Saturday Morning Links

Assorted content for your weekend reading.

- Dennis Howlett highlights how the Libs are only making our tax system even less fair by overreacting to trumped-up criticism of a plan to close minor loopholes:

As​ ​the​ ​dust​ ​settles​ ​on​ ​the​ Trudeau government’s private​ ​ corporation​ tax​ ​reforms,​ ​Canada​ ​seem​s ​to​ ​be​ falling ​ further​ ​behind​ ​in the quest for​ ​tax fairness.

While​ ​the​ ​government’s​ ​decision​ ​to​ ​proceed​ ​with ​ ​income​-sprinkling​ ​reforms​ ​is​ ​positive,​ ​we are​ ​disappointed ​ ​​​the​ ​capital​ ​gains​ ​reforms​ ​were​ ​dropped​ ​and​ ​find the​ ​ ‘tweaks’​ ​to​ ​the​ ​proposals​ ​for passive​ ​income to be​ ​overly​ ​ generous.​

​If​ ​the​ ​changes​ ​to​ ​the​ ​private​ ​corporation​ ​tax​ ​rules​ ​are​ ​assessed​ ​on their​ ​own,​ ​they​ ​move​ ​Canada​ ​a​ ​slight ​ ​step​ ​forward.​ ​However,​ ​the​ ​appeasement​ ​of​ ​the​ ​vocal business​ ​lobby​ ​with​ ​a​ ​further​ ​cut​ ​in​ ​the​ ​small​ ​ business​ ​tax​ ​rate​ ​to​ ​9 per cent​ ​means​ ​the​ ​government ​ ​likely​ will ​lose​ ​more​ ​revenue​ ​than​ ​it​ ​gains, which​ ​ will​ ​contribute​ ​further​ ​to​ ​growing​ ​inequality.
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This​ ​is​ ​not​ ​the​ ​first​ ​time​ ​the​ ​government​ ​has​ ​ backed​ ​off​ ​on​ ​tax​ ​fairness​ ​reforms.​ ​The​ ​closing​ ​of the​ ​stock​ ​options​ ​loophole​ ​suffered​ ​the​ ​same​ ​fate​ ​as​ ​the​ ​ private​ ​corporation​ ​tax​ ​reforms.​ ​These are​ ​black​ ​eyes​ ​ for​ ​Canada’s​ ​tax​ ​system.​ ​Even​ ​the​ ​IMF​ ​has​ ​raised​ the concern ​that​ ​capital​ ​income (including​ ​profits,​ ​interest,​ ​ and​ ​capital​ ​gains)​ ​is​ ​distributed​ ​more​ ​unequally​ ​than ​ ​labor​ ​income.

Capital​ ​income​ ​has​ ​been​ ​rising​ ​as​ ​a​ ​share​ ​of​ ​total ​ ​income​ ​over​ ​recent​ ​decades,​ ​with​ ​a​ ​lower​ ​tax rate​ ​than​ ​labour​ ​income.​ ​The​ ​IMF​ ​states​ ​that​ ​adequate​ ​ taxation​ ​of​ ​capital​ ​income​ ​is​ ​needed​ ​to protect​ ​the​ ​overall​ ​progressivity​ ​of​ ​the​ ​income​ ​tax​ ​system​ ​and ​ ​that​ ​more​ ​equal​ ​treatment​ ​of income​ ​from​ ​capital​, ​as​ ​well​ ​as​ ​different​ ​forms​ ​of​ ​capital​ ​income, ​is​ ​critical if we want to​ ​avoid​ offering ​incentives​ ​for tax​ ​avoidance.​ ​ This​ ​means​ ​getting​ ​rid​ ​of​ ​the​ ​unfair​ ​tax​ ​treatment​ ​ of​ ​capital​ ​gains​ ​and​ ​stock options.

The​ ​next​ ​time​ ​the​ ​government​ ​moves​ ​forward​ ​on​ ​an​ ​ agenda​ ​for​ ​tax​ ​fairness,​ ​it​ ​needs​ ​to​ ​make it​ ​part of​ ​a​ ​larger​ ​package​ ​of​ ​reforms​ ​that​ ​looks​ ​at​ ​all​ ​the​ ​unfair​ ​tax​ ​expenditures.

- Likewise, Tony Keller discusses the terrible policy behind the Libs' attempt to change the subject from closing loopholes. And with Bill Morneau in the middle of the mess, Althia Raj reports that the Libs' defence that the Ethics Commissioner hasn't specifically said he's doing anything wrong when it comes to how policy affects his own wealth depends on her not actually bothering to check.

- Meanwhile, Jennifer Robson notes that plenty of federal policies which are supposed to help lower-income people aren't reaching their intended recipients.

- Linda McQuaig writes that the Sears pension fiasco should be a catalyst for change. And Tim Harper notes that nearly everybody aside from the Libs seems to be onside with protecting pensions.

- Finally, Sheila Block and PressProgress each examine some of Canada's persistent forms of inequality based on race.

Thursday Morning Links

This and that for your Thursday reading.

- Phillip Inman and Jill Treanor write about the debt time bomb facing UK households. Jim Edwards discusses how widespread underemployment has become the norm in the UK - making unemployment alone a misleading indicator as to workers' well-being. And Owen Jones highlights how those developments are the result of deliberate policy choices by the governing Conservatives:

“Stand on your own two feet” has been a convenient rationale to redistribute wealth and power to the top, though. The individual earns money by their own efforts – a baseless myth – and therefore taxes on the rich should be slashed to reward hard effort. But it is a sincere belief among the Thatcherite true believers who designed our society that only by breaking collective bonds can the individual truly flourish, and an entrepreneurial economy be built.

That promise has never been fulfilled. Indeed, in the past five years, consumer debt has surged by nearly a fifth. That’s because we have an economic model that, even when it generates growth, is incapable of increasing living standards for millions of people. Instead, it actively breeds financial insecurity and forces millions to rely on credit.
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The stripping away of secure jobs has had its impact, too, thanks to privatisation of utilities and deindustrialisation. The proliferation of zero-hours contracts, bogus self-employment and temporary and agency contracts increasingly defines modern work. This benefited employers, because casualised work is harder to unionise, and it means rights that workers once took for granted – such as a pension, or paid sick and maternity leave – can be stripped away. This is an intentional strategy by bosses, enabled by Thatcherite deregulation, and one New Labour failed to reverse. In 2009, the CBI – the bosses’ federation – called for the recession to be used to create a “flexiforce”, with a reduced core workforce and more casualised labour. And what does precarious employment mean? Sudden drops in income – and a consequent dependence on debt. The precariousness of work adds to the debt problem.
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Over the past seven years, the still-hostile Tories have imposed real-terms cuts on in-work benefits, slashed disability benefits, and punished the victims of the housing crisis by taking the axe to housing benefit. The explosion of benefit sanctioning, where benefits can be stopped for the most arbitrary reasons, has left some without any money at all. Those on the receiving end have often been compelled to make up the shortfall by borrowing. A government that professes itself concerned about debt pushes poor people into it daily.
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Thatcherism built our economic order on insecurity. Insecurity, we were told, was about setting the individual free. But since then we’ve learned much about insecurity, even if the Tories haven’t. It is oppressive. It leads to anxiety and stress. It forces would-be parents to delay having families. And, as we see, it saddles the individual with debt.

- Meanwhile, Chris Renwick details why a secure welfare state is more necessary now than it's ever been. And Dylan Matthews discusses new research from Mexico on the effects of a basic income - including a strong refutation of the complaint that a secure income will lead to inflation.

- Amy Wilson-Chapman charts how the wealthy around the world are hiding their cash from taxation. And Quito Maggi examines how Canada's tax system is becoming less progressive - both in the amount of revenue used for public purposes, and the source of the money collected.

- Finally, Jennifer Wells writes that limiting the use of income sprinkling is at least a small step forward toward tax fairness. But Luke Savage reminds us that the Trudeau Libs have allowed the wealthiest CEOs to avoid paying their fair share in taxes. And Jeremy Nuttall talks to Dennis Howlett about Canadians' fatigue with anti-tax rhetoric - particularly when it's being used to favour the people who already have the most.

New column day

Here, on how the Libs' weakness in closing even modest loopholes is allowing tax entitlement to win out over tax fairness.

For further reading...
- Justin Ling offers a useful look at the minor moves to rein in the abuse of private corporations in this year's budget. Konrad Yakabuski rightly argues that the entire fight is primarily over politics rather than revenue. And Susan Delacourt speculates that such a minor change affecting a small number of incorporated businesses will result in as much controversy as the GST.
- James Laxer discusses how the reaction to the Libs' proposed changes represents class warfare by the wealthy. And Don Pittis writes about the clash between the public's desire for a fair tax system, and entrenched interests looking to preserve their perks.
- For a reminder, David MacDonald studied Canada's unfair tax expenditures, including the billion-dollar stock option loophole. And Dennis Howlett lamented the Libs' decision to leave that wide open for exploitation.
- Finally, for examples of the type of revenue options on the table in the NDP's leadership campaign, Niki Ashton, Guy Caron and Jagmeet Singh have each proposed substantial revenue increases to fund needed social spending, while Charlie Angus' plan includes targeting corporate tax havens.

Thursday Morning Links

This and that for your Thursday reading.

- Dennis Howlett writes that a properly designed and fair tax system can reduce inequality both by ensuring support for the people with the least, and ensuring that the people capable of contributing the most actually do so:

We need to tackle inequality at both ends of the income scale. Everyone, even the rich, benefits from a more equal society with better population health, reduced crime, better educational and employment opportunities, and a more vigorous economy.

Recent progressive income tax reforms can only do so much. That’s because our tax system continues to be riddled by unfair and ineffective tax loopholes that allow the wealthy to avoid paying anything close to the top marginal rate on much of their income.

And we don’t have any real tax on wealth (as opposed to income). The Alternative Federal Budget 2017 (link is external), which CPJ and Canadians for Tax Fairnes (C4TF) have contributed to, proposed that the federal government tax wealth by introducing a minimum inheritance tax of 45 per cent on estates valued above $5 million. This would net an estimated $2 billion annually in new revenues.

C4TF has identified over $16 billion in unfair and ineffective tax loopholes that should be closed. The most egregious ones include the Stock Options Deduction, the Capital Gains Deduction, and the Business Entertainment Tax Deduction.

On the other end of the income scale, Canada’s tax system is also able to transfer benefits to low-income Canadians in a very efficient way. It has reduced poverty among seniors and families with children. But we still have high levels of poverty in Canada and we need to do much more.
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More than 12 per cent of working- age Canadians live in relative poverty. Provincial minimum wages and social assistance rates fall far below the poverty line. While child and senior poverty has been the focus of government anti-poverty initiatives in recent years, very little attention has been given to addressing working age poverty. The federal government has some tools available that could tackle this problem. A very cost effective and efficient way to deliver benefits to many low-income Canadians would be to boost the GST/HST credit. This benefit now costs about $4 billion. C4TF recommends doubling this amount for an additional expenditure of $4 billion a year. All of these enhancements to current programs would cost about $6 billion a year. They could easily be funded by closing some of the $16 billion of unfair and ineffective tax loopholes.

- Stephen Roach writes that people are increasingly skeptical of globalization in a form which restricts any benefit to a privileged few. And Daniel Boffey reports on the disproportionate role the UK and the Netherlands play in providing conduits to offshore tax evasion.

- Meanwhile, Max Lawson points out that states including Namibia, Malawi and Mongolia are putting the rest of the world to shame in their policy choices to rein in inequality. 

- Christine Saulnier and Tammy Findlay examine how to develop a universal child care system in Nova Scotia. And Raisa Deber discusses what we should fund through a universal medicare system - including plenty of services not yet included in Canada's system, but not unnecessary procedures which are all too often covered by the public dime.

- Finally, Aurangzeb Qureshi asks how we can give CSIS a blank cheque with the rights of all Canadians when it can't even avoid gross discrimination against its own employees.

Thursday Morning Links

This and that for your Thursday reading.

- Darlene O'Leary sets out the results from public consultations for a national anti-poverty strategy. And Dennis Howlett writes that our tax system could (and should) be set up to build a far more fair and supportive society.

- Meanwhile, Ryan Cooper makes the case for public services which are simple to use, rather than imposing avoidable stress on the people who are supposed to be benefiting.

- Jeff Minerd discusses how NAFTA has affected Canada's food supply by vastly increasing the quantity of unhealthy food imported from the U.S. And Scott Sinclair weighs in on the Trade in Services Agreement as the next threat to democratic control over public services.

- Didier Jacobs argues that the U.S. needs to rein in the use of shell corporations to facilitate corruption and tax evasion.

- But the CP reports that SNC-Lavalin is reorganizing itself to avoid taxes on income derived from Canadian P3 projects. And Dermod Travis notes that the B.C. Libs instead provided tax breaks to scam artists through their AdvantageBC crony support system. 

- Finally, Yanis Varoufakis comments on the false choice between the corporate establishment and the reactionary right - while appropriately labeling the latter the "Nationalist International". 

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Dennis Howlett comments on the distortions in Canada's tax system which redistribute money upward to those who need it least:

It’s time for Mr. Morneau to deliver a comprehensive and comprehensible tax strategy that will work in 2017 and beyond because, currently, tax breaks for the richest 10 per cent amount to almost $58 billion.

That includes the nearly $1 billion a year lost to the stock option loophole that Liberals promised — and failed — to ditch after pressure from CEOs and their lobbyists. Corporate tax loopholes cost another $23 billion.

That’s $80 billion not working the way it is supposed to. That’s over $80 billion the government is giving to the very richest, making them richer.

That $80 billion could provide affordable child care, free university tuition, clean water to First Nations reserves. It could kickstart a pharmacare program, address child and seniors’ poverty, boost international development funding and allow us to invest in affordable housing and clean energy.
Imagine how much more robust our communities and democracy would be if we spent that money wisely.

Imagine how much more competitive we could be if emerging Canadian companies were on the same playing field as those that currently use tax haven subsidiaries to avoid paying their fair share.

Money talks. Many Canadians might not appreciate the message they’re getting from this preferential tax treatment.

- Meanwhile, Richard Shillington and Robin Shaban offer the strongest critique yet of the Fraser Institute's torqued "tax freedom day" spin, while also noting that our tax rates are already on the low end within the OECD. And PressProgress wonders whether Canada's media will finally apply at least some scrutiny to anti-tax spin rather than reproducing it uncritically.

- Norman Farrell comments on the scandal that is the B.C. Libs' use of power contracts to systematically enrich donors at public expense. And Chrystia Freeland's announcement that the federal Libs will be delivering billions to the military-industrial complex after breaking promises of social investment signals that Justin Trudeau too is focused mostly on further entrenching existing wealth.

- Peter Prontzos reviews Keith Payne's The Broken Ladder as a useful discussion of the relationship between economic inequality and social problems. And Andre Picard comments on Canada's continued failure to provide anything approaching a reasonable standard of living and health to Indigenous children. 

- Finally, Stephen Tweedale sets out the case as to why Christy Clark shouldn't be able to force British Columbia into another election after the one which elected a majority of MLAs for change. And David Climenhaga reveals how the Wildrose Party is telling its members they can ignore political financing laws based on a plan to change them retroactively for partisan benefit.

Saturday Morning Links

Assorted content for your weekend reading.

- The Star's editorial board calls for an end to regressive federal tax breaks. And Dennis Howlett asks why the tax evaders who used KPMG's illegal offshoring schemes are being offered secrecy and amnesty for their attempts to siphon revenue away from the Canadian public.

- Michael Butler discusses how the Libs' insistence on continuing the Harper Cons' health funding model through bilateral agreements looks to undermine the universal Medicare we value so highly. And James MacLeod points out another predictable Trudeau broken promise, as the government which insists on pushing corporate-driven "free trade" agreements is reneging on promised transitional funding.

- Martha Friendly examines the sadly stalled state of child care in Canada, while calling for a national child-care program as one of the most important steps that can be taken toward greater gender equality.

- And finally, Guy Caron outlines the significance of his basic income plan as part of the Ottawa Citizen's series on the launch of the NDP's leadership campaign:

When you’re worried about putting food on the table, it’s hard to think about anything else. Planning for a better future for your family is next to impossible when you’re focused on making rent. That’s why I believe it’s time to introduce a basic income for all Canadians: to ensure that everyone is able enjoy a standard of living worthy of our great country.

A basic income policy is not only the right thing to do, it will also save us money. Less poverty means less stress on health care and public safety authorities. The evidence on this is clear. When people aren’t fighting to simply scrape by, they thrive. Despite what we’ve been led to believe, poverty and inequality are not inevitable.
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A basic income is good public policy, since investing in Canadians gives them the tools to participate fully in society, access better opportunities, and achieve financial independence. It will not only reduce costs for the government in the long run, but also result in greater economic growth and productivity, helping many Canadians to achieve their full potential. As one of the world’s wealthiest democracies, we have the means to tackle this challenge in a meaningful way.

Friday Morning Links

Assorted content to end your week.

- Hassan Yussuff and other labour leaders offer their take on how we can develop a more equitable global trade system:

The next challenge before us is to build on and improve all post-CETA trade and investment deals to ensure they meet a progressive trade model. We suggest several principles that should guide governments engaged in these negotiations.

First, civil society should be engaged, from the outset, in a democratic and transparent process. Agreements that are negotiated behind closed doors are bound to be viewed skeptically by citizens and provoke protest and social unrest.

Second, these agreements need to have iron-clad protections for public services. International treaties cannot be a short cut to privatizing valuable public services. Regulating services in the public interest cannot result in lawsuits between investors and states.

Third, these agreements need to allow for effective enforcement of labour and environmental standards. That includes sanctions in the case of violations of labour or environmental rights.

Finally, we need to emphasize the responsibilities of corporations and not just prioritize their rights. Eliminating dispute mechanisms granting special rights to foreign investors, which have proved disastrous in Canada, is an important first step toward that goal.

- Meanwhile, Dennis Howlett takes a look at the executive stock option loophole which the Libs are now preserving after promising to eliminate it as part of a more fair tax system. And Nicky Woolf reports on one intriguing example as to how inequality can be reduced through public policy, as Portland has passed a higher income tax applicable to corporations with disproportionate CEO compensation.

- Aaron Wherry explores the different meanings of "elites" which tend to result in confusion as to the real target of right-wing populist politics. And Michael Schwalbe highlights the challenges in speaking clearly about class, while pointing out the importance of framing a class analysis in terms of the end of exploitation.

- Jenna Russell and Maria Cramer write about the connection between grossly inadequate mental health systems and chronic homelessness. And Jennifer Saltman reports on Surrey's new pilot program to address those issues together.

- Finally, Bruce Campbell asks whether we've learned the lessons which should have been obvious from the Lac-Mégantic rail disaster.

Thursday Morning Links

This and that for your Thursday reading.

- Graham Lowe and Frank Graves examine the state of Canada's labour market, and find a strong desire among workers for an activist government to ensure improved pay equality and social supports. Oxfam reaches similar conclusions in studying workers and employers in Scotland. And Emma Teitel reports on Niki Ashton's work in reaching out to Canadian millenials to ensure their needs and expectations are taking into account.

- Meanwhile, Suzanne McGee writes that while the U.S.' national economic picture is improving slightly, any rising tide has left behind an increasing number of people living in poverty. And David MacDonald notes that we shouldn't overstate any progress from the new Canada Child Benefit - which seems to have been designed primarily to generate lower estimates of child poverty to based on unclear assumptions.

- Carimah Townes discusses how mass incarceration imposes unconscionable costs on the U.S.' economy in general, and vulnerable classes of citizens in particular.

- Jerry Dias points out that the federal government's internal report on the Trans-Pacific Partnership conspicuously omits well-documented costs from any cost-benefit analysis.

- Finally, Dennis Howlett comments on Google's elaborate web of tax avoidance schemes - and the need for Canada (like other countries) to ensure that it pays its fair share. And Ed Pilkington examines Scott Walker's fight against a recall election as a stark example as to how corporate money controls American politics.

Tuesday Morning Links

This and that for your Tuesday reading.

- Dennis Howlett discusses the public costs of allowing tax avoidance - as Canada could afford a national pharmacare program (and much more) merely by ensuring that the rich pay what they owe:

Eliminating tax haven use could save Canada almost $8 billion a year. That’s enough to cover universal public prescription coverage almost eight times over.

Time after time, budget after budget, poll after poll, those in charge make it sound as if we’re too poor as a country to afford the programs that would really improve Canadians’ lives. The fact that revenues are lost to poor policy on tax havens and loopholes is often conveniently ignored.
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At this stage of the game, the federal finance minister doesn’t need to raise taxes to pay for pharmacare. Bill Morneau just has to make sure that Canadian multinationals and wealthy individuals pay the tax rate we already have. That isn’t happening right now.

It’s simple. Canadians can continue to support a tax system that lets the richest avoid paying $8 billion in taxes annually — or we can tell them that the party’s over. Instead of ignoring what is happening in the Cayman Islands, Panama and other tax havens, we can urge our politicians to invest the taxes owing on those billions into services that benefit individuals, families, communities and the country as a whole.
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There is solid data supporting raising taxes in some areas. But that’s an argument for another day. The issue at hand right now is that we do have enough money for pharmacare — likely enough for public dental care as well. Through a series of misguided and outdated decisions driven by the tax dodge lobby, we are needlessly and destructively giving up that revenue.

It’s time to fix those old mistakes and use the tax system to help this country live up to its potential.

- Meanwhile, Owen Jones discusses a European Commission ruling finding that Apple can't validly avoid paying tax through a special arrangement with Ireland. And the Star rightly slams the Fraser Institute for presenting a misleading picture of where public revenue comes from and what it can accomplish.

- The CP reports on the Libs' plans to facilitate the use of temporary foreign workers for liquid natural gas projects in British Columbia - meaning that the last supposed benefit for the province of engaging in a dangerous industry seems to be as illusory as all the others. And Jeremy Nuttall notes that Justin Trudeau seems set to open the door even wider to entrench the use of exploitable foreign labour by multinational corporations. 

- Finally, Catherine Cullen reports on the effects of privatized health care insurance which are being presented in an effort to defend Canada's medicare system from would-be profiteers:

John Frank, a Canadian physician who is now chairman of public health research and policy at the University of Edinburgh, argues in his report that more private health care "would be expected to adversely affect Canadian society as a whole."

He cites research that suggests public resources, including highly trained nurses and doctors, would be siphoned off by the private system.

More Canadians would face financial hardship or even — in extreme cases — "medical bankruptcy" from paying for private care, he writes.

Frank even suggests there could be deadly consequences. He says complications from privately funded surgeries often need to be dealt with in the public system because private facilities are generally less equipped to handle complex cases.

"If such complications, arising from privately funded care, are not promptly referred to an appropriately equipped and staffed care facility, the patient is likely to experience death or long-term disability, potentially leading to reduced earnings and financial hardship."

Overall, "in my expert opinion," Frank writes, the change would reduce fairness and efficiency and "society as a whole would be worse off."

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Caroline Plante reports on Quebec's scourge of medical extra-billing and user fees (as identified by its own Auditor General). And Aaron Derfel notes that the federal government has done nothing to apply the Canada Health Act to rein in the practice.

- Erika Shaker highlights how federal funding for post-secondary education serves mostly to provide further advantages for students who already have the most.

- The Star makes the case for the Communications Security Establishment to answer for breaches of Canadians' privacy. And Kaveh Waddell discusses how big data in the hands of the corporate sector can lead to systematic discrimination against poor communities, while Dennis Howlett challenges KPMG's claim that confidentiality entitles tax cheats to avoid exposure.

- Susan Delacourt offers a few suggestions as to how Justin Trudeau could usefully use some political capital - with a particular focus on reversing the Cons' attacks on the political system. And Kelly McParland notes that the Cons themselves may be continuing down the path of artificial barriers against experience and competence with internal leadership term limits.

- Finally, Trish Kahle discusses the shared interest of the labour and environmental movements in a sustainable economy.

Tuesday Morning Links

This and that for your Tuesday reading.

- Simon Kennedy highlights another key finding in Oxfam's latest study on wealth, as the global 1% now owns as much as the other 99% combined. And Dennis Howlett reviews Gabriel Zucman's Hidden Wealth of Nations, while noting that like the works it seeks to update it may fall short of measuring how much is being hidden from tax authorities:

Zucman  dissects several failed attempts to reign in tax havens including the G20/OECD on-demand exchange of information, the American Foreign Account Tax Compliance Act (FACTA) (link is external)legislation and the European Union’s Savings Tax Directive. He estimates that globally about 8% of households’ financial wealth is held in tax havens. That works out to be about $7.6 trillion dollars or about $200 billion a year in lost revenue. He arrives at these numbers by comparing the national balance sheets to identify the difference between the assets and liabilities between nations. This seems like an elegant and simple solution to estimating what is hidden in tax havens.  But Zucman admits that this estimate “excludes a certain amount of wealth.”

James Henry, in a more detailed study, The Price of Offshore Revisited (link is external), done for the Tax Justice Network in 2012, estimates that the figure is closer to $21 to $32 trillion. Henry says Zucman vastly underestimates the role of developing countries and kleptocracy. He also notes the ommission of  offshore currency hoards, estimated at  $1.8 trillion. Henry also claims Zucman ignores estimates of private bank Assets Under Management -- now at least $13 trillion. Finally, Henry points out that Zucman ignores offshore nonfinancial assets like real estate, gold, precious metals, art, and ships, which is worth at least $10 trillion.

Henry plans to update his study which will likely show even more wealth going to tax havens. Zucman also acknowledges that his figure does not include corporate tax avoidance, which is often done legally, taking advantage of all the loopholes and weak tax laws that allow them to do this. Zucman does estimate that corporations are depriving governments of a third of corporate tax revenues by employing tax haven based subsidiaries to shift profits and lower their tax bill.

- Jessica Toale writes that the need for sustainable and broadly-shared economic development is just as obvious in the UK as in the countries normally associated with development goals.

- Deirdre Fulton notes that the U.S.' TTIP trade deal with Europe is rightly coming under fire for prioritizing the wealthy few over everybody else. And Hadrian Mertins-Kirkwood examines the findings of a new study showing that the Trans-Pacific Partnership will actually destroy jobs in Canada, while doing more to shift money from the bottom to the top than to boost economic growth.

- Max Stanfield discusses how postal banking would provide needed services in underserved communities while reducing reliance on predatory payday lenders.

- Finally, Ryan Meili offers a preview of what could be accomplished at this week's health minister summit. And Austin Frakt points out that even discussion about the unfairness of drug costs may be enough to reduce prices - though of course any resulting policy figures to be important to preserve the gains.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Dennis Howlett reminds us that we can raise enough money to strengthen our social safety net merely by ensuring that a relatively small group of privileged people pays its fair share. And Seth Stephens-Davidowitz examines the glaring nepotism which festers in the absence of some policy counterweights.

- But Robert Kuttner offers seven reasons why the 99% keeps losing on policy grounds despite having the obvious theoretical ability to ensure reasonable political outcomes. In a similar vein, Sean McElwee discusses the connection between racism and poverty politics in the U.S.

- Meanwhile, Samara's report card reminds us that Canada too has plenty to improve in ensuring representative and connected government, while Jordon Cooper points out some particularly egregious examples of pandering and spin from all three levels of government.

- Ashley Renders reports on the World Bank's recognition that it's both possible and necessary to decouple economic development from pollution and climate change. And Kai Nagata recognizes that we shouldn't see a liveable natural environment as a matter of partisanship or ideology.

- But Jordan Press writes that while the Cons were warned against eliminating environmental criteria for infrastructure spending, they went ahead with a political decision to treat a healthy environment as valueless anyway. And Ian MacLeod reports on the Harper Cons' political interference to ensure that Canadian art which might not suit the oil sector's agenda didn't get presented around the world.

- Finally, Ralph Surette rightly notes that the Cons are willing - and indeed eager - to tear apart Canada's social fabric in order to cling to power. But I do have to question when this became news.

Monday Morning Links

Miscellaneous material to start your week.

- Jon Talton discusses how the increased automation of our economy stands to disempower workers and exacerbate inequality if it's not combined with some serious countervailing public policy moves. Peter Gosselin and Jennifer Oldham comment on the broken link between productivity and wages. And Conor Dougherty and Quentin Hardy expose how employers are cheating employment laws by using game-style rewards for employees who overwork themselves.

- Meanwhile, Amien Essif points to Germany's paid internship model as one way of ensuring people aren't squeezed at their most vulnerable point while entering the workforce.

- Lucy Hooker reports on the continued connection between excess wealth and antisocial behaviour. And Dennis Howlett suggests that we not go out of our way to reward undue selfishness by gutting the CRA's ability to prosecute major tax evasion.

- H.G. Watson interviews Chris Hedges about the place of C-51 as a particularly extreme example of a disturbing trend toward monitoring and stifling free speech:

In terms of this particular bill, do you think that this fits into a wider trend of similar legislation in the western world?

Of course it fits into a wider trend -- not only into the western world but in Canada. Canadians are monitored as closely as U.S. citizens are as closely as British citizens or any other. This is a global phenomenon and the corporate state -- and Harper is representative of the corporate power and the corporate state -- seeks this kind of control because they know what is coming with climate change and the inevitable financial collapse that is looming now that global speculators are back on a spree as they were before 2008. With a flick of a switch essentially we have both the legal and physical mechanisms through the creation of massive security forces -- militarized police forces -- to in essence declare a militarized state both in Canada and the United States. Or should we have another catastrophic act of domestic terrorism anything like that, all the mechanisms are there... we have to fight it now.
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What would you propose as a way of them making sure people don't feel like they are alienated or isolated?

Don't take away their rights. Don't take away their right to privacy; don't take away their right to dissent.

Don't take away -- you know, a functioning democracy is a mechanism by which reform: incremental and peaceful reform can be carried out. When you [shut down] that mechanism you inevitably radicalize, especially your disenfranchised.

- But then, David Pugliese notes that the Cons are making no secret of their desire to silence anybody whose speech doesn't mirror tar sands talking points.

- Finally, Zunera Ishaq presents a compelling argument against the Cons' attempt to pretend their anti-Muslim bigotry is somehow intended to serve the people targeted:

My desire to live on my own terms is also why I have chosen to challenge the government’s decision to deny me citizenship unless I take off my niqab at my oath ceremony. I have taken my niqab off for security and identity reasons in every case where that’s been required of me, such as when I have taken a driver’s license photo or gone through airport security. I will take my niqab off again before the oath ceremony without protest so I can be properly identified. I will not take my niqab off at that same ceremony for the sole reason that someone else doesn’t like it, even if that person happens to be Stephen Harper.

I am not looking for Mr. Harper to approve my life choices or dress. I am certainly not looking for him to speak on my behalf and “save” me from oppression, without even ever having bothered to reach out to me and speak with me.

And by the way, if he had bothered to ask me why I wear a niqab instead of making assumptions, I would have told him that it was a decision I took very seriously after I had looked into the matter thoroughly. I would tell him that aside from the religious aspect, I like how it makes me feel: like people have to look beyond what I look like to get to know me. That I don’t have to worry about my physical appearance and can concentrate on my inner self. That it empowers me in this regard.

While I recognize that it’s not for everyone, it is for me. To me, the most important Canadian value is the freedom to be the person of my own choosing. To me, that’s more indicative of what it means to be Canadian than what I wear.

Saturday Morning Links

Assorted content for your weekend reading.

- Michael Rozworski observes that the NDP's $15 per day national child care plan has irritated all the right people - while still leaving ample room for improvement in the long run once the first pieces are in place. And PressProgress notes that the Cons' opposition to the plan is based squarely on their view that women fail to raise their own children if they have either careers or care support.

- Meanwhile, Simon Enoch, Canadian Doctors for Medicare and the Saskatchewan NDP caucus are all rightly critical of Brad Wall's attempt to sell for-profit, two-tier medical diagnostics (as a precursor to for-profit, two-tier treatment). And even Murray Mandryk is willing to acknowledge that this particular Wall idea is something short of magical.

- Heather Mallick writes that the consensus that we can't count on burning every available drop of fossil fuel as a resource management strategy extends from Naomi Klein to Mark Carney.

But Alison confirms that any charity daring to lend its voice to the cause will face an immediate crackdown from the Canada Revenue Agency at the Cons' behest - while gun advocates can apparently serve as political foot soldiers with impunity.

- Lana Payne reminds us of the historic misuse of EI funding by Con and Lib governments alike to fund general programs rather than benefits for the workers who have paid into the program. And Dennis Howlett proposes three relatively simple steps which could ensure that there's ample revenue available to live up to our social values.

- Finally, Jane Gingrich observes that strong and visible social programs may result in more predictable voting patterns than comparatively hidden social spending:

Voters in higher visibility states, defined here as that use the tax system to make spending more visible (i.e. by providing generous benefits and taxing them back) find it easier to estimate benefit levels. These voters also attach greater importance to welfare issues in electoral surveys.

The implications of these differences are subtle but important. Voters in higher visibility contexts are not necessarily more pro-welfare or in favour of higher taxes and spending. However, they do tend to weigh these issues more heavily in their political choices. Put differently, they tend to pick parties closer to them on welfare issues, rather than other issues. Of course, the relative importance of the welfare state to voters varies across time and place, depending on how political parties discuss these issues and the spectrum of choices that voters have.vi  Nonetheless, in general, voters in countries with high-visibility welfare states are more ideologically consistent in voting, and in particular, vote in ways consistent with their preferences on redistribution and state spending.

The implications of these findings for the welfare state in the UK are mixed. On the one hand, changes that make spending more visible to either recipients or taxpayers – such as the move to the universal credit for income support benefits – may actually heighten the salience of the welfare state. If voters can better understand what the state is doing, and for whom, they may begin to attach more weight to social policy in their political decision-making. Given how widespread benefit receipt is these movements could galvanise support for the state.

On the other hand, my work shows some of the most ideologically consistent voters in wealthy democracies are supporters of lower taxes in Scandinavia, a group that consistently votes for non-socialist parties. More visible spending can also clarify the revenue side, potentially creating support for anti-tax and spending groups.

Thursday Morning Links

This and that for your Thursday reading.

- Paul Buchheit highlights how inequality continues to explode in the U.S. by comparing the relatively small amounts of money spent on even universal federal programs to the massive gifts handed to the wealthy. Christian Weller and Jackie Odum offer a U.S. economic snapshot which shows exactly the same widening gap between the privileged few and everybody else. And Matt Cowgill examines the policies which tend to exacerbate inquality.

- Meanwhile, Thomas Edsall discusses how predatory businesses are turning others' poverty into further opportunities to extract profits:

Sentinel is a part of the expanding universe of poverty capitalism. In this unique sector of the economy, costs of essential government services are shifted to the poor.

In terms of food, housing and other essentials, the cost of being poor has always been exorbitant. Landlords, grocery stores and other commercial enterprises have all found ways to profit from those at the bottom of the ladder.

The recent drive toward privatization of government functions has turned traditional public services into profit-making enterprises as well.

In addition to probation, municipal court systems are also turning collections over to a national network of companies like Sentinel that profit from service charges imposed on the men and women who are under court order to pay fees and fines, including traffic tickets (with the fees being sums tacked on by the court to fund administrative services).

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Collection companies and the services they offer appeal to politicians and public officials for a number of reasons: they cut government costs, reducing the need to raise taxes; they shift the burden onto offenders, who have little political influence, in part because many of them have lost the right to vote; and it pleases taxpayers who believe that the enforcement of punishment — however obtained — is a crucial dimension to the administration of justice.

As N.P.R. reported in May, services that “were once free, including those that are constitutionally required,” are now frequently billed to offenders: the cost of a public defender, room and board when jailed, probation and parole supervision, electronic monitoring devices, arrest warrants, drug and alcohol testing, and D.N.A. sampling. This can go to extraordinary lengths: in Washington state, N.P.R. found, offenders even “get charged a fee for a jury trial — with a 12-person jury costing $250, twice the fee for a six-person jury.”

This new system of offender-funded law enforcement creates a vicious circle: The poorer the defendants are, the longer it will take them to pay off the fines, fees and charges; the more debt they accumulate, the longer they will remain on probation or in jail; and the more likely they are to be unemployable and to become recidivists.

- Laurie Monsebraaten reports that child poverty in Toronto is reaching epidemic levels, while Robert Reich looks at the connection between inequality and education.

- Mike De Souza reveals that the Cons have ordered public servants to start deleting e-mails - particularly ones which might show how political interference affects the civil service's work.And Jakeet Singh comments on Stephen Harper's aversion to sociology and other factual analysis as to how policies affect people.

- Finally, Dennis Howlett argues that all levels of government in Canada need to rein in tax evasion in order to be able to fund the public services we all value:

Most provincial and territorial governments rely on the Canada Revenue Agency to raise their revenue. Provincial services and programs need a revenue stream provided by an efficient and fair system. But under the CRA’s watch, Canadian money in tax havens has ballooned to an all-time high — an estimated $185 billion in 2013.  Almost $63 billion of that is in the popular tax haven of Barbados — an island paradise that is one-tenth the size of PEI, where the premiers are enjoying their late summer gathering.

They need to declare that the holiday is over. It is time bring our Canadian tax dollars home so they can be put to use doing useful things like funding health care and education.
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Provincial governments are responsible for nominating members of the CRA Board of Management. Those members could be directed to strongly encourage the agency to give higher priority to tax haven related compliance efforts. It is a strategy that could have important results.

The provincial representatives on the CRA Board of Management also need to ask:

• Why the CRA is wasting so much of its scarce capacity harassing development and environmental charities that have been critical of the Harper government.
• Why does the CRA refuse to work with the Parliamentary Budget Officer and calculate the Tax Gap to measure missing revenue as is done in many other countries? This could help them set priorities and do a better job of going after the most important tax cheats.
• Is going after the self-employed, small business and other “low hanging fruit” the best use of staff?
• Have cuts to the CRA’s budget undermined its ability to go after really big tax cheats who play the system? Has more revenue been lost than money saved from staff cuts?
• Is there sufficient technical expertise to follow up on leads from CRA’s tipster hotline?
• Does the Justice Department have the capacity to properly prosecute major tax cheats in the courts?

Tuesday Morning Links

This and that for your Tuesday reading.

- Dennis Howlett discusses what we lose when corporations are able to evade taxes, and points to some positive signs from the NDP in combating the flow of money offshore:

Federal and provincial governments lose an estimated $7.8 billion in tax revenues each year because of tax havens. The scale of the problem gets larger while the federal government cuts back on health care, food safety, rail inspections, the CBC and more.

True fiscal stewardship would recognize that staunching the flow of money offshore is the better solution. Canadian taxpayers pay the price when the CRA doesn't follow the money.
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There are some hopeful beginnings. Earlier this year, NDP National Revenue critic Murray Rankin proposed new legislation that would make it easier for government and the courts to crack down on those who are playing the system.

Rankin's bill focuses on proving "economic substance." Corporations must be able to prove a transaction has economic purpose aside from reducing the amount of tax owed. Setting up a storefront office in Cayman Islands or Switzerland and then sending large invoices back to the Canadian head office charging "management" or "licensing fees" would no longer be acceptable. Make no mistake -- there are a lot of Bay Street lawyers getting very rich taking advantage of this existing black hole in Canada's Income Tax Act.

Rankin consulted on this legislation with internationally known tax expert Robert McMechan. The Ottawa-based McMechan is the author of a recent book, Economic Substance and Tax Avoidance. He points out that the U.S, Australia and the U.K. are among the countries that have drawn the line between legitimate tax minimization and unacceptable tax avoidance.

- Karen Kamp interviews Deepak Bhargava about some ways to make the case to fight against poverty:

Americans who are struggling do not see themselves in abstract language like “the poor” or “poverty.” This is partly because such language is seen as quite pejorative in America. To be poor is to have failed in pursuit of the American Dream. In too many ways, people who are poor are reviled. The first thing we need to do is stop blaming people and start talking about their real lives.
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The entry point is connecting with common lived experiences such as not being paid enough to cover the bills, making difficult tradeoffs between basic necessities, inadequate or irregular work hours or not being able to save for retirement or college. Then you have to quickly connect it to shared values. In our research, the most powerful value was family — not only do people identify family as a primary identity but it is the fear or reality of not being able to provide enough for family members that motivates people to get into the debate or take action.
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Phrases like “struggling to make ends meet,” “living on the brink,” “working for family” describe lived experience and not identity. They also have the added benefit of crossing supposed class lines. At this point in the Great Recession, it’s become the norm to live paycheck to paycheck — whether those paychecks cover a trailer home or a two story colonial in the burbs. Thus, even if people self-identify as “lower middle class,” these tested messages resonate. 

- But then, as Joshua Sager notes, even the U.S.' general public is already broadly in favour of progressive policies - meaning that the greatest challenge is to translate that actual policy preference into political outcomes.

- Meanwhile, Stephanie Coontz discusses the new instability facing working families, while Emad Ahdavi highlights the threat to our long-term economic development posed by youth unemployment and underemployment. And Zach McDade offers some suggestions as to new investments which can both create jobs and address glaring social needs.

- Finally, Evgeny Morozov asks whether "algorithmic regulation" might render politics obsolete while effectively handing even more control over citizens' lives to the corporate sector. But I'd think there's a sharp distinction to be drawn between data-based governance and corporate-based governance - and a strong preference the former as distinct from the latter could actually encourage meaningful debate about the goals we ultimately want our governments to pursue.

Saturday Morning Links

Assorted content for your weekend reading.

- Joseph Stiglitz writes that while we should expect natural resources to result in broad-based prosperity, Australia (much like Canada) is now turning toward the U.S. model of instead directing as much shared wealth as possible toward the privileged few:

There is something deeply ironic about Abbott’s reverence for the American model in defending many of his government’s proposed “reforms.” After all, America’s economic model has not been working for most Americans. Median income in the US is lower today than it was a quarter-century ago – not because productivity has been stagnating, but because wages have.

The Australian model has performed far better. Indeed, Australia is one of the few commodity-based economies that has not suffered from the natural-resource curse. Prosperity has been relatively widely shared. Median household income has grown at an average annual rate above 3% in the last decades – almost twice the OECD average.

To be sure, given its abundance of natural resources, Australia should have far greater equality than it does. After all, a country’s natural resources should belong to all of its people, and the “rents” that they generate provide a source of revenue that could be used to reduce inequality. And taxing natural-resource rents at high rates does not cause the adverse consequences that follow from taxing savings or work (reserves of iron ore and natural gas cannot move to another country to avoid taxation). But Australia’s Gini coefficient, a standard measure of inequality, is one-third higher than that of Norway, a resource-rich country that has done a particularly good job of managing its wealth for the benefit of all citizens.

...

Australia should be proud of its successes, from which the rest of the world can learn a great deal. It would be a shame if a misunderstanding of what has happened in the US, combined with a strong dose of ideology, caused its leaders to fix what is not broken.   

- Meanwhile, Julian Beltrame reports that Canada's combination of corporate tax giveaways and gutting regulations has done nothing to change stagnant business investment. (Though as Armine Yalnizyan notes, that's sadly accompanied by the C.D. Howe Institute insisting on more of the same failed corporatist policies.) Don Pittis writes that stagnant wages are leaving Canadian workers with nothing to show for economic growth. And Dennis Howlett's mild optimism about Ontario's single-year budget is more than outweighed by his recognition that Ontarians are far worse off for decades of austerity and tax slashing:

For years now, Ontario governments (both Liberal and Progressive Conservative) have been inflicting austerity policies while failing to comprehensively collect revenue from large corporations and the wealthy. This sloppy fiscal management persisted - long after it was obvious that it just doesn't work.

Cuts to public services have caused a lot of pain and not much gain in terms of reducing deficits. Those cuts also boosted unemployment, slowed economic recovery and reduced tax revenue.

We can no longer afford the steep price tag that comes with avoiding revenue side solutions. Governments need to be clear about the real costs of tax cuts and loopholes.
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After so much tax cutting, Ontario kick starting a $1 billion reversal is a pretty small step. But it is a step in the right direction. But further steps in this direction are needed in the next budget, including possibly some modest but broader income tax increases.

There's a caveat though.

Boosting taxes on the rich and on corporations will not result in more revenue if governments don't close tax loopholes and take stronger measures to go after tax cheats. On this front too, though there were some encouraging words in the Ontario budget:

"Reducing corporate tax avoidance and closing tax loopholes is a priority for the Ontario government. The government supports the principle that everyone should pay their fair share of taxes, including corporations."

Word is that Ontario government will be pushing the federal government and the Canada Revenue Agency to step up their efforts. This is welcome news. Each and every Canadian province loses revenue from corporate tax avoidance schemes that take advantage of tax loopholes and offshore tax havens. It is time for a strong stand by all provinces at the premiers meeting scheduled for August. They can no longer avoid tackling what has become a chronic problem.

- Stephan Lefebvre points out how yet another set of free-trade spin is based on flat-out lies about the effect of NAFTA.

- Ethel Tungohan highlights the absurdity of the Cons' temporary foreign worker tinkering which does nothing at all to help actual workers of any kind:

If Kenney and Alexander truly want to protect temporary foreign workers from abuse, they would include robust measures that take into account the reality of these workers’ lives.

Workplace audits should be accompanied by a guarantee that abused temporary foreign workers will not be deported and will be given jobs in other companies for the duration of their stay in Canada.

Temporary foreign workers should be given open work permits that tie them to a specific industry, but not to a specific employer to mitigate abuse.

And, most importantly, the Canadian government should recognize that temporary foreign workers provide important economic contributions to Canada. Like other immigrants, they come to provide for themselves and their families. They should be provided pathways to Canadian citizenship.

If they are good enough to work, they are good enough to stay.

- Finally, today is another NDP Day of Action - this time focusing on climate change to celebrate Jack Layton's birthday. You can search for an event here - and I'll point out my home riding's canvass and barbecue in particular for anybody in Regina interested in getting involved.

Sunday Afternoon Links

This and that to end your weekend.

- Lana Payne challenges the Big Lie that right-wing politics are anything but antithetical to broad economic growth. Dennis Howlett weighs in on the Cons' choice to make the rich even richer through their tax policy. And Daniel Tencer juxtaposes the boom in Canadian corporate profits against the continued economic difficulties facing most people.

- Meanwhile, Paul Krugman notes that the most prominent attempt to challenge Thomas Piketty's work represents nothing but inequality denialism. And Auriandra compares the policy views of the 1% with those of the American public - making for a particularly important contrast given the propensity of the U.S.' political system to ignore the latter in favour of the former.

- But political capitulation to the wealthy few comes at a significant price. And Ian Welsh discusses the connection between the lack of parties offering a meaningful response to neoliberalism, and the rise of the fascist right in Europe:

Neo-liberalism is an effective ideology and set of policy prescriptions: not because it produces good outcomes for the majority of people (that’s not its purpose), but because it creates a constituency (oligarchs and their supporters/retainers) who are able to maintain it in power.

All ideologies eventually come to an end, however.  The oligarchs hate real left-wingism far more than they do fascism.  They have crushed the left.  Because no new coherent ideology can arise due to oligarchical control over the mechanisms of dissemination, all that remain are old ideologies.

Given no real and viable left-wing parties to vote for; given the failure of what they are told are left-wing policies (as with Obama being called a left-winger when his economic policy has been to give trillions to oligarchs); people will vote for the only other option: the hard right—the neo-fascists.

They are, at least, against the status quo.  The UK-IP wants to leave the EU.  They want less “free” trade.  And so on.  Given no other option for actual change, people opt for the parties actually offering it, even if those parties are noxious.

- Finally, George Monbiot highlights the cost of giving in to the doctrine of perpetual material growth:

The trajectory of compound growth shows that the scouring of the planet has only just begun. As the volume of the global economy expands, everywhere that contains something concentrated, unusual, precious, will be sought out and exploited, its resources extracted and dispersed, the world's diverse and differentiated marvels reduced to the same grey stubble.

Some people try to solve the impossible equation with the myth of dematerialisation: the claim that as processes become more efficient and gadgets are miniaturised, we use, in aggregate, fewer materials. There is no sign that this is happening. Iron ore production has risen 180% in 10 years. The trade body Forest Industries tells us that "global paper consumption is at a record high level and it will continue to grow". If, in the digital age, we won't reduce even our consumption of paper, what hope is there for other commodities?

Look at the lives of the super-rich, who set the pace for global consumption. Are their yachts getting smaller? Their houses? Their artworks? Their purchase of rare woods, rare fish, rare stone? Those with the means buy ever bigger houses to store the growing stash of stuff they will not live long enough to use. By unremarked accretions, ever more of the surface of the planet is used to extract, manufacture and store things we don't need. Perhaps it's unsurprising that fantasies about colonising space – which tell us we can export our problems instead of solving them – have resurfaced.
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The inescapable failure of a society built upon growth and its destruction of the Earth's living systems are the overwhelming facts of our existence. As a result, they are mentioned almost nowhere. They are the 21st century's great taboo, the subjects guaranteed to alienate your friends and neighbours. We live as if trapped inside a Sunday supplement: obsessed with fame, fashion and the three dreary staples of middle-class conversation: recipes, renovations and resorts. Anything but the topic that demands our attention.

Statements of the bleeding obvious, the outcomes of basic arithmetic, are treated as exotic and unpardonable distractions, while the impossible proposition by which we live is regarded as so sane and normal and unremarkable that it isn't worthy of mention. That's how you measure the depth of this problem: by our inability even to discuss it.

Sunday Morning Links

Assorted content for your Sunday reading.

- Robert Reich comments on the concerted effort by the U.S.' rich to exacerbate inequality - and points out how it's warped their worldview. And Dean Baker criticizes the spread of inequality by design:

And then there is the financial sector where Mankiw tells us that the extraordinary pay is compensation for the volatility of paychecks. That's interesting, except the vast majority of comparably talented and hardworking people would be happy to get the pay the finance folks get in the bad years. Much of the big money on Wall Street stems from highly leveraged bets that beat the market by seconds or even milliseconds. This provides as much value to the economy as insider trading, which it in fact it resembles closely.

It would be interesting to see what would happen to the big fortunes in the financial sector if it had to pay a small transaction fee, effectively subjecting it to the same sort of sales tax that is paid in almost every other sector of the economy. It would also be interesting to see what would happen to the private equity folks if they lost the opportunity for the tax gaming that is their bread and butter.

I could go on (read my non-copyright protected book on the topic), but the point should be clear. If the 1 percent are able to extract vast sums from the economy it is because we have structured the economy for this purpose. It could easily be structured differently, but the 1 percent and its defenders aren't interested in changing things. And the 1 percent and its defenders have a great deal of influence on the direction of economic policy.

- And Kathleen Raven discusses how children in particular suffer from the spread and entrenchment of poverty and inequality:

Researchers looked at data on 3,142 U.S. counties between 2005 and 2009. They found that rates of child maltreatment ranged widely, from 0.2 percent to 3.1 percent of children.

Using statistical methods to gauge income inequality, they found a steep rise in the rate of child maltreatment with rising inequality. The relationship held after researchers adjusted for poverty itself, and other factors such as the racial and ethnic makeup of regions, education levels and the number of people receiving public assistance income.

Where inequalities are most extreme, communities may become more polarized, with the affluent group influencing where public aid money goes, or what programs are made available in the community, said Dr. Ruth Gilbert, a clinical epidemiologist at University College London in the UK.

"Where the state or federal government is a key provider of services, such as day care and education," Gilbert said, "then you may have situations where poorer children mingle with middle-class kids and this helps create a better understanding between the two classes."

- Unfortunately, the needed end to the Cons' income-splitting scheme seems to have given rise to plenty of talk about how to develop the next-most-destructive option to destroy the federal government's fiscal capacity. Maria Babbage surveys a range of policies from the reasonable (child care and targeted benefits to lower-income parents) to the thoroughly top-weighted (general income tax cuts), while Barrie McKenna has little apparent interest in anything but the latter. And Dennis Howlett notes that there's precious little evidence to suggest a fair tax system is on the Cons' radar.

- Finally, Simon Enoch takes a look at the track record of prison food privatization in the U.S.