Saturday, October 21, 2017

Saturday Afternoon Links

Assorted content for your weekend reading.

- Jeremy Nuttall interviews Nelson Wiseman about the Libs' attempts to spin their way out of a trumped-up tax controversy - and how they're making matters worse in the process. And Murray Dobbin points out that there's a long way to go in making sure the wealthy pay their fair share: 
The dimpled face of Conservative leader Andrew Scheer in TV ads repeating the outright falsehoods contributed to a win-win-lose-lose outcome: The rich won by not having to play the game, small biz got a tax cut they didn’t deserve, the notion of tax fairness took a hit, as did any real increase in government revenue. The loss in revenue from decreasing the small business tax to 9.5 per cent will likely cancel out any increased revenue from what remains of the tax changes.

As the dust settles, we are left to puzzle over why Morneau and Trudeau chose this particular set of tax loopholes to close when there are so many others that would have been politically popular, would have forced the wealthy to defend their indefensible privileges, and would have brought in far more revenue.

One of the most outrageous giveaways which exclusively benefits the very wealthy is stock options. We lose a billion a year to this scam, which allows corporations to pay their executives with options to buy their company’s shares at a set, low, price. This loophole — the beneficiaries pay tax on just half the gains — also leads to CEOs driving up share prices in the short term to increase the value of their options, while discounting the long-term growth of the company.

The most costly loophole enjoyed by the wealthy is the capital gains exemption. The rationale for this break is laughable as it suggests that investing in the stock market is actually investing in new productive activity. In fact, it is nothing more than a tax break for gambling, which is exactly what anyone who invests in the stock market is doing.

There are other features of the tax system that basically reward people for already being rich — the benefits of RRSPs and Tax Free Savings Accounts accrue disproportionately to the wealthiest 10 per cent. The vast majority of Canadians — for whom these programs were supposedly established — come nowhere near the maximum contribution allowed. Capping the benefits could save billions.
The wealthy in this country can easily afford at least two new tax brackets targeting extremely high income. The myth so firmly rooted in the public consciousness and promoted by the media — that wealthy people create economic growth — needs to be challenged. It is useful to remember that in the late ’50s and early ’60s the highest marginal tax rate was over 80 per cent, and economic growth was nearly double that experienced over the past 25 years. 
Trudeau in the election campaign talked a lot about the scourge of inequality. The IMF report stated that, “between 1985 and 1995, redistribution through the tax system had offset 60 per cent of the increase in inequality caused by market forces.” Since that time, inequality in Canada has skyrocketed at the same time that the tax system failed completely to respond.
- But while Dobbin is unduly credulous about the prospect of the Libs actually living up to their promises, Luke Savage points out how their politics of spectacle are designed to distract from the type of elite-driven choices we'd expect from small-c and large-C conservatives. And the Globe and Mail has come around to the reality that Justin Trudeau is nothing but Stephen Harper with a sunnier brand, while Martin Patriquin reminds us that top-down control and contempt for the public are the historical norm for the Libs.

- Derrick O'Keefe writes that there's no room or time for neutrality in response to Quebec's Bill 62 which targets Muslim women for discriminatory treatment and isolation from basic social services. And Allison Hanes discusses the toxic mix of racism and sexism behind the bill, while Karl Nerenberg comments on its place in the broader politics of bigotry.

- Finally, Linda Nazareth highlights how Canada's social insurance system is grossly inadequate to deal with a new generation of corporate exploitation.

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