better, for the auto industry. For example, the Harper government is aggressively pursuing free-trade deals that would eliminate tariffs on imports from three different auto-exporting powerhouses: the aforementioned Germany, Japan and South Korea. That would undermine the competitive position of domestic-made vehicles by about $2,000 per unit – outweighing our hypothetical labour savings by a 20-to-1 ratio. Similarly, the continuing flight of the loonie eats up any labour savings as fast as they can be tallied; indeed, the loonie’s 5-cent rise since June alone has added $3 per hour to Canada’s apparent hourly cost.
It seems almost pointless to even worry about labour costs when the broader policy framework that is so essential for industrial success is glaringly absent.