Tuesday, June 10, 2014

Tuesday Morning Links

This and that for your Tuesday reading.

- Richard Shillington studies the Cons' income-splitting scheme for the Broadbent Institute, and finds that it's even more biased toward the wealthy than previously advertised:
• The average benefit of income splitting across all households is only $185, though nine out of 10 households will receive nothing. When one factors in the $3 billion cost in lost federal revenues that will result from this tax policy, income splitting stands to impose net costs on many Canadian households.

• To gain from income splitting, a family with children under 18 must have two parents in different tax brackets to share income. Thus single parent families (20.2%) and those with partners in the same tax bracket (28.9%) are automatically excluded from benefitting. The detailed calculations accounting for available refundable and non-refundable tax credits estimate that 54.1% of families would see no benefit.
Where significant benefits do accrue, they are to higher-income families, particularly those in a traditional model. This policy, which benefits a higher proportion of families in some provinces than others, stands to increase income inequality in Canada.
Which leads in turn to Rick Smith's observation:
"If the government set out to specifically design a policy to make inequality worse, this would be it," Smith said.

"This policy is an inequality generating machine."
- But then, the Cons would hardly be alone in pursuing increased inequality as a policy goal, as Toby Sanger highlights the Hudak PCs' proposed handouts to millionaires at the expense of the general public:
The biggest beneficiaries of corporate tax cuts would be the most profitable of Ontario’s large corporations and, in particular, banks, insurance and other financial service companies. Almost 40 per cent of the tax benefit would go to Ontario’s finance, insurance, and real estate sector, which only employs one out of 13 Ontario workers. This industry would get a tax break estimated at $957 million a year, rising above $1 billion by 2019 and totaling $7.6 billion over eight years.

The other top four industry sectors that would gain the most are trade, with about $3 billion over eight years, manufacturing with an estimated $2.4 billion, and professional services with an estimated $2.2 billion. Almost 80 per cent would go to these four industry sectors: a total of over $15 billion over eight years.

Ontario and federal corporate income and capital tax cuts over the past decade have already reduced the taxes paid by these four sectors by about $7 billion annually. And how much has total employment increased in these four sectors in return for these massive corporate tax cuts over the past decade? A grand total of minus 8,000 jobs – and that’s during a decade when total employment of other sectors in Ontario increased by over 650,000.

If $7 billion in annual tax cuts provided by the McGuinty, Harper and Martin governments didn’t lead to any job growth, it’s hard to believe that Hudak’s additional corporate tax cuts of almost $2 billion a year will do any better.
- And Hudak is being particularly obvious about his distaste for those worse off by refusing to even discuss the idea of reducing poverty - even after his party was shamed into supporting anti-poverty legislation not long ago.

- Meanwhile, Andrew Coyne looks at the prospect of another false majority in Ontario's election, and questions why Canadians still put up with first-past-the-post politics which can cause wild swings in governance based on small numbers of voters.

- Finally, Adam Riggio discusses the effect of creeping privatization and corporate funding on Canadian universities.

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