Taxes are Essential but Justin's Race To The Bottom is a Rip-Off for 99% of Canadians!

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NorthReport
Taxes are Essential but Justin's Race To The Bottom is a Rip-Off for 99% of Canadians!

Without taxes we would have no health care, no roads, no schools, no police, no parks, no libraries, and no public transportation, to mention a few of the benefits we receive for our taxes

So, what’s not to like about taxes?

Mr. Magoo Mr. Magoo's picture

Quote:
So, what’s not to like about taxes?

I think, for most people:

1.  the amount of them.

2.  what they're applied to, and what they're not.

3.  what they're spent on, and what they're not.

josh

"Taxes are the price we pay for a civilized society."  Oliver Wendell Holmes.

JKR

Taxes can also build stadiums and arenas for the NFL, MLB, NBA, NHL, pro-soccer, etc....

progressive17 progressive17's picture

I don't mind other people paying taxes. I do however object if I have to pay more taxes myself.

WWWTT

Mr. Magoo wrote:

Quote:
So, what’s not to like about taxes?

I think, for most people:

1.  the amount of them.

2.  what they're applied to, and what they're not.

3.  what they're spent on, and what they're not.

I'll ad to the list!!

4. Who pays taxes 

5.How much is paid and why you have to pay that amount and or how much can you pay or is reasonable

WWWTT

JKR wrote:

Taxes can also build stadiums and arenas for the NFL, MLB, NBA, NHL, pro-soccer, etc....

Taxes can also pay for military pet projects and subsidize go no where companies

Sean in Ottawa

JKR wrote:

Taxes can also build stadiums and arenas for the NFL, MLB, NBA, NHL, pro-soccer, etc....

The problem is not that these have investments but that these investments are not businesslike and being made at a loss. If taxpayers can build a building and have a lease that will show profit while attracting a team then there is nothign wrong with that. The problem is the team expects the public to donate that.

swansong

Unfortunately the OPs comment shows a fundamental lack of understanding of how currency creation affects public/infrastructure spending.

Up until 1976 when PET sold us out to private banksters Canada spent money into existence through our Central Bank. New money was created by spending for infrastructure, roads, schools, hospitals, fighting in 2 world wars, Korea and we never accrued the type/size of debt that we now carry.

After 1976 money began...and continues to be...borrowed into existence at compounding interest through private banks and the lion's share of the taxes you love now go to paying down the interest on our debt to private, for profit bankers.

We are debt slaves who pay taxes not to improve our social/infrastructure conditions but to line the pockets of the bankers who have been given a never ending line of welfare.

It's time to return currency creation to our publicly owned central bank for the good of all Canadians.

NorthReport

I still love taxes.

Why the economy sucks, in one chart

http://rabble.ca/blogs/bloggers/progressive-economics-forum/2014/11/why-...

NorthReport

I love taxes, but not shit like this, not a tax system that fucks over 99% of society.

The taxing life of Leo Kolber

 

Certainly the Bronfmans have long been known in business circles for dexterity in reducing their taxes -- all the way back to the 1940s when they established a complex web of trusts allowing control to pass tax-free from generation to generation, in apparent defiance of Canadian tax law. 

The Bronfmans were also reported to be the family behind a controversial 1991 tax gimmick under which $2 billion from a family trust was transferred out of the country without taxes being paid.

The auditor-general suggested the federal government may have shown favouritism in granting the family advance approval to use the gimmick, saving them a stunning $700 million in Canadian taxes.

Certainly, if the family was the Bronfmans, as widely reported, they had exceptional political connections through their longtime political fixer Leo Kolber.

Kolber, prominent in the news this week for his involvement with the Bronfmans in a tax haven trust, has long managed the Bronfman fortune -- a role that's allowed him to become wealthy and powerful himself by being (in his own words) 

"the Bronfmans' boy."

For decades, Kolber has also cultivated the family's close political ties to Pierre Trudeau, Jean Chrétien and Brian Mulroney, who was prime minister at the time of the 1991 tax gimmick approval.

In a 2010 interview for a book I was writing, Kolber described to me the close connections he (and the Bronfmans) had to Mulroney, after donating $100,000 to his 1983 leadership campaign.

Kolber also explained the key role he played in overcoming anti-Mulroney resistance within the Conservative party that threatened to block Mulroney's rise to power. Particularly fierce in that resistance was prominent Toronto lawyer Eddie Goodman.

Mulroney asked Kolber to use his influence to win over Goodman -- something Kolber was well positioned to do, since Goodman was the lawyer for the Bronfmans' Cadillac Fairview Corporation, over which Kolber presided.

At Mulroney's request, Kolber phoned Goodman and got him to agree to meet Mulroney. Kolber then flew Mulroney to 

Toronto on the company jet for lunch with Goodman in Kolber's private dining room at Cadillac Fairview. By the time Kolber joined them for coffee after lunch, Goodman had abandoned his resistance, paving the way for Mulroney to go on to win the Conservative leadership.

Favours like that are rarely forgotten by politicians, particularly someone like Mulroney, who famously said, "Ya dance with the one who brung ya."

Kolber also explained how his influence with Jean Chrétien later helped him reduce capital gains taxes -- a move that benefited wealthy Canadians, including the Bronfmans and himself.

By then a senator (appointed by Pierre Trudeau), Kolber was intent on reducing capital gains taxes but, he told me, this was not a priority for Chrétien -- indeed it was "the furthest thing from his mind."

At Kolber's request, Chrétien elevated him to chair the Senate banking committee, where he pushed for the capital gains tax cut. Before the 2000 budget, Kolber urged a meeting of the Liberal caucus to support his proposed tax cut. Kolber recalled that after he spoke, Chrétien advised the caucus to "listen to Leo on this."

At that same caucus meeting, Kolber recalled, Finance Minister Paul Martin expressed reservations, saying the public would see the tax cut as "a sop to the fat cats."

Still, the tax cut made it into the budget, which Kolber attributes to Chrétien. It certainly turned out to be a sop to the fat cats, since half of all capital gains are received by the top 1 per cent. From 2000 to 2010, the top 1 per cent was saved a massive $7.9 billion in taxes -- largely due to the diligent efforts of the Bronfmans' boy.

 

 

http://rabble.ca/columnists/2017/11/taxing-life-leo-kolber

NorthReport

THE TROUBLE WITH BILLIONAIRES:
How the Super-Rich Hijacked the World and How We Can Take It Back 
(published in the US under the title BILLIONAIRES' BALL:
Gluttony and Hubris in an Age of Epic Inequality)

The glittering lives of billionaires may seem like a harmless source of entertainment. But such concentrated economic power reverberates throughout society, threatening the quality of life and the very functioning of democracy. It's no accident that the United States claims the most billionaires – but suffers among the highest rates of infant mortality and crime, the shortest life expectancy, as well as the lowest rates of social mobility and electoral political participation in the developed world.

Our society tends to regard large fortunes as evidence of great talent or accomplishment. Yet the vast new wealth isn't due to an increase in talent or effort at the top, but rather to changing social attitudes legitimizing greed and government policy changes that favour the new elite. Authoritative and eye-opening, The Trouble With Billionaires will spark debate about the kind of society we want.

http://www.lindamcquaig.com/TheTroubleWithBillionaires/index.cfm

NorthReport
swansong

You really need to research currency creation and the law suit currently underway against the BoC to return currency creation to the people. If you had a better handle on the concept you'd realize how little taxes would matter/how they would be mostly unnecessary once we could create our own currency, interest free.

This notion that taxes fund our social programs is simply not as true as many would think. The overwhelming majority of our taxes goes to paying off interest on our ever ballooning national debt...to private, for profit bankers.

Borrowing money into existence at compounding interest has turned us all into debt slaves. That's how we've come to live in "debt-based economies". If there was no debt there would be no money under this system. Think about that.

First link I found about the BoC lawsuit. If you're not familiar with this landmark suit you really have to ask why media doesn't seem to care about a concept that, if expanded around the globe, would change the world.

http://www.collective-evolution.com/2015/02/05/canadians-sued-the-bank-o...

The initial federal court filing took place on December 12th, 2011 by  Canadian constitutional lawyer, Rocco Galati, on behalf of Canadians William Krehm, Ann Emmett, and COMER (Committee for Monetary and Economic Reform). The filing is intended to “restore the use of the Bank of Canada to its original purpose, by exercising its public statutory duty and responsibility. That purpose includes making interest free loans to the municipal/provincial/federal governments for “human capital” expenditures (education health, other social services) and / or infrastructure expenditures.”

Rev Pesky

I have a feeling this might be a mistake, but what the hell...

swansong, you do realize the every dollar created, regardless of how it's created, owes it's holder a debt of one dollar. The only way to have 'debt-free' money is to have money that can't buy anything. As soon as a dollar goes into the marketplace and finds something to trade itself for, it is asking someone to do some real work, to create some real value.

To put it another way, if the government can indeed just create lots of money, is there any limits to the amount they can create? If not, why not create several trillions of dollars, and hand it out. No one would have to work anymore. We could all go out and spend like drunken sailors.

Or perhaps there is a limiting factor. If so, what is it?

swansong

Rev Pesky wrote:

I have a feeling this might be a mistake, but what the hell...

swansong, you do realize the every dollar created, regardless of how it's created, owes it's holder a debt of one dollar. The only way to have 'debt-free' money is to have money that can't buy anything. As soon as a dollar goes into the marketplace and finds something to trade itself for, it is asking someone to do some real work, to create some real value.

To put it another way, if the government can indeed just create lots of money, is there any limits to the amount they can create? If not, why not create several trillions of dollars, and hand it out. No one would have to work anymore. We could all go out and spend like drunken sailors.

Or perhaps there is a limiting factor. If so, what is it?

I love when a response begins with a thinly veiled insult. Provides me with so much hope for a rational discussion. Regardless...I'll answer your question with a question. What stops banks from doing it?

If you had read my comments and knew your Canadian history you would know that the government increased the currency supply when necessary by spending it into existence through infrastructure projects. That means putting people to work constructing that infrastructure. They didn't just "hand it out".

You worry about inflation but aren't aware of the amount of loss of buying power of a dollar over the last 40 years?

By the way...your characterization that even interest free loans/currency creation come with debt is either very misleading, exceedingly ignorant or downright dishonest. A dollar bill is a place holder for value. That's not the same as "debt". The money created through borrowing has actual debt attached in the form of compounding interest. Hopefully you can recognize the difference.

At least if a gov did begin overspending you would have the opportunity to vote them out and replace them with someone more fiscally responsible. What options do you have with major banks that butcher the economy and raise inflation? I think we know the answer to that.

After all...you can't seriously be suggesting that having private enterprise create our currency at compounding interest...literally lending us that which is already ours...is a better option than actually following the law and creating currency interest free by the will of the Minister of Finance through the BoC...can you?

 

 

epaulo13 epaulo13's picture

swansong wrote:

Unfortunately the OPs comment shows a fundamental lack of understanding of how currency creation affects public/infrastructure spending.

Up until 1976 when PET sold us out to private banksters Canada spent money into existence through our Central Bank. New money was created by spending for infrastructure, roads, schools, hospitals, fighting in 2 world wars, Korea and we never accrued the type/size of debt that we now carry.

After 1976 money began...and continues to be...borrowed into existence at compounding interest through private banks and the lion's share of the taxes you love now go to paying down the interest on our debt to private, for profit bankers.

We are debt slaves who pay taxes not to improve our social/infrastructure conditions but to line the pockets of the bankers who have been given a never ending line of welfare.

It's time to return currency creation to our publicly owned central bank for the good of all Canadians.

Thumb Up icon

..no matter how many times a political party talks about raising taxes to ignore this is to be complicit.

NorthReport

Is there any point to what Mary Dawson does?

iPolitics Insights

The ethics commissioner talks a good game — but her punishments are a joke.

Rev Pesky

swansong said:

You worry about inflation but aren't aware of the amount of loss of buying power of a dollar over the last 40 years?

I wonder where you found the word 'inflation' in my post? I can't see it there, and I swear I didn't edit it out.

​So, the question is, if there is a limiting factor to how much money the government can create, what is it? If there is no limiting factor, why not just create several trillions of dollars and hand them out?

Mr. Magoo Mr. Magoo's picture

Quote:
After 1976 money began...and continues to be...borrowed into existence at compounding interest through private banks and the lion's share of the taxes you love now go to paying down the interest on our debt to private, for profit bankers.[/qoute]

Are you actually asserting that these banks can PRINT money the way the government can?  Or else how can the government borrow money from a bank that it doesn't actually have?  And for that matter, if all the banks have to do is say "here's a trillion imaginary dollars", what's keeping banks from just lending a quadrillion dollars and waiting for the repayment, with interest?

Wowzers.  How many schoolbooks and bandages and stop signs could we buy if they'd only lend us that quadrillion?

Pondering

Mr. Magoo wrote:

Quote:
After 1976 money began...and continues to be...borrowed into existence at compounding interest through private banks and the lion's share of the taxes you love now go to paying down the interest on our debt to private, for profit bankers.[/qoute]

Are you actually asserting that these banks can PRINT money the way the government can?  Or else how can the government borrow money from a bank that it doesn't actually have?  And for that matter, if all the banks have to do is say "here's a trillion imaginary dollars", what's keeping banks from just lending a quadrillion dollars and waiting for the repayment, with interest?

Wowzers.  How many schoolbooks and bandages and stop signs could we buy if they'd only lend us that quadrillion?

The monetary system doesn't have to actually print all money physically anymore only the amount that is needed to circulate physically. Banks don't have to print money to create it.

https://lop.parl.ca/Content/LOP/ResearchPublications/2015-51-e.html?cat=...

However, it is important to note that money is also created within the private banking system every time the banks extend a new loan, such as a home mortgage or a business loan. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower's bank account, thereby creating new money (see Appendix B). Most of the money in the economy is, in fact, created within the private banking system.

You may also want to familiarize yourself with this case:

http://www.comer.org/content/SupremeCourtDecision_4May17.htm

 

epaulo13 epaulo13's picture

..1931, i believe, was when the bank of canada was formed in response to the introduction of us fed reserve. via this bank canadian governments lent money to each other using pension plans etc. it financed world war 2 as well as the the onset of our medical plans are 2 examples. it wasn't just about printing money but having control of our finances and other sovereignty issues.

Rev Pesky

Pondering said:

The monetary system doesn't have to actually print all money physically anymore only the amount that is needed to circulate physically. Banks don't have to print money to create it.

Well, I think I understand that all the bank has to do is make an entry in a computer, so no actual paper is harmed to make this money.

At the same time, there is a limiting factor. That is, the amount of money any bank can 'create' is limited by their total assets. There are ratios between assets and liabilities they have to adhere to. 

Which, by the way, was what was behind the whole thing about credit derivatives. It was a way of turning liabilities into assets, which eventually caused the crash of '08. But that's another story.

Rev Pesky

epaulo13 said:

...via this bank canadian governments lent money to each other using pension plans etc. it financed world war 2 as well as the the onset of our medical plans are 2 examples.

The government of Canada financed WW2 by borrowing via war bonds. They still borrow from citizens by selling Canada Savings Bonds.

In a world of floating currencies, no country has complete control over their money. On the other hand, it's almost impossible to operate in the world economy without a floating dollar. I mean, you can peg your dollar whereever you like; others may not agree with you.

To put it another way, a country can have complete control over it's own currency if it chooses to conduct business only within it's own borders. As soon as you start cross-border trading, the person on the other end of your trade will have a say in what your money's worth.

Nowadays governments choose to control their money by manipulating interest rates. That too has it's limitations, but the government sets the interest rates, not the banks.

epaulo13 epaulo13's picture

In a world of floating currencies, no country has complete control over their money. On the other hand, it's almost impossible to operate in the world economy without a floating dollar. I mean, you can peg your dollar whereever you like; others may not agree with you.

..no one is talking about 100% control. the issue that was raised is taking back control via the bank of canda vs the privatization of debt that started to take place back in the '70's. 

progressive17 progressive17's picture

The BoC was first established in 1934 and then reincorporated in 1938. All of its shares are held by the Finance Minister in right of the crown. It regulates the money supply and has a mandate to control inflation. Before that, Canadian banknotes were issued by the Bank of Montreal.

1934 indicates that the Bank of Canada Act was passed as part of a response to the Great Depression.

Pogo Pogo's picture

Swan Song reminds me of a story I first heard on Basic Black about Alves dos Reis.  He came up with a scheme to get legitimate currency printers to provide him with legitimate Portugeuse bank notes.  Things flew under the radar for a long time.  The world around him thrived.  According to Wikopedia he printed 200,000 x 500 Escudos banknotes, doubling the number in circulation.  As he laundered these notes, the Portuguese economy boomed.  Unfortunately when the fraud was discovered the economy tanked.  The government had to take all the 500 Escudos notes out of circulation.

The lesson is that though you can manipulate money supply to help the economy, you cannot make something out of nothing.

 

Mr. Magoo Mr. Magoo's picture

Quote:
According to Wikopedia he printed 200,000 x 500 Escudos banknotes, doubling the number in circulation.  As he laundered these notes, the Portuguese economy boomed.  Unfortunately when the fraud was discovered the economy tanked.  The government had to take all the 500 Escudos notes out of circulation.

I do have to wonder whether, had he not been found out, whether this uptick in the economy would have been sustained.

Typically, a flood of new banknotes into an economy results in inflation.  Basically, if there's twice as many banknotes in circulation, but the same amount of "stuff" to be bought with it then the stuff will eventually double in price.

Sorry if that's a spoiler to Rev Pesky's question in #19, but I doubt swansong was planning to answer it anyway.

Pogo Pogo's picture

Well it is a bit of a thinker, in that the rest of the world was exchanging money on the assumption that there wasn't a bunch of fake money in the system.  In that case where the country essentially has a 25% (just a guess) jump in paper floating around the cost of everything internal would go up, but imports would stay the same.  I will only paint your house if you pay me double, but the paint is the same price.

Rev Pesky

Mr. Magoo said:

Sorry if that's a spoiler to Rev Pesky's question in #19, but I doubt swansong was planning to answer it anyway.

Which is why I said in the beginning I wasn't sure whether I wanted to get into it. I used to have a friend, who was a very nice person, lefty, active and so forth, but for some reason he got into this free money thing. We had many long discussions about it, and that was the question I always asked him. That is, if there is a limiting factor to this free money, what is it? He would do his best to avoid answering.

​One of the parts of the free money brigade argument is that they always tie this money to societal infrastructure spending. It's always hospitals, schools, daycare centers, etc. I suppose they do so because most people are more or less in favour of that sort of spending. The fall back argument when they run into rough seas is always, 'Don't you want more schools, hospitals, etc.' How could one say no to that.

​What never occurs to them is that once that dollar is in the economy, it goes where ever someone wants it to go. The construction worker who gets paid for building the school takes his money and goes on vacation to the Bahamas. The government who issued the currency now owes the Bahamas that amount of goods or services or other currency. There's no way around that unless you lock that money inside the country.

Pogo Pogo's picture

Not very familiar with the details so maybe someone can help me out.  Didn't Bible Bill Aberhartd and the Alberta Social Credit Party campaign on precisely this.  And then when they got in just gave up on it for the silliness it is.

This is not to say that there is not incremental advantages in managing the monetary program to the best interest of citizens.  It is more about making the system efficient rather than creating value out of nothing.

Rev Pesky

Bible Bill actually managed to hand out a bit of money with some Alberta certificates which could be used at local businesses, but it never progressed beyond a very limited stage.

Just a note on the value of money in re: the Portugal currency scam. Most economies have a level of slack in them, so at least temporarily, and increase in the money supply will show a benefit. But something else happens as well. The value of the currency drops. That is true of any 'free money' scheme. It's a bit like Crazy Coyote when he runs off the edge of the cliff. It takes a while before he realizes he's not standing on anything.

A country can also raise, or lower, the value of their currency by raising or lowering the interest rate. In fact, nowadays one of the prime methods of currency manipulation is via the interest rate. 

JKR

Rev Pesky wrote:

We had many long discussions about it, and that was the question I always asked him. That is, if there is a limiting factor to this free money, what is it? He would do his best to avoid answering.

I think it's obvious what the limiting factor is - inflation.

cco

It's also important to distinguish between price inflation and wage inflation. The former tends to outstrip the latter, because in today's Canadian society, high wages aren't the primary driver of price increases. Interest rates have been low for a while, yet Canada hasn't seen the skyrocketing inflation that most economists predict, because if (for example) you live in Toronto and your mortgage is 60% of your income, you don't have a lot left over to go spend on a new BlackBerry.

If, in a print-free-money situation, wages and prices inflate at approximately the same rate, what's the effect on the economy? It hurts the wealthy, who park their funds in stocks and property. It drives down the value of the Canadian dollar, making imports more expensive (so Canadians are more likely to buy Canadian-produced products) and exports cheaper (so Americans are also more likely to buy Canadian products). It helps those in (CAD-denominated) debt, both individuals and governments, by reducing the value of that debt. It makes Canadians less likely to save and more likely to spend, which heats up the economy. A certain level of inflation is not, in and of itself, a catastrophe to be avoided at all costs.

It can, of course, be overdone (Zimbabwe, Hungary, and Venezuela come to mind), but that doesn't mean it's an illegitimate tool. And to bring it back around to the subject of this thread, if you're a government looking for political symbolism, and the people who were making $30,000 five years ago are now making $100,000 due purely to inflation, you can redefine the brackets to meet inflation and "keep cutting taxes on the middle class".

progressive17 progressive17's picture

It is much more difficult for a worker to make $800 or $1000 a week than it was 30 years ago. Money is trickling up and out to tax havens, leaving the rest of us to fight over what is left over. This keeps prices and wages low, as we are all competing for a reducing supply of dollars.

It is no coincidence that the amount the rich have stashed in tax havens equals the federal national debt. 

The dollars which are supposed to change hands between us are being vacuumed out of the economy by a neoliberal system which taxes the upper echelons insufficiently. 

Mr. Magoo Mr. Magoo's picture

Quote:
This keeps prices and wages low, as we are all competing for a reducing supply of dollars.

Is it your experience that the price of things has been decreasing?

I'm just curious... which things??

NorthReport

Canadian tax hypocrisy that favours the rich must end: Broadbent

Tax avoidance and evasion by the rich ultimately undermines democracy: it starves social programs and public services, increases after tax income and wealth inequality, and further concentrates economic resources in the hands of a few.

The Senate Committee on National Finance hears from Finance Minister Bill Morneau during a meeting on Parliament Hill in Ottawa on Nov. 1. "The Liberals have dismally failed to move on the biggest tax loopholes for the top 1 per cent that allow investment income to be taxed at a much lower rate than wages," writes Ed Broadbent. "The vast majority of taxable investment income is held by the very affluent."

https://www.thestar.com/opinion/commentary/2017/11/13/canadian-tax-hypoc...

Rev Pesky

Broadbent, in his article makes it clear he is talking about the top 1% of income earners.

He should be talking about the top 1% of wealth owners. 

Mr. Magoo Mr. Magoo's picture

He also seems to conflate "tax avoidance" (an attempt to pay as little in taxes as possible, within the dictates of law) and tax evasion (misreporting income, fraudulent claims, simple refusal to pay taxes at all).

If you have your taxes prepared (or if you prepare them yourself, and claim all legitimate deductions and exemptions in order to minimize the final amount you owe) then you're also guilty of tax avoidance.

Rev Pesky

Yeah, it's not criminal to do what the law allows you to do. There should be a debate about what the law allows, with the idea of perhaps changing it so it doesn't allow so much, but that's different than implying that those who use the existing laws are somehow criminal.

cco

Mr. Magoo wrote:

He also seems to conflate "tax avoidance" (an attempt to pay as little in taxes as possible, within the dictates of law) and tax evasion (misreporting income, fraudulent claims, simple refusal to pay taxes at all).

If you have your taxes prepared (or if you prepare them yourself, and claim all legitimate deductions and exemptions in order to minimize the final amount you owe) then you're also guilty of tax avoidance.

You can call it hair-splitting if you like, but I'd venture to say that my (now-abolished) public transit refund claim is different than someone registering their private jet as property of a numbered corporation in the Cayman Islands, which itself is property of a numbered corporation in the Isle of Man, which is property of a numbered corporation in LIechtenstein, which is jointly owned between Kremlin Enterprises Cyprus and Monsanto Holdings Luxembourg. I agree that the law should be changed, but outside of a university debate club, I don't agree that there's no difference between offshore money laundering and claiming a deduction or two.

Mr. Magoo Mr. Magoo's picture

Quote:
I agree that the law should be changed, but outside of a university debate club, I don't agree that there's no difference between offshore money laundering and claiming a deduction or two.

Isn't "money laundering" basically a criminal term?  Which is kind of my point.  If that fellow with his private jet is breaking the law then have at him.

I'm only suggesting that there's a difference between not paying taxes by breaking the law, and not paying (as much in) taxes while obeying the law.  I would hope we could be mindful of that distinction, is all.

Pogo Pogo's picture

Well it is a bit of a slippery slope.  Operating within the system, to gaming the system, to cheating the system.  Of course gaming the system has the corollary of unduly influencing the structure of the system.

Sean in Ottawa

I read the article -- I think the same one. I don't see the point of some of the comments here.

Broadbent mentions both wealth and income. I do not see the issue.

He mentions avoidance and evasion. There is no indication that he does not see the difference or that he accuses those who participate in avoidance as being criminal.

He does say that this "undermines democracy: it starves social programs and public services, increases after tax income and wealth inequality, and further concentrates economic resources in the hands of a few." This is not becuase it is illegal and he includes both legal means and illegal means as contributing. Nowhere does he say that the issue is either all enforcement or all changing tax law.

The comparison of individual claims for transit fare credits are spurious -- you need to read context. He starts with: "tax system that continues to allow the top 1 per cent to avoid paying anything like their fair share."

He is not claiming that credits used by other than the rich are  a problem nor is he claiming that all credits used by the rich are a problem. He is say avoidance (credits) that are used by the rich are. (Like saying people do something does not mean ALL people but that this is something that people do.)

He does refer to offshore cheats -- and that they are. It is not legal to stash money overseas and not report it.

He does speak to tax loopholes and does not "conflate" them. Rather he says they are part of the same problem: the result of both leads to unfairness and inequity, starving programs. He is right. And they should be seen in the aggregate -- seeing them that way is not a confusion.

I do not understand your criticisms as they seem quite unfair given that this is a short piece that simply lays out the problem of these two issues moving together. It is important to see them in the same light since wealthy people already have loopholes designed for them -- and then on top of that extra nice treatment (policies created for and by wealthy people) many of them then cheat the system that is already titled in their favour.

It is important to see this especially in the light of the tax policy of the Liberal we-want-to-help-the-rich-while-talking-about-the-middle Party.

Broadbent's point is very simple that the combination of legal loopholes AND tax cheating abetted by a government that shows no interest in reignin that in, is screwing everyone else. These are two sides of the same coin becuase the policies are created by government and are political. And the tolerance of the illegal cheating is also a policy that is political. Broadbent correctly points out that all countries do not turn the same relatively blind eye Canada does. To make matters worse, while avoiding the significant cheaters, the CRA has a history of investing greatly in finding the smaller cheats and errors through increased audits on more ordinary and less elite Canadians.

Personally, my criticism of Broadbent's articel would be that he could have gone further in terms of the data and evidence as well as the resulting statistics. That is different from attacking what points he does make effectively here.

Rev Pesky

From the Broadbent article, as posted by Sean in Ottawa:

He starts with: "tax system that continues to allow the top 1 per cent to avoid paying anything like their fair share."

This is what I'm talking about. Which '1%' does he mean? The top income earners, or top wealth holders? They are two different groups.

Sean in Ottawa

Rev Pesky wrote:

From the Broadbent article, as posted by Sean in Ottawa:

He starts with: "tax system that continues to allow the top 1 per cent to avoid paying anything like their fair share."

This is what I'm talking about. Which '1%' does he mean? The top income earners, or top wealth holders? They are two different groups.

The top one percent is not used politically or culturaaly in a limited way. There is no magical dividing line. It has come to mean the most advantaged economically. It has been used for both income and wealth. And the concept of the 1% is that the top 1% in income have the majority of income and the top 1% in wealth have the majority of wealth. It is true that the of the 1% in each overlap. It is also true, particularly in Broadbent's context that the definitions of each are impossible to see. Income is not accounted for due to loopholes and wealth is not accounted for due to offshore hidden accounts. There is no need to define specifically each because they cannot be -- and that is government policy.

Broadbent did not need to define it specifically as he was talking about both.

And it is not uncommon that people rank by either one -- or both as this article does:

https://www.investopedia.com/articles/personal-finance/050615/are-you-to...

I chose that article to not that the 1% Broadbent was speaking about is a term used in many contexts. I the above case it is global but we use the term in a Canadian context and we hear of it in global and US contexts.

When we hear of the 1% we are not talking of math. We are talking about the very most well off in whatever context by income, by wealth and by geography. In all cases Broadbent's use of the term is understandable, acceptable , supportive of his argument, and definitely common language. It does not suggest that he does not understand how the term is used in context or that participants vary depending on the definition.

Mr. Magoo Mr. Magoo's picture

Quote:
He mentions avoidance and evasion. There is no indication that he does not see the difference or that he accuses those who participate in avoidance as being criminal.

Yes, in the same sentence.  The conflation comes in when he ascribes the same blame to a rich man who misreports income (a crime) and the rich man who pays as little in taxes as tax law demands (not a crime).

If you're driving on the highway, and the posted speed limit is 100kph, and you're driving 100kph, you're not legally guilty of anything, but you're not morally guilty of anything either.

It makes no sense to blame automobile accidents on you, it makes no sense to say "well, he doesn't have to drive as fast as possible", and it makes no sense to say "well, he must think he's more important than that fellow he just passed".

If you think that 100kph is too fast to be safe, if you think that driving 100kph is the real cause of accidents, then by all means work to change the law (hopefully without pleading that "but it's DRIVERS who make these laws!) but until the law changes I see no logical reason to assign personal blame (and shame) to someone obeying it.

cco

The highway code doesn't say "100kph, except for Bugattis registered in Monaco, which have no limit". If it did, and if those cars became enormously popular among those who could afford to buy their way into that exception, and if a majority of crashes were caused by those exempt cars, a fair comparison could be made. As it is, the most common American tool of speed limit evasion, radar detectors, are already illegal in most provinces.

Sean in Ottawa

Mr. Magoo wrote:

Quote:
He mentions avoidance and evasion. There is no indication that he does not see the difference or that he accuses those who participate in avoidance as being criminal.

Yes, in the same sentence.  The conflation comes in when he ascribes the same blame to a rich man who misreports income (a crime) and the rich man who pays as little in taxes as tax law demands (not a crime).

If you're driving on the highway, and the posted speed limit is 100kph, and you're driving 100kph, you're not legally guilty of anything, but you're not morally guilty of anything either.

It makes no sense to blame automobile accidents on you, it makes no sense to say "well, he doesn't have to drive as fast as possible", and it makes no sense to say "well, he must think he's more important than that fellow he just passed".

If you think that 100kph is too fast to be safe, if you think that driving 100kph is the real cause of accidents, then by all means work to change the law (hopefully without pleading that "but it's DRIVERS who make these laws!) but until the law changes I see no logical reason to assign personal blame (and shame) to someone obeying it.

Blame is your word. Blame of the taxpayer is your focus. Public policy and the actions of the government are Broadbent's.

He stated that there is a common effect -- the impoverishment of programs to the detriment of everyone else. This is caused by legal loopholes and illegal evasion -- both.

It is time to be blunt: at one point it does not make a difference which one it is for each dollar not available because of either. The money is gone. That is his point.

You have a thing about culpability here. The article makes a different more important point with respect to culpability -- and that is with respect to the government: it is wrong to allow and build loopholes that are unfair and it is wrong to fail to enforce the tax regime as it stands.You someonehow think it is wrong to recognize that out of fear of offending people who have these legal tax loopholes.

You are off on some tangent pretending that Broadbent said things he did not say. He did not blame the actions of a single person acting legally. He pointed to the effects of the losses (both through loopholes and lack of enforcement) and he blamed the government. As he should.

How is a policy discussion to deal with a taxpayer offended by knowledge that the benefit they are getting is coming at a cost to someone or something else? The blame is not about the actions of anyone other than the government. Your point is ridiculous and if upheld would put a chill on any effort to have more just policies becuase unjust policies are offered legally.

Now you show me where Broadbent speaks about blame to the behaviour of tax payers rather than the government in allowing the policies they benefit from. You show me where Broadbent says the legal loopholes are illegal.

Maybe you should stop typing and read the article again. Consider the content and purpose/ Argue with it as you want -- there is value in the discussion you seem to want supressed to avoid offending some unnamed person who is benefitting from credits that the government of Canada, which admits its programs cannot be fully funded and is running deficits, apparently cannot afford.

As for your metaphor -- since he did not lay blame, but only stated the effects, it would be like not being able to say speeding kills becuase it might offend speeders speeding legally due to high limits. Of course that would mean that we should do nothing about that policy in order not to offend anyone.

Mr. Magoo Mr. Magoo's picture

Quote:
it is wrong to allow and build loopholes that are unfair and it is wrong to fail to enforce the tax regime as it stands.You someonehow think it is wrong to recognize that out of fear of offending people who have these legal tax loopholes.

I don't think it's wrong at all.  Let's change those laws.

But until we do, I'm not that interested in hearing about how someone who is obeying those laws "isn't paying his fair share" or is "cheating" or whatever.

If the problem is the laws, there should be no problem leaving individuals who are obeying the existing laws out of it.

Quote:
it would be like not being able to say speeding kills becuase it might offend speeders speeding legally due to high limits.

We generally use the term "speeding" to refer to people driving OVER the speed limit.  If that's true then there's no such thing as "speeding legally", anymore than "embezzling legally" or whatever.  That's actually kind of my point.  If you're driving the legal speed limit you're not "speeding".

Sean in Ottawa

Mr. Magoo wrote:

Quote:
it is wrong to allow and build loopholes that are unfair and it is wrong to fail to enforce the tax regime as it stands.You someonehow think it is wrong to recognize that out of fear of offending people who have these legal tax loopholes.

I don't think it's wrong at all.  Let's change those laws.

But until we do, I'm not that interested in hearing about how someone who is obeying those laws "isn't paying his fair share" or is "cheating" or whatever.

If the problem is the laws, there should be no problem leaving individuals who are obeying the existing laws out of it.

Quote:
it would be like not being able to say speeding kills becuase it might offend speeders speeding legally due to high limits.

We generally use the term "speeding" to refer to people driving OVER the speed limit.  If that's true then there's no such thing as "speeding legally", anymore than "embezzling legally" or whatever.  That's actually kind of my point.  If you're driving the legal speed limit you're not "speeding".

1) If someone is not paying their fair share that is a fact. It is an effect -- difference betwen fair share and wha tthey are paying. Period.

2) You show me EXACTLY where Broadbent says people using loopholes legally are cheating. He doesn't.

when it comes to speeding - I am not sure if you evaded the point or avoided it. The issue is if speed kills and the speed people are going at is legal  you should get to call it -- even if it might make people uncomfortable. That is a fair analogy to what Broadbent is doing. You are falsely accusing him of blaming people when he is only pointing out the effects of the policies. He is blaming the government both for those policies and for not cracking down on those evading taxes.

Let's really look at the dead horse you are flogging: Broadbent speaks about evasion and avoidance. I highlighted a single quote:

 

"Tax avoidance and evasion by the rich ultimately undermines democracy: it starves social programs and public services, increases after tax income and wealth inequality, and further concentrates economic resources in the hands of a few. The overall message to a majority of Canadians is that the rules of the economic game are rigged against them."

Do you know why this quote is important?

This is the only paragraph in the entire article where he addresses both evasion and avoidance in the same paragraph. In this he speaks about effects -- not a word about behaviour. After that he not only does not conflate them but keeps them apart through the rest of his article having linked their effects here.

You simply have no point to work with here, despite repeating these specious allegations, and I have no idea why you are slamming Broadbent for calling out policies that are adding to the injustice in both wealth and income in this country.

The rich are not paying their fair share. I am sorry if this comes across as blame and somehow offends you. It needs to be said. They are not paying their fair share through both legal and illegal means. Sorry again. The government is responsible for both failing to uphold the system and for keeping it unfair. Too damn bad you don't like hearing that. It is true.

And that is ALL Broadbent said when it comes to blame.

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