Thursday Morning Links

This and that for your Thursday reading.

- David Macdonald studies Canada's massive (and growing) wealth gap, and proposes some thoughtful solutions to ensure that growth in wealth results in at least some shared benefits:

Attempting to limit inequality through traditional measures like restricting RRSP contributions or introducing new tax brackets for high income individuals generally won’t apply to substantial wealth holdings. The wealth generated by The Wealthy 86 was done through creating or trading assets, mostly companies, not through saving and investing money in the middle-class sense.

One the largest legal loopholes for the wealthy in Canada is that capital gains are taxed at half the rate of normal income. If one Canadian makes $100,000 a year selling a company while another makes $100,000 a year working at a job, the worker will pay twice the tax of the business seller. Capital gains have an “inclusion rate” of 50%, meaning only 50% of the original total counts as income for tax purposes. Capital gains tax rates vary tremendously between OECD countries. Canada’s rate is presently not as high as France or Germany, but it is higher than countries like Austria that have no tax at all on capital gains. Canada also does not levy differential rates on short term speculation vs. longer term investing.

A combination of a higher inclusion rate and higher income taxes at the top of the income scale could go part way to offset the flood of wealth that is accumulating in the pockets of Canada’s wealthiest and ensure some of those benefits are returned to the majority of Canadians.

- Meanwhile, Canadians for Tax Fairness are encouraging citizens to demand a closer look at how much money is being lost to tax evasion. And Christopher Flavelle asks how much poverty a wealthy country should be willing to allow - recognizing in the process that we have a choice whether to condemn fellow Canadians to poverty, and that the Cons' preference has been to do so.

- PressProgress notes that the International Labour Office has taken the time to call out the Fraser Institute for equating attacks on workers with economic opportunity. Now if only Canada's media would do the same more often rather than serving as a resistance-free distribution channel for anti-labour messages.

- Andrew Leach reminds us that there are substantial risks involved in relying on the tar sands as Canada's sole engine for future growth. Mark Bittman expresses his rightful disbelief that we're failing to do anything meaningful to combat climate change even as the latest IPCC report identifies growing dangers to people around the world. And Linda McQuaig discusses the politics which have led to that inaction:

By focusing on the alleged failure of ordinary people to tackle climate change, we take our eyes off the real culprits behind the drapes — the fossil fuel industry and lickspittle governments, the best example being the one in Ottawa.

Big Fossil is the wealthiest and most powerful lobby in world history. Any serious attempt to tackle climate change would involve it giving up future profits that are truly staggering.

That’s because, according to the International Energy Agency and other authoritative sources, at least two-thirds of the world’s fossil fuel reserves will have to stay in the ground if there’s to be any hope of meeting the widely-agreed target of limiting warming to 2 degrees Celsius. (So far we’ve warmed the planet by just 0.8 degrees and that seems to be working out just fine, right?)
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Canada’s role in the climate debacle is particularly galling, given that we are sitting on one of the world’s biggest and dirtiest deposits of oil.

It’s a horrific bit of bad luck that, at this crucial moment in history, with time running out on the climate change clock, the world community is stuck with an aggressively renegade government in Ottawa, whose crass loyalty to Big Oil has made Canada part of the machinery of obstruction.

Stephen Harper’s government has undermined international climate negotiations, gutted Canada’s environmental review process, targeted environmental groups with harassing audits and championed unbridled oilsands development.

- Finally, Richard Seymour comments on how the right also managed to pitch austerity as the only option in the face of economic instability which in fact demanded public investment.