The Commons: Ted Menzies challenges everyone to find a tax increase in the budget

By Aaron Wherry - Tuesday, March 26, 2013 at 6:13 PM - 0 Comments

“You know, there’s two schools in economics on this,” Mr. Harper once said, “One is that there are some good taxes and the other is that no taxes are good taxes. I’m in the latter category. I don’t believe any taxes are good taxes.”

“I give you my word: As long as I will be prime minister … there will be no new taxes,” Mr. Harper had said two years before that.

Perhaps that was merely a commitment to refrain from inventing entirely new taxes that had not previously existed. But otherwise it is to wonder if the Prime Minister was a touch disappointment when he opened the budget book last Thursday and found that, not only hadn’t the Finance Minister eliminated all taxes, but he’d seen fit to budget for several increases in the cost of civil society. If he was heartbroken to read as much, it is surely a testament to Mr. Harper’s commitment to party loyalty that he has not yet gone rogue and pronounced the budget to be unworthy of his support.

As it is, it must have been rather odd for the Prime Minister to have to stand in his place this afternoon and defend such a document.

First for the opposition this afternoon was David (Furious D) Christopherson, the NDP deputy whose floppy hair has a way of bouncing in time to his indignation. Continue…

A tax on imported blankets

By Aaron Wherry - Tuesday, March 26, 2013 at 8:10 AM - 0 Comments

Mike Moffatt reviews the Harper government’s changes to the tariff system.

The 2013 Budget would decimate the GPT category, and apply the higher MFN rate to imports from the 72 countries losing GPT status. The countries losing the GPT classification comprise some of Canada’s largest trading partners and include Argentina, Brazil, China, Hong Kong, India, Indonesia, Malaysia, Russia, Singapore, South Africa, South Korea, Thailand and Turkey. Beginning Jan. 1, 2015, an imported blanket (made of synthetic fibres) imported from one of these 72 countries will be assessed the higher 17-per-cent MFN rate, rather than the 12-per cent GPT rate – making them more expensive to consumers.

By my estimate, there are 1,290 product classes where the existing GPT rate will be replaced by a higher MFN rate. It is difficult to say where consumers will feel the biggest hit from these rate increases, since import statistics at the product level are unavailable to the public. The tariff on bicycles is going up significantly (from 8.5 per cent to 13 per cent), as well as scissors (from 0 per cent to 11 per cent), rubber sandals (0 per cent to 16 per cent), wigs (0 per cent to 15.5 per cent), vinegar (0 per cent to 9.5 per cent), petroleum jelly (0 per cent to 7 per cent), carving knives (0 per cent to 7 per cent), perfume (0 per cent to 6.5 per cent) and artists’ brushes (0 per cent to 7 per cent). The tariffs on some less common goods are increasing as well, including rocket launchers (0 per cent to 7 per cent), diesel-electric locomotives (5 per cent to 9.5 per cent), swords (0 per cent to 7 per cent) and grand pianos (0 per cent to 7 per cent). Fortunately, the tariff on nuclear reactors will remain unchanged.

In defending the changes yesterday, Ted Menzies said the general preferential tariff program was a “foreign aid program.” This is basically true.

But if you’d like more information on the changes, you might consult the budget. Specifically Annex 2. Which is entitled “Tax Measures.” (The previously leaked plan to eliminate tariffs on hockey equipment and baby clothing is covered under “Supporting Families and Communities.”)

Meanwhile, Stephen Gordon deems this the anti-trade budget.

Thomas Mulcair on taxes

By Aaron Wherry - Friday, March 15, 2013 at 10:54 AM - 0 Comments

The NDP leader reminds Bloomberg that his party opposes the cuts to the corporate tax rate that have been made by the Harper government. The NDP’s budget submission in 2011 recommended setting the rate at 19.5% (the NDP’s 2011 platform committed to maintaining a corporate tax rate lower than the rate in the United States). The NDP also proposed reducing the small business tax rate and establishing a job creation tax credit. In its 2012 budget submission, the NDP asks ”the federal government to tie financial incentives to real job creation.”

More interesting, Mr. Mulcair seems to eliminate any possibility of a tax-the-rich proposal from the federal NDP.

Mulcair said he would not raise taxes for high-income earners because marginal tax rates in the country are already too high. “Absolute guarantee it will never be part of my program,” he said. “It’s never been my policy and it never will be.”

Last year, the Ontario NDP successfully convinced the Liberal government to accept a surtax on those earning $500,000 or more in return for the NDP’s support for the government’s budget. And the surtax enjoyed widespread public support.

More than three-quarters of people surveyed — 78 per cent — like her idea with only 17 per cent opposed and 5 per cent unsure, according to the Forum Research poll. “It’s hugely popular. You never see that — that’s huge,” Forum president Lorne Bozinoff said Wednesday.

‘I would consider raising the GST but only if needed’

By Aaron Wherry - Monday, January 14, 2013 at 10:34 AM - 0 Comments

Amid all else on Friday afternoon, Martha Hall Findlay released a statement to explain her views on the GST.

The Liberal Party I lead will…

…NOT be afraid of discussing policy in public. The current hoopla over whether I would, or would not, raise the GST highlights exactly what ails politics in this country: fear of speaking out.

140 character tweets, sound bites taken out of context, and fear of attack ads all, shamefully, now seem to rule our public discourse. Here is what I really think about the GST. 

- Yes, I have said that I would consider raising the GST but only if needed. I supported the GST when it was brought in, and was among the most vocal in calling Harper’s politically-motivated reductions from 7% to 5% bad economics. It would be hypocritical of me now to say otherwise.

- I do not advocate any tax increases right now – not GST, not corporate taxes, not personal income taxes – not while we’re still struggling with the economy and the sluggish exit from the financial crisis. Indeed, this is exactly what Harper has done with his increases in EI premiums, a tax on jobs which I object to.

- I do not advocate a rise in the GST, even when the economy is stronger, to the exclusion of other things. For example, I would prefer a price on carbon, which would do double duty by also improving our environment.

- I would consider raising the GST if, using just one example, increased costs of aging demographics, health care and the all-important education for our next generations are not sufficiently off-set by spending cuts elsewhere.

Needless to say, that level of discussion never gets into tweets or sound bites or headlines.  Only the ‘sexy’ attack parts do. And that is wrong – because Canada must engage in this debate.

AFRAID TO SPEAK OUT

Are we so afraid of Harper and his attack ads that we can’t even debate significant economic issues in public? Have we no confidence left whatsoever? No wonder Canadians have lost respect for Liberals – and for politicians generally.  I refuse to let us conduct ourselves out of fear. We MUST be able to have these discussions. 

We keep talking about needing more engagement – how do we do that, when we ourselves refuse to engage in any real debate?  

TAXATION AND SPENDING:

We have taxation and we have spending. Determining the right mix is a critical part of Canada’s economic and social prosperity. Canadians should expect politicians to have the courage to engage in this kind of debate and discussion – and not to be afraid of doing so.

- No sensible Canadian objects to at least some level of taxation- it’s how we pay for roads, sewers, health care, old age security, passport services, immigration issues—all manner of government services that significantly improve our society. We understand that some taxation is needed in today’s world.

- What form it takes, and how much, paid by whom, and how it should be used, should always be part of our public policy debate. We can always do better.

- Despite initial concerns, Liberals quickly recognized that a value-added tax was a sensible form of taxation. We have supported it ever since.  

- Liberals were therefore, and appropriately, among the most vocal in condemning Harper for his ‘cheap politics’ of reducing the GST from 7 to 6 and then to 5%.  Because cheap politics is exactly what it was.  It certainly was bad economics.

- Many believe that Canada now has a structural deficit, thanks in large measure to those GST cuts.  If Harper had correspondingly cut spending, then that’s a different story – but he didn’t. His first two years in government, while cutting the GST, he spent the two largest-spending budgets in Canadian history. This BEFORE the financial crisis hit.

This is close to the position Michael Ignatieff seemed to try to articulate before abandoning it entirely: possibly raising the GST if necessary at some point in the future.

The question for the Liberal party remains not so much the likelihood of Conservative attacks, but whether the party is capable of responding: with a leader who can handle the attacks and a party that is agile enough and financially prepared to respond with its own ads.

Who wants to raise the GST?

By Aaron Wherry - Thursday, January 10, 2013 at 1:09 PM - 0 Comments

Former Liberal MP Martha Hall Findlay does, apparently.

An important thing she mentioned was that if she were elected, and the LPC won a majority government (and only a majority), she would raise the GST.

The former and current Liberal leadership candidate seems not to deny this Redditor’s account.

Former Liberal leader Michael Ignatieff flirted with the possibility of proposing an increase, but then became resolutely opposed to the idea.

Stephen Gordon has argued that the cut to the GST is responsible for the current federal deficit.

The trouble with taxes

By Aaron Wherry - Tuesday, January 8, 2013 at 1:35 PM - 0 Comments

The Globe wonders whether this will be the year we learn to love taxes.

It’s all part of a remarkable embrace of taxes, not only for the wealthy but for all of us. Portugal, Spain, Ireland, Italy, Greece, Britain, France, Japan and the United States have all introduced tax increases to cover growing national debts and costly stimulus programs. According to the Organization for Economic Co-operation and Development, the average tax burden increased in 26 out of 34 OECD countries last year.

Whether these tax measures can come close to solving fiscal problems remains to be seen. More interesting is the shift in our attitudes: The language around current tax debates taps into social values of fairness and equality as well as responsibility – the latest measure of patriotism is paying up.

But how exactly would this conversation take shape here? Maybe a royal commission on taxation would start the discussion. But, at least federally, the NDP leader has ruled out increasing taxes. And the frontrunner to lead the Liberal party has ruled out increasing the GST. That still leaves a little room to maneuver: a price on carbon could be part of a discussion about “paying up” and, one supposes, Mr. Trudeau could institute a small tax on the highest earners without breaking his word to focus on the middle class. And, one imagines, the New Democrats and Liberals could make the same proposals they made in 2011 to raise the corporate tax rate. But where other countries have large deficit and debt problems, the federal deficit is not talked about as a profound crisis here. Meanwhile, the spending cuts so far made by the Conservatives have not yet inspired a great deal of public consternation. And discussion about taxes probably has to start not with the question of why new revenue would be needed: what exactly makes raising revenue necessary and how that revenue would be used.

Q&A with Thomas Mulcair

By Aaron Wherry - Friday, December 14, 2012 at 2:38 PM - 0 Comments

I sat down with NDP leader Thomas Mulcair in the leader of the opposition’s office yesterday. Here is a transcript of our conversation, slightly abridged and edited.

How do you see the last year for you and the NDP? Do you feel you’re winning? Do you feel you’re getting somewhere?

We’re doing well. And the Abacus poll was confirmation of that … I dare say that we’ve been through a rough 18-month cycle. I mean, we started off in 2011 with a huge high, May 2. We realized then … It was interesting. I don’t think I’ve told too many people this story. I sat down with Jack shortly after, like two, three days after the election and when we became official opposition, he was asking me to become opposition House leader, it was a great feather in my cap. And then he said something to me that was quite interesting, he said, you know, this is a huge challenge. And I was just expecting him to be so effusive with the breakthrough and everything and he said, no, no, this is going to be a huge challenge. So then the huge challenge became all the bigger with his loss. And then we had to really work hard through a long, seven-month leadership  where we were missing a lot of our frontbenchers who were in the campaign and then we had to rebuild.

When I held the little press conference up in Toronto after the leadership, the next day, I used an expression that came to spontaneously, I said, we’re going to have a cascading transition under the sign of continuity. So I was so lucky, like somebody like [chief of staff to Jack Layton] Anne [McGrath] stayed with me long enough to hand off to [current chief of staff] Raoul [Gebert], overlapped with Raoul … So a couple of the other changes that took place were like that. We brought in a few people, the core team you still recognize when you see them around us. And so it’s been a huge challenge in terms of the structure and the organization, but some of the good points for me after becoming leader: in August I was doing my parish visit in Quebec, I would be in places like Vercheres—Les Patriotes, where Sana Hassainia is our MP, and be in a community hall on a Sunday morning with several hundred people who had all paid as part of a fundraiser, but she had municipal officials there, you know the mayors and the councillors, she had community groups, she had the schools and stuff like that. They’re getting settled in, they’re putting down roots. The same day I was at a corn roast for Helene LeBlanc and she had about 600 people and a lot of the cultural communities, so they’re setting down roots, they’re doing their fundraising, they’re getting well known in their communities, they’re in their local papers, so that part’s coming together.

Come this spring, we’re pivoting, right? We’re going to be entering the third year. And so the consolidation phase has to be finished. We’ve got to start the preparatory phase for the next campaign. Continue…

The royal commission on taxation you’ve been waiting for

By Aaron Wherry - Friday, December 14, 2012 at 12:56 PM - 0 Comments

The finance committee has released its report on its pre-budget consultations. Among the recommendations is a review of the tax system, including perhaps a royal commission.

That the federal government explore ways to simplify the Income Tax Act to reduce the complexity and inefficiency of its administration, including through the establishment of a royal commission to undertake a comprehensive review. Additionally, the government should ensure the timely assessment of income tax returns and explore the possibility of permitting consolidated reporting.

That the federal government undertake a comprehensive review of the tax system and ensure its fairness as well as neutrality by continuing to close tax loopholes that allow select taxpayers to avoid paying their fair share of tax.

Scott Clark and Peter DeVries have proposed tax reform in the past. Given the recent use of tax credits and the politics around the GST, a debate about the tax system could get interesting.

The Commons: In praise of the simple question

By Aaron Wherry - Monday, December 3, 2012 at 4:54 PM - 0 Comments

The Scene. Thomas Mulcair charged into the afternoon with a litany of concerns.

“Mr. Speaker, last quarter, Canadian economic growth slowed to a rate of just six-tenths of one per cent,” he reported. “Conservatives have now missed their own economic growth targets three quarters in a row. They have had to downgrade their economic growth forecast for 2012 by nearly a third and it is now widely expected that the Bank of Canada will have to downgrade its own economic forecast as well. The Minister of Finance announced new economic numbers just three weeks ago. Does the minister still stand by those numbers today, or will we have to downgrade his economic projections yet again?”

The Minister of Finance was not in the House, so John Baird stood to handle this one. But first, a nod to the expectant royal couple.

“Mr. Speaker, I would be remiss if I did not first stand up and extend our congratulations to the Duke and Duchess of Cambridge on the announcement coming from Burn’s House earlier today,” enthused the Minister of Foreign Affairs.

The Conservatives duly applauded.

At the far end of the room, Bob Rae leaned forward and put his head in his hands. Ralph Goodale patted him on the shoulder.

A mostly—particularly—dull and witless afternoon proceeded with little or no progress to report on much of anything. There was though at least one reasonable question. Continue…

Everything is a tax now

By Aaron Wherry - Tuesday, November 6, 2012 at 8:00 AM - 0 Comments

The idea of what constitutes a tax has expanded somewhat over the last few weeks to include measures that create government revenue and measures that raise costs. On that note, here is the statement the NDP’s Pat Martin presented yesterday before Question Period.

Mr. Speaker, a recent report shows the Conservatives collected over $8 billion in government user fees last year alone. In fact, since 2000, user fees have more than doubled, while corporate taxes have been cut in half, shifting the tax burden once again onto the back of the beleaguered Canadian taxpayer. They are not finished yet. Even though Canadians are still struggling from a devastating recession, the Conservatives are hitting them right in the pocketbook with a vast array of new taxes on everything under the sun. Passport fees have gone up, fees for nautical charts and maps, fees imposed on new Canadians, even fees for international youth exchanges. Add it all together and it amounts to a great big fat Conservative tax grab. Canadian taxpayers are sick of bankrolling the Conservatives’ obsequious tithing to their corporate puppet masters. Gouging Canadians for exorbitant service fees is no way to balance the budget.

The difference between a user fee and a tax is something John Baird asserted two years ago when he announced an increase in the air traveller security charge.

‘It is a tax because it will raise costs’

By Aaron Wherry - Tuesday, October 30, 2012 at 12:37 PM - 0 Comments

In protesting the NDP’s cap-and-trade proposal, Vic Toews adds to the definition of a tax.

They can call it whatever they want, but the NDP plan to make carbon a commodity will raise prices on consumer costs for Canadians. It is a tax because it will raise costs.

The Conservatives have already posited that “carbon pricing in any form is a carbon tax,” which would seem to cover the cap-and-trade and carbon-pricing policies they used to advocate for. But if anything that increases costs is also a tax, then seemingly even the Harper government’s current regulatory approach could be described as a tax.

The Commons: PM Harper explains why his 2008 platform was written in blue ink

By Aaron Wherry - Wednesday, September 26, 2012 at 5:27 PM - 0 Comments

The Scene. The day’s prize for Inventiveness in Partisanship goes to Joyce Bateman, the Conservative MP for Winnipeg-South Centre, who, in standing to ask the Foreign Affairs Minister about the appointment of a new ambassador to China, somehow managed to accuse the NDP of proposing a “job-killing carbon tax.”

Any backbencher, having been duly awarded one of the highest honours a group of voting-age citizens can bestow on another, can stand and publicly proclaim the party line. But only the truly exceptional can do so in reference to something completely unrelated. Bravo Madame. You have established an impressive standard that will be difficult to match. Not that we should underestimate your colleagues. Especially when they might have three years to match or exceed your accomplishment.

For sure, you should probably settle in because this joke is probably going to take at least that long to tell (or, put another way, it will probably be for at least that long that the Conservatives will continue telling it). Continue…

Idea alert

By Aaron Wherry - Tuesday, August 21, 2012 at 11:56 AM - 0 Comments

Mike Moffatt considers a pop tax.

Placing a general tax on junk food proves problematic, because one kid’s treat may be another child’s dinner (ask two people to define junk food, and you will likely get two different answers). But before you cry “nanny state,” consider this: soft drinks provide little to no nutrition, so it is easier to implement a specific tax on them than on all junk food. A tax on pop would more closely resemble the sin taxes on alcohol and tobacco. For instance, the federal government taxes beer at 31 cents a litre, and it could place a similar per-litre surcharge on soft drinks. A 2010 study in the American Journal of Public Health found that a 10 percent across-the-board increase in the price of sweetened soft drinks would lower consumption by 4 to 11 percent; therefore, even a modest tax could have a big impact.

The goal, however, is not to control pop sales but to reduce obesity. All else being equal, a 10 percent reduction in pop consumption would cut roughly 6,500 calories per year from the average American male’s diet, resulting in slower weight gain or a loss of nearly two pounds per year. This may seem insignificant, but taken over several years and across a large population segment, the weight loss adds up.

The trouble with tax-free savings accounts

By Aaron Wherry - Wednesday, August 1, 2012 at 2:51 PM - 0 Comments

Daniel Tencer reviews two new studies into the public policy implications of tax-free savings accounts, which were introduced by the Harper government in 2008.

While one in three British taxpayers now have a tax-free account, that drops to as low as one in 20 among low-income earners, the study found. “The introduction of ISAs has done little, if anything, to break down the barriers to saving faced by low-income individuals,” the study says. Not surprisingly, the main reason for not participating in the accounts was a lack of money to put in them…

Meanwhile a study from UBC economics professor Kevin Milligan, also published at the CTF, estimates that the government could have a hard time raising revenue as TFSAs grow older and larger. Milligan notes that, because TFSAs accumulate over time, eventually Canadians will have a large portion — if not all — of their assets sheltered from taxation altogether.

The current issue of the Canadian Tax Journal includes two other papers on TFSAs: one from Jonathan Rhys Kesselman on possible reforms and one from Finn Poschmann on reasons for expanding TFSAs.

Buried treasure

By Aaron Wherry - Thursday, July 26, 2012 at 1:21 PM - 0 Comments

The New York Times’ Adam Davidson used a Canadian company to setup an offshore bank account in Belize.

One often-overlooked lesson of the financial crisis is that shenanigans don’t happen in the absence of regulation; they happen when regulations are exceedingly complex and involve confusing, overlapping regulatory authorities. Collateralized debt obligations and credit-default swaps were designed to squeeze through a labyrinth of laws, rules and taxes. And most of these toxic assets were formed in offshore jurisdictions, far from prying eyes and stricter reporting requirements. When Lehman Brothers collapsed, it took regulators and creditors more than a year to find out that the company comprised nearly 3,000 legal entities spread across 50 countries.

My colleagues at NPR’s “Planet Money” recently polled several economists of all political stripes and found that while they disagreed on the right level of taxation, they generally agreed that the overly complex taxation of rich people and corporations was disastrous. It all but guarantees that those people and companies will spend an inordinate amount of money figuring out how to game the system rather than come up with new ideas that improve the economy. Economists generally agree that the best tax system would be simple and strict, offering little incentive to lobby for loopholes.

The Finance Minister pursued the issue several years ago, Paul Dewar campaigned on it during the NDP leadership race and the NDP pushed the finance committee earlier this year to study tax havens. Last year, the CBC used an NDP campaign pledge to consider the problem.

In 2007, the Harper government launched its “Anti-Tax Haven Initiative,” designed to crack down on “aggressive international tax planning and tax evasion.” The CRA boasted that it audited 1,251 cases and assessed $1.026 billion in federal tax in 2009-10. Sounds impressive. But there’s a big difference between tax assessed and tax collected, and the CRA doesn’t tell us how much it actually collected from these audits.

Michelle Gallant, who teaches law at the University of Manitoba, doubts that the CRA collected very much. She points out that most delinquent taxpayers wind up negotiating a settlement with the taxman for considerably less than the amount assessed, and that the negotiations and the appeal process can drag on for years. So the NDP plan to collect a billion dollars next year, and $3.2 billion by year four looks like a bit of wishful accounting.

A recent international report estimated the existence of trillions of dollars in global funds stashed in offshore accounts.

The popularity of taxing the rich

By Aaron Wherry - Friday, April 20, 2012 at 2:06 PM - 0 Comments

Further to this post last week, a new poll in Ontario finds massive support for a proposal of the province’s NDP.

Ontarians overwhelmingly favour NDP Leader Andrea Horwath’s proposal to raise taxes on people who earn more than $500,000 a year, a new poll suggests. Horwath has put forward the wealth surtax as one of her party’s conditions for supporting Liberal Premier Dalton McGuinty’s budget, which will be voted on next Tuesday.

More than three-quarters of people surveyed — 78 per cent — like her idea with only 17 per cent opposed and 5 per cent unsure, according to the Forum Research poll. “It’s hugely popular. You never see that — that’s huge,” Forum president Lorne Bozinoff said Wednesday.

Ms. Horwath would tax those earning more than $500,000 at a provincial rate of 13.16% (up from 11.6%).

There are no such proposals presently on offer at the federal level. During the NDP leadership race, Brian Topp proposed a tax rate of 35% for those earning over $250,000 and Nathan Cullen suggested a rate in the “low 30s” for anyone earning over $300,000 per year. Thomas Mulcair questioned the wisdom of those proposals.

Three years ago, the Bloc Quebecois suggested taxing those earning more than $150,000 an additional 1%.

Taxes, equality and what we’re prepared to do

By Aaron Wherry - Tuesday, April 10, 2012 at 1:42 PM - 0 Comments

An Environics survey commissioned by the Broadbent institute finds concern about inequality and interest in increasing taxes.

We asked: “Would you personally be very, somewhat, not very or not at all willing to pay slightly higher taxes if that’s what it would take to protect our social programs like health care, pensions and access to post-secondary education?” Two-thirds (64%) of Canadians said yes. Almost one-quarter (23%) are “very willing” to pay more  taxes to save social programs; 41% are “somewhat willing” to pay slightly more tax … 

An overwhelming majority of Canadians (83%) are in favour of increasing income taxes on the wealthiest and those at high-income levels are just as supportive of this proposal. Canada used to have an inheritance tax but it was scrapped in the 1980s. Our research shows that most Canadians (69%) support the introduction of a new 35% inheritance tax on any estate valued above $5 million. Finally, the majority of Canadians want corporate Canada to play its part too. Almost three-quarters (73%) of Canadians support gradually increasing corporate tax rates back to 2008 levels—even a majority of Conservative voters support this measure.

You can quibble with what these numbers really indicate, but the findings roughly match what Innovative Research found on a couple of questions last month. Continue…

How we got here

By Aaron Wherry - Thursday, March 29, 2012 at 1:41 PM - 0 Comments

Mike McNair, a former advisor to Stephane Dion and Michael Ignatieff, blames Conservative tax policy for the current deficit.

The federal deficit, this year estimated at $26 billion, would already have been wiped out had the Harper Conservatives not taken more than $30 billion per year out of the federal tax base.

The Conservatives used budgets and fiscal updates from 2006-2008 to introduce sweeping personal and corporate tax changes. Federal revenue in 2014-15, the last full year of the Conservative mandate, is estimated to be $285 billion, which means that Conservative actions have reduced the tax base by over 10 per cent since they took office. While many of these tax reductions were small, targeted tax credits (such as the fitness and public-transit tax credits), significant revenue was lost through a handful of much more consequential measures.

Idea alert

By Aaron Wherry - Thursday, March 22, 2012 at 12:35 PM - 0 Comments

Doctors for Fair Taxation want their taxes to be raised.

People who earn between $100,000 and $170,000 would pay an extra one per cent on the income between those two figures and income between $170,000 and $640,000 would be subject to an extra two per cent levy. Income over $640,000 and less than $1.85 million would be hit with an additional three per cent and income over $1.85 million would be subject to an additional surtax of six per cent. The group estimates that the federal government would earn an extra $3.5 billion a year and Ontario would raise an extra $1.7 billion.

One of the organizers of the campaign, Dr. Michael Rachlis, says more than 50 doctors have signed the petition so far. A website hosting the petition will go live Thursday afternoon. ”Our group considers higher taxes a small price to pay for a more civilized Canada,” says Rachlis, a public health physician and associate professor at the University of Toronto. ”We’re becoming a more economically unequal society and we feel this is bad for our country’s health.”

Where did Jack Layton stand?

By Aaron Wherry - Tuesday, March 20, 2012 at 1:11 PM - 0 Comments

In addition to a lack of specific policy debates with which to frame the discussion, the debate over the future direction of the NDP is complicated by the most recent point of reference: Jack Layton. What kind of party was the NDP under his leadership? Did he move the party to the centre? Or did he merely “modernize” the party’s rhetoric? Was he a pragmatist who leaned to the political left or was he a dedicated leftist who maintained at all times a pragmatic approach to politics?

Here’s something Megan Leslie argued to me recently.

I’m ticked at all the media commentary about Jack moving us to the centre. He never did that. He was radical. He just had a common-sense, folksy way of communicating that brought people to us. I trusted him, absolutely, to do this, and to keep us true to our values, even if (in moments) I was uneasy with a position. And he did it.

I hope that the next leader can be both a dynamic communicator, *and* stay true to our social democratic values. That’s the sweet spot that the new leader has to straddle.

Was Jack Layton a radical? Depending on your definition of the word, you could certainly make the case, pointing to his work on women’s rights, gay rights, the environment, homelessness and urban affairs. He was an early advocate in the fight against AIDS, he founded the white ribbon campaign, he championed same-sex marriage, he rode a bicycle everywhere and he turned his home into a model of renewable energy.

But then consider NDP policy on the environment. Continue…

Idea alert

By Aaron Wherry - Friday, February 24, 2012 at 1:54 PM - 0 Comments

Jack Mintz, an economist whose expertise the Harper government values very, very, very, very, very, very, very, very, very, very much, has co-authored a report calling for the elimination of various GST exemptions.

By eliminating the set-asides such as medicines, books, financial services and especially food, governments could reap an additional $39 billion in revenue annually — about 60 per cent higher than current levels. That cash bonanza could be used to cut income taxes, fund social services, or both, or even to cut almost in half the 12-to 15 per cent Canadians pay in harmonized sales taxes in most provinces,

“In reality, Canada’s VAT (value-added tax) is riddled with exemptions, rebates and reduced ratings that seriously damage its effectiveness,” Smart writes in an update of a paper he delivered to a conference in Calgary last fall …  ”This paper makes the case for an ideal VAT. Taxing consumer commodities at a single rate reduces opportunities for tax evasion, keeps revenues steady and drastically simplifies compliances for businesses.”

‘We need to finish the job of making ourselves a viable progressive alternative’

By Aaron Wherry - Wednesday, February 22, 2012 at 9:30 AM - 0 Comments

Brian Topp talks to the Toronto Star and challenges Thomas Mulcair.

He does not accept my point about restoring government revenues. That’s a pretty fundamental issue. If you don’t do that, you can’t follow through on your commitments. His proposal, to the extent that I can understand it, to divert revenues from our environment plan to general government revenues is wrong.

I haven’t heard him speak clearly on this issue of equality. Canadians are increasingly aware that the Conservatives have broken the government and there is much they can’t do together as a result. If Mitt Romney had filed that tax return that he released about three or four weeks ago in Canada, he would have paid lower tax than in the United States. That cannot stand. You cannot do what we need to do together as a society when the Conservatives have broken the government like that. It’s not about increasing taxes on “people”; it’s about reallocating money that is currently being spent on tax giveaways to people who don’t need help, in order to transfer the money to funds to people who do.

Mr. Topp also answers Mr. Mulcair’s proposal that the party needs to “renew.”

Taxing the rich, only different

By Aaron Wherry - Monday, February 20, 2012 at 8:30 AM - 0 Comments

Nathan Cullen has quibbled with Brian Topp’s tax proposals, but Mr. Cullen’s plan is rather similar.

Mr. Topp proposes to tax those earning more than $250,000 at a rate of 35%. Mr. Cullen proposes to tax those earning more than $300,000 at a rate in the “low 30s.”

Mr. Topp proposes to raise the corporate tax rate to 22.12%. Mr. Cullen proposes to raise the corporate tax rate to 20%, except for oil and gas companies, which would be taxed at a rate of 25%.

Mr. Topp adds two measures which apparently aren’t in Mr. Cullen’s plan: taxing capital gains (with two caveats) as ordinary income and taxing income from cashing in stock options at the full rate.

Court: Dodging taxes isn’t ‘natural’

By Charlie Gillis - Monday, February 13, 2012 at 11:00 AM - 0 Comments

Henry David Thoreau would be proud. For five years, a Chilliwack, B.C., couple refused to pay taxes while operating a school where they urged adult students to do the same, teaching that taxation amounts to slavery. But Elaine Gould and Russell Porisky will be lucky to get off as lightly as the 19th-century American writer, who famously withheld his taxes and paid for his disobedience with a single night in jail.

Gould and Porisky may spend years behind bars for failing to pay tax on more than $1 million of income generated by their school, Paradigm Education Group, plus $66,113 in unremitted GST. Last week, a B.C. Supreme Court judge found the pair guilty of tax evasion, and Porisky guilty of counselling their students to commit fraud. They’ve not yet been sentenced, but for evasion alone, the Income Tax Act allows for sentences of up to 12 months per count.

In his Paradigm seminars, Porisky taught that people are two separate entities in law—the “natural” person and “legal” person. Only the legal person is required to pay taxes, he claimed, and since the income flows to the natural person, taxes are essentially optional. Kooky as the theory sounds, it has been circulating long enough among tax resisters that the Canada Revenue Agency issued a release last fall advising Canadians to ignore anyone espousing it. One of Porisky’s students, a dentist named Eva Sydel, tried the “natural person” defence in vain in 2007, and received 18 months in jail. The judge in Porisky’s case was no less dismissive. “It is a failed attempt at word magic,” said Justice Elliott Myers of the theory, “and has no validity.”