Saturday, September 30, 2017

Saturday Morning Links

Assorted content for your weekend reading.

- Linda McQuaig writes that it's long past time to review our tax system to make sure it isn't unfairly leaking money to the people who need it least:
These high rollers are able to avoid substantial amounts of tax by setting up private corporations and then funneling their incomes through these corporations.

The widespread use of this tax avoidance scheme only came to light because of a detailed 2014 study by public finance scholars Michael Wolfson, Michael Veall and Neil Brooks, who used previously unavailable data from tax returns to show that billions of dollars received by some of the richest Canadians had not been included in the calculation of their incomes.

Once this invisible income — amounting to an astonishing $48 billion in 2010 — is added to their reported personal incomes, Canada’s rich are considerably richer than we’ve been led to believe.
For instance, according to commonly used data (for 2011), the average income for those in Canada’s top 1 per cent was $359,000. But once the income they held in private corporations was added, the actual average annual income of these folks was a much heftier $500,200.

The higher up the income ladder, the more popular private corporations have become. Roughly 80 per cent of the richest .01 per cent of Canadians funnel income through private corporations and the amounts involved are substantial, the study found.

The average income for those in the top .01 per cent was $4.69 million a year — an enormous income. But once the income held in their private corporations was added, the average income in this privileged group actually jumped to a stunning $8 million a year.
The tax loophole for private corporations is, of course, just one of the loopholes benefiting the rich and we need a comprehensive examination of all of them, if we’re to begin addressing the growing inequality in our society.

But the skirmish over this loophole is an important battle. And it won’t be easily won, given the reluctance of the powerful to give up their tax breaks. Lined up with them is Conservative leader Andrew Scheer and the high-powered world of Bay Street tax practitioners, who are churning out technical arguments aimed at obscuring what’s at stake and leaving ordinary citizens inclined to leave such complex matters to the professionals.

That’s unfortunate, because what’s at stake here is vital in a democracy — a tax system that’s fair, with the ability to raise sufficient revenue to fund key public programs that benefit us all.
- Gregory Beatty talks to Erin Weir about the real effect of the loopholes under review. And Lana Payne links closing tax loopholes to improved minimum wages as basic steps toward shared economic prosperity.

- Speaking of which, Michal Rozworski duly critiques the TD Bank's attempt to fearmonger about a $15 minimum wage. And Martin Regg Cohn discusses why we should be skeptical of corporate interests trying to prevent workers from sharing in economic growth.

- Noah Smith examines how a focus on short-term returns leads to worse results in the long run both for individual businesses and the economy as a whole. And Matt Egan notes that wealth inequality is worse in the U.S. than it's ever been.

- Finally, Shawn Micallef comments on the dangers of cities not designed for basic resident safety - with a lack of bike infrastructure which creates imminent risks for cyclists serving as a particularly vivid example.

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