TD, the bank of extravagant service fees, has a CEO that is very fond of Tax increases. Apparently he is also very fond of making donations to the Liberal Party of Canada. After making such dastardly Liberal comments professing his unholy love with taxes, he was lambasted by the Tories in a press release. This has prompted a hurt Iggy Puff to rush in to defend his poor old bank exec. I'm not going to comment on the suitability of a sitting Prime Minister to criticize a CEO staking such a political stand, but I will say this: raising taxes has to among the dumbest ideas I can think of right now.
Remember the recession anyone?
Canada, and most of Western Civilization has just started to creep out of the death claws of the infamous greatest downturn "since the great depression." In the middle of all this we want to hit consumers with more of a tax burden?
This is a recipe for a disaster. Just as consumer confidence is rebounding the prevailing mood among bankers is "hey let's increase taxes?" Apparently this tactic seems to work in the magical fairy fairy land of banking executives, but out in real life if you take money away from people they will tend not to spend as much. If people aren't spending, businesses won't be hiring.
That recipe isn't exactly an agenda for a growing economy - it is a recipe for a real downturn GREATER than the Great Depression.
Throw Competitiveness out the door.
I just don't understand how in the hell anyone with as much economic education as the head of a major Canadian bank would suggest in a country like Canada that taxes be raised. Canada's competitiveness has long been hindered by a tax regime that effectively encourages the brightest and best to go elsewhere.
Whether it's doctors, engineers, or anyone that wants to succeed it's become increasingly difficult to do so here in the Great White North. Lower not higher taxes is what we need.
What ever happened to reducing spending?
The most amazing part of this whole debate is the complete negation of any alternatives over raising taxes to deal with the deficit. The federal government has well over doubled in size since the 1960's when adjusted for inflation and population growth. We have a national government that is increasingly getting more and more involved in our daily lives in areas it doesn't need to be.
Why not suggest that the federal government stop spending like a drunken sailor? What about not spending money on every infrastructure project under the sun as part an insane stimulus package? Why not do what every other Canadian out there has had to do in this recession - cut back?
Raising taxes would be just about as insane a suggestion right now as would be raising interest rates. The last thing the economy needs is a bad decision to be made right now. And what's worse, raising taxes has not shown to be an effective strategy to eliminate deficits. Let's not forget that the Tories introduced the GST to eliminate the deficit that existed years ago. It took a Liberal government cutting spending that actually brought the government into the black.
Concurrance, all that a tax increase would do is institutionalize the government spending, turning it from temporary to a structural deficit. Liberals seem to want the spending to continue, while the government wants to ease back and let the private sector get back in the game.
ReplyDeleteGuess the TD has a problem competing in the private sector, of course now with this new love of government intervention, they can do without my savings as well.
We need to explain this as widely as possible; a true plan to revive the economy
ReplyDeleteStockwell Day is now Canada's Treasury Minister, and will have to make cuts to government spending amounting to about 8% to reduce spending by $19 billion over the next five years. To make this palatable to voters and the opposition parties, transfer payments are to be considered "untouchable". There is a lot of fat in terms of programs which are either not delivering what is promised, have outlived their usefulness or are mismanaged and can be reorganized to run more efficiently. Consider that large corporations like Canadian Tire or Wal-Mart typically only have five layers of management, while government departments have convoluted structures with multiple layers of management (reputedly as many as 30, but I'll leave that as anecdotal until I see proof)
I think the emphasis on protecting transfers is wrong headed, but that is because I don't see the idea of the State seizing wealth and property from the productive to give to political rent seekers and the non productive as being a proper role for the State.
However, given political reality, cutting transfers to individuals would be electoral suicide, so about $61 billion is untouchable.
We can still look at other areas like transfers to governments (especially governments with their own sources of revenue like offshore oil or hydro), which gives us another $46 billion to work with.
Subsidies should be cut for another @ $30 billion
Crown corporations should be cut as well, since that provides another $8 billion
Adding that up, we can get $84 billion in cuts. Sustained for six years this would allow the entire national debt to be paid off, and if the program is sustained for 12 years then all unfunded liabilities (CPP, pensions, etc.) are also covered.
Not included in this virtuous circle is the possibility of reductions in operating expenses due to the ending of so many programs, and of course the reduction of the $30 billion/year in debt payments. Real tax cuts can be made from the savings here, energizing the economy and in all likelyhood speeding up the entire process through increased tax revenues.
Here is a real program to get behind: don't leave the debt to our grandchildren but pay it off before our children leave school!
Here's another link for you, courtesy of Elections Canada:
ReplyDeletePolitical contributions by the six largest Canadian banks 1982 to 2003
It looks like the TD used donations as a carrot and stick:
................Libs.... PC's
1996 ...........$0....$33,082
1997 ...........$0....$78,014
1998 ......$38,608....$36,160
1999 ......$43,269....$29,155
What was Chretien doing wrong in 1996 and 1997, in TD's eyes ???