Co-written by Natalie Lochwin, this piece regarding tax-payer funded Christian political hate groups appeared on Rabble:
http://rabble.ca/blogs/bloggers/michael-laxer/2012/05/bullies-you-are-paying-how-christian-right-making-you-subsidize
Wednesday, May 16, 2012
Tuesday, May 8, 2012
Tuesday, May 1, 2012
Scenes from the class struggle in Canada.
We have all heard the story of how the Canadian banks weathered the storm of the post-2008 recession as a kind of Rock of Gibraltar, proving the soundness of Canada's financial sector and fiscal model. It has been pointed to, again-and-again, by the mindless financial pundits that the media trot out to tell us that the sky is not falling and the system works just fine.
In fact, when Occupy Toronto began, there was no end to the preening of the imbecilic peacocks of the business commentary community (a truly sad crowd, they are not actually rich...they just make a living kissing the asses of the rich) spouting off with a bunch of nonsense about how, to loosely paraphrase, "the people in New York may have a point but our banking sector is just fine. It is not like the USA".
In between moments of pontificating on the perils of doing anything other than what the Conservative government of Canada has done, our Finance Minister, Jim Flaherty, told the world in no uncertain terms, that "In Canada, we did not suffer a single bank or federally regulated insurance company bailout or failure. Our country’s financial institutions stood solid and steadfast, based on sound risk management and supported by a very effective regulatory and supervisory framework."
Well, it turns out Jim may have been being more than a little disingenuous.
It seems that, in fact, Canada's big banks were dipping deeply into the proverbial gravy train that populist rich kids like Toronto's pseudo-mayor like to ramble on about. To the tune of $114 billion.
Now the not unexpectedly hyper-defensive drones of the financial pages have tried to claim that this was not a bailout at all. But clearly, unless one is to succumb to near Orwellian logic, it was. The Canadian government, through the CHMC program alone, removed over $69 billion in mortgages from the balance sheets of the big banks. They did this to prevent their potential insolvency.
Anytime the federal government wants to take over my risky investments, I will have no problem, to keep the myth alive, saying that it was not a bailout...it was actually, wink-wink, a "program" to aid my liquidity.
As it turns out, "Canadian lenders also dipped into a program set up by the U.S. Federal Reserve aimed at providing cash to keep American banks afloat. CIBC and BMO took almost $3 billion each out of the fund, RBC and TD took out $8 billion and Scotiabank drew down almost $12 billion".
Unlike in the US, however, the Bank of Canada apparently treats its numbers as being, not surprisingly, a state secret. It does seem that, in spite of this secrecy, we now know the government handed out at least $41 billion to Canada's banks under a similar "shadow" program.
The end result of all this is that, by whatever terminology you wish to use, the government of Canada aided the banks to the extent of around $3,400 a year per man, woman and child in the country and to the equivalent of 7% of our country's GDP.
This means, in real terms, that they took this money from you, as citizens, and redirected it to our banks.
Now, as we head into the austerity insanity that has begun to ruin the economies of the UK and Spain, this is worth remembering, even on capitalist terms.
But, it is also worth remembering that this reverse Robin Hood transfer of wealth is a form of pure class warfare. $114 billion for the banks meant, directly, $114 billion less for the poor, social programs, infrastructure, job creation, etc.
Especially due to the speculative nature of the bailout, the stimulus is not akin to the far less that Canada gave out to the auto industry. It is not only far less likely to actually provide real economic stimulus, it is also more likely to put us into a loan driven personal debt crisis like the US faced.
Beyond the numbers, we get to the basic moral implications of this.
We know that, for example, by all accounts between 600,000 and 1 million children live in poverty in Canada. And this is in spite of the cruel joke that in 1989 Canada's parliament unanimously promised to eliminate child poverty by the year 2000. I have little doubt that $3,400 a year to each of their parents would have a dramatic impact on their quality of life. And it would cost the government between $2 billion and $3.4 billion a year.
In other words, it would cost $110 billion less than the bank bailouts, direct or indirect, did. The money to at least start to really fight child poverty is clearly there, even if no one wants to touch it.
Genuine job creation, health and anti-poverty programs would cost a fraction of the $110 billion left over total.
All of the job and service cuts that the Tories are proposing would be covered.
There would be no deficit.
What is abundantly clear is that our political leaders, and remember that this occurred primarily in a minority parliament when there was far greater oversight of the actions of the Harper Tories, have decided that while we clearly have the means and the social wealth to end poverty in Canada, the far greater priority is to subsidize the liquidity of the bloated profits of our, as it turns out, incompetent and not solid financial sector.
As to the question of which side these politicians are on, they have made this quite clear, and the public is fed this not as an assault by the wealthy and the corporations on society, but as a reasonable and responsible course of action.
There is a little that is worse than a class war that few are even willing to acknowledge is going on.
In fact, when Occupy Toronto began, there was no end to the preening of the imbecilic peacocks of the business commentary community (a truly sad crowd, they are not actually rich...they just make a living kissing the asses of the rich) spouting off with a bunch of nonsense about how, to loosely paraphrase, "the people in New York may have a point but our banking sector is just fine. It is not like the USA".
In between moments of pontificating on the perils of doing anything other than what the Conservative government of Canada has done, our Finance Minister, Jim Flaherty, told the world in no uncertain terms, that "In Canada, we did not suffer a single bank or federally regulated insurance company bailout or failure. Our country’s financial institutions stood solid and steadfast, based on sound risk management and supported by a very effective regulatory and supervisory framework."
Well, it turns out Jim may have been being more than a little disingenuous.
It seems that, in fact, Canada's big banks were dipping deeply into the proverbial gravy train that populist rich kids like Toronto's pseudo-mayor like to ramble on about. To the tune of $114 billion.
Now the not unexpectedly hyper-defensive drones of the financial pages have tried to claim that this was not a bailout at all. But clearly, unless one is to succumb to near Orwellian logic, it was. The Canadian government, through the CHMC program alone, removed over $69 billion in mortgages from the balance sheets of the big banks. They did this to prevent their potential insolvency.
Anytime the federal government wants to take over my risky investments, I will have no problem, to keep the myth alive, saying that it was not a bailout...it was actually, wink-wink, a "program" to aid my liquidity.
As it turns out, "Canadian lenders also dipped into a program set up by the U.S. Federal Reserve aimed at providing cash to keep American banks afloat. CIBC and BMO took almost $3 billion each out of the fund, RBC and TD took out $8 billion and Scotiabank drew down almost $12 billion".
Unlike in the US, however, the Bank of Canada apparently treats its numbers as being, not surprisingly, a state secret. It does seem that, in spite of this secrecy, we now know the government handed out at least $41 billion to Canada's banks under a similar "shadow" program.
The end result of all this is that, by whatever terminology you wish to use, the government of Canada aided the banks to the extent of around $3,400 a year per man, woman and child in the country and to the equivalent of 7% of our country's GDP.
This means, in real terms, that they took this money from you, as citizens, and redirected it to our banks.
Now, as we head into the austerity insanity that has begun to ruin the economies of the UK and Spain, this is worth remembering, even on capitalist terms.
But, it is also worth remembering that this reverse Robin Hood transfer of wealth is a form of pure class warfare. $114 billion for the banks meant, directly, $114 billion less for the poor, social programs, infrastructure, job creation, etc.
Especially due to the speculative nature of the bailout, the stimulus is not akin to the far less that Canada gave out to the auto industry. It is not only far less likely to actually provide real economic stimulus, it is also more likely to put us into a loan driven personal debt crisis like the US faced.
Beyond the numbers, we get to the basic moral implications of this.
We know that, for example, by all accounts between 600,000 and 1 million children live in poverty in Canada. And this is in spite of the cruel joke that in 1989 Canada's parliament unanimously promised to eliminate child poverty by the year 2000. I have little doubt that $3,400 a year to each of their parents would have a dramatic impact on their quality of life. And it would cost the government between $2 billion and $3.4 billion a year.
In other words, it would cost $110 billion less than the bank bailouts, direct or indirect, did. The money to at least start to really fight child poverty is clearly there, even if no one wants to touch it.
Genuine job creation, health and anti-poverty programs would cost a fraction of the $110 billion left over total.
All of the job and service cuts that the Tories are proposing would be covered.
There would be no deficit.
What is abundantly clear is that our political leaders, and remember that this occurred primarily in a minority parliament when there was far greater oversight of the actions of the Harper Tories, have decided that while we clearly have the means and the social wealth to end poverty in Canada, the far greater priority is to subsidize the liquidity of the bloated profits of our, as it turns out, incompetent and not solid financial sector.
As to the question of which side these politicians are on, they have made this quite clear, and the public is fed this not as an assault by the wealthy and the corporations on society, but as a reasonable and responsible course of action.
There is a little that is worse than a class war that few are even willing to acknowledge is going on.
Wednesday, April 25, 2012
The Ontario budget and the ONDP caucus salaries by the numbers...or how being a part of the 2% really works.
So...let us go through it by the numbers.
The ONDP and and its defenders on the issue of the Ontario budget have been quick to talk of "making parliament work" and of being "responsible". The Liberals, obviously, have embraced this.
But make parliament work for who, exactly?
Many have applauded the so-called ONDP tax that applies to almost no one. The miniscule charge on the ULTRA wealthy that only comes into effect over $500,000 in income, non-inclusive! A tax that McGuinty has already said would be used to pay off capitalist creditors....making it, for what it is, a tax from the very rich to the very rich.
Meanwhile the appalling fact that welfare recipients must accept what is in reality a cut and the fact that no one at all has put the minimum wage on the table goes unmentioned.
Why?
Perhaps, in part, because the austerity budget agreed upon by the Liberals and the ONDP does not effect the pocket books of the ONDP caucus at all.
It is really easy to take a "sensible" and "reasonable" stand on the poor, minimum wage workers, and public sector workers when you have no connection to their reality in anyway. Especially when you have made no attempt to ensure that their wages or paltry benefits are not either frozen or might as well be. Your "contribution", which would normally take the form of increased taxes, amounts to exactly nothing.
Despite twenty years of personal income tax cuts, most pronounced on the income brackets the MPPs lie within, income tax cuts that have caused the entire "crisis" we exist in now, the only "reversal" of this that is being called for does not apply to the ONDP (or Liberal) caucus members who made this deal and whose incomes still fall well within the top 2% of earners.
So what does that mean in terms of numbers?
Well, in 2011 Andrea Horwath made $158,156.96. Cheri DiNovo 129,722.63. Peter Taubuns $123, 334.34. etc.
Meanwhile, a frozen minimum wage yearly income amounts to $21,320 a year and remains FROZEN. Which means, given inflation over the last year it has declined by over 3% relative to the cost of living.
Much, much worse is an income of a single person on welfare.
That was $597.92 a month prior to this budget. It will increase by 1% to, stunningly and appallingly, $603.90.
That means a yearly welfare income of, for a single recipient, approximately $7246.80.
Seriously.
It also means an increase of only around sixty dollars a year while none of the ONDP caucus members will see their taxes increase by even that same amount. In fact, their personal taxes will not increase by one penny. While, yet again, welfare and disability rates will decrease on the most vulnerable versus inflation.
By over 2% this year and by, stunningly, at least 10% over the last decade.
But, even staying with this year alone, to equal the "sacrifices" that those on welfare are making, by having their taxes increase at inflation in lock step to the actual, in real terms, decrease of those on welfare versus inflation, the ONDP caucus members should pay, at minimum, in excess of $2,400 a year in increased personal taxes.
They are not doing this, needless to say.
So before we talk about the alleged "courage" of a tax increase that will not even apply to them, let us at least recall that the ONDP caucus members that made this choice, (and it was a choice), made at minimum 16.5 times a year what a welfare recipient does, and around six times what a minimum wage worker does.
Per year.
And let us remember what living on these lower "incomes", especially in the face of other austerity cuts, really means,
Next time you wonder about income inequality in our society and why MPPs of any stripe don't seem to want to seriously do anything about it...it is worth considering these numbers.
The ONDP and and its defenders on the issue of the Ontario budget have been quick to talk of "making parliament work" and of being "responsible". The Liberals, obviously, have embraced this.
But make parliament work for who, exactly?
Many have applauded the so-called ONDP tax that applies to almost no one. The miniscule charge on the ULTRA wealthy that only comes into effect over $500,000 in income, non-inclusive! A tax that McGuinty has already said would be used to pay off capitalist creditors....making it, for what it is, a tax from the very rich to the very rich.
Meanwhile the appalling fact that welfare recipients must accept what is in reality a cut and the fact that no one at all has put the minimum wage on the table goes unmentioned.
Why?
Perhaps, in part, because the austerity budget agreed upon by the Liberals and the ONDP does not effect the pocket books of the ONDP caucus at all.
It is really easy to take a "sensible" and "reasonable" stand on the poor, minimum wage workers, and public sector workers when you have no connection to their reality in anyway. Especially when you have made no attempt to ensure that their wages or paltry benefits are not either frozen or might as well be. Your "contribution", which would normally take the form of increased taxes, amounts to exactly nothing.
Despite twenty years of personal income tax cuts, most pronounced on the income brackets the MPPs lie within, income tax cuts that have caused the entire "crisis" we exist in now, the only "reversal" of this that is being called for does not apply to the ONDP (or Liberal) caucus members who made this deal and whose incomes still fall well within the top 2% of earners.
So what does that mean in terms of numbers?
Well, in 2011 Andrea Horwath made $158,156.96. Cheri DiNovo 129,722.63. Peter Taubuns $123, 334.34. etc.
Meanwhile, a frozen minimum wage yearly income amounts to $21,320 a year and remains FROZEN. Which means, given inflation over the last year it has declined by over 3% relative to the cost of living.
Much, much worse is an income of a single person on welfare.
That was $597.92 a month prior to this budget. It will increase by 1% to, stunningly and appallingly, $603.90.
That means a yearly welfare income of, for a single recipient, approximately $7246.80.
Seriously.
It also means an increase of only around sixty dollars a year while none of the ONDP caucus members will see their taxes increase by even that same amount. In fact, their personal taxes will not increase by one penny. While, yet again, welfare and disability rates will decrease on the most vulnerable versus inflation.
By over 2% this year and by, stunningly, at least 10% over the last decade.
But, even staying with this year alone, to equal the "sacrifices" that those on welfare are making, by having their taxes increase at inflation in lock step to the actual, in real terms, decrease of those on welfare versus inflation, the ONDP caucus members should pay, at minimum, in excess of $2,400 a year in increased personal taxes.
They are not doing this, needless to say.
So before we talk about the alleged "courage" of a tax increase that will not even apply to them, let us at least recall that the ONDP caucus members that made this choice, (and it was a choice), made at minimum 16.5 times a year what a welfare recipient does, and around six times what a minimum wage worker does.
Per year.
And let us remember what living on these lower "incomes", especially in the face of other austerity cuts, really means,
Next time you wonder about income inequality in our society and why MPPs of any stripe don't seem to want to seriously do anything about it...it is worth considering these numbers.
Dear Comrade Fatah...
Dear Comrade Fatah,
We hope that this letter finds you well,
and that you have not been the victim of yet another round of
vicious twitter and facebook spamming from the Islamofascists and their
left-liberal allies in the "lamestream"
media.
We listened with great intent to your recent diatribe:
http://www.youtube.com/watch?feature=player_embedded&v=9mge5Um4Lx4
http://www.youtube.com/watch?feature=player_embedded&v=9mge5Um4Lx4
We truly do live in dangerous times, comrade, and they are only going to get worse. All of us have followed
with unceasing attention your recent talk and must commend you on your
courage in exposing the Muslim
Brotherhood's infiltration of the White House. Who knew that the
conspiracy had reached this far. Clearly those, unlike us, comrade, who
warned that this was what Obama was all about were right. We were his
willing dupes, and we feel slightly better to
hear that you too, ever vigilant as you are, were fooled. Sadly, the
only news outlet to carry the story of this fifth column operating in
the highest political office of the world has been Fox News, a tiny
oasis of truth in a sea of white, liberal guilt
masquerading as "tolerance". Let's see how tolerant they are when
al'Qaeda terrorists are raining bombs through downtown Toronto,
destroying the CBC building on Front St that the useful idiots in the
left-wing media use to push their multicultural values
on us.
The old left that you were a part of
would've never stood for this. Think of the kind of left we had in the
1930s, faced with the sort of brutality we see today. They would never
even have waited for the Canadian
Army to go to war. They would've reformed the Mackenzie-Papineau Battalion and launched suicide attacks at all those homophobic,
misogynistic, fascist, religious nutbars. And then, after they wiped
out Charles McVety and the Wildrose Party, they would've
gone overseas and taught the Taliban a thing or two about "tolerance"...
with a C7 rifle.
We know, brother, that if we rise up
against the Christian fascists, when we stand in solidarity against the
American Taliban, you will be there as well....as long, of course, as we
can afford your speaker fees.
Alas, that old militant left is nowhere
to be found. If they're not out somewhere calling on Israel to not
bulldoze Palestinian homes, they're wallowing in materialistic
decadence. All they ever seem to go
on about is money. Why, listening to these so-called "intellectuals",
you'd think that the biggest problem facing Canada is the $600 billion
in mortgage debt that the government will have to cover for the CMHC
when the housing bubble collapses. Some of these
"leftist" stooges of the Islamofacists actually think that fighting
around poverty and austerity issues, or trying to stop the creationists
and pro-life folks that have infiltrated our parliament in the
Conservative government is a priority. Obviously, we
need to make sure you reach a broader audience to show that the REAL
problem is a minor bureaucrat or two being hired by Obama. This will, indeed, bring
down the foundations of our freedom.
For our part, we've tried to convince
them of the gravity of the situation, but to no avail. Just the other
day, a friend related to us a story, about how a Muslim woman in full
Niqab managed to renew her driver's
license at the Ministry of Transportation simply by asking to be served
by a female attendant. This is how it begins: first, they came for the
Ministry of Transportation attendants, but one of us does not drive, so
we said nothing. Next, they asked to let
them have two hours to pray on Friday, but we sat on our asses surfing the
web, so we said nothing. Then, they opened a Falafel shop in our
neighbourhood, and there was no one left to stand on the corner with us
and chant pro-Canada slogans... well, no one except
a few neo-Nazis, the JDL and Hindu fascists, but it's also so awkward
standing with them - they still have a problem with our Marxism.
We don't know what to do anymore,
Tarek. Prudence says that we should simply move up north. One of us
has a friend who can build an underground bunker about 50 miles north of
Kenora. Most Muslims have probably
not acclimatized themselves to the cold yet, so we should be safe
there. We plan to stock-pile on canned food, ammunition and have our
own solar powered generator so we can survive indefinitely when the caliphate is declared. Until then, Comrade Fatah, we
stand by, your loyal readers, your faithful comrades in arms. And when
someone says that every Islamic person is just a damned Quaran thumping,
alcohol hating terrorist in training, we think of you and we say:
"Hey! Think about Comrade Fatah"
Yours, in revolutionary solidarity...
Michael Laxer
& Comrade Al Frankenstein
Tuesday, April 17, 2012
The austerity insanity. Coming soon to your Ontario.
So, its official. No matter what happens, Ontario is getting austerity.
The "brinkmanship" around the McGuinty budget has made this clear.
There is the Hudak slash and burn version that seeks to implement the full Drummond Report; a virtually guaranteed way to greatly exacerbate inequality and to drive Ontario back into recession.
There is the McGuinty version, which seeks to balance the books directly on the backs of labour, workers and the poor, while, perhaps intentionally from the start, trying to appear moderate by not bringing, for now, the full Drummond Report apocalypse that they themselves commissioned.
And then there is Horwath "populism" that confuses a miniscule tax increase on the extremely wealthy (and that, by the way, would not effect the pocketbooks of her or her caucus colleagues, despite their rather generous incomes relative to those of the "ordinary" citizens that they constantly ramble on about) and cutting the HST on the home heating of Bridal Path mansions with real progressive taxation. Instead of the reversal of the Harris era tax cuts, they offer an "austerity lite" that would presumably sing Kumbayah and Sixties protest songs while balancing the budget on the backs of, you guessed it, labour, workers and the poor.
Given that there is no reason to believe that anything will change, in terms of the positions of the parties on these issues in the event of an election, we can safely assume that Ontario, whether the budget is defeated or not and regardless of who is elected, will get an austerity budget either now, or just after the next election.
Both myself and others have pointed out that the alleged need for austerity is due, almost entirely, to a generation of reckless, irresponsible and immoral personal and corporate tax cuts that have fueled the massive growth in social inequality and have depleted the coffers of government to such an extent that their reversal alone, in-and-of itself, would balance the budget.
In addition to this, the Liberal government refused to allow Drummond, in the unlikely event that he would have, to even discuss tax increases. Horwath's farcically minor increase on the incomes of the ultra wealthy aside (an increase that would ONLY apply to income ABOVE $500,000...it would not even increase taxes on the first $500,000 of income), no party in Ontario's parliament is willing to even float the idea of genuine progressive tax increases and the reversal of the Harris era personal and corporate income tax cuts. Given that fact, there is no other way to balance the budget, if this is your priority, other than through program and public sector wage freezes and cuts. It is a self-fulfilling set of policy priorities.
And what it amounts to is that every mainstream political party in Ontario has consciously chosen to place the maintenance and continuance of these personal and corporate tax cuts ahead of the social benefits, youth programs, anti-poverty and housing programs, welfare and disability benefit increases, public sector wages and public sector services, and so many other government efforts that their reversal would fund.
It is that simple.
Beyond the immorality of this choice, one might note, despite all the pathetic preening of the parties to appear to be the most "fiscally responsible" managers of the economy, it is also pure idiocy as economic policy.
As Nobel Prize winning economist Paul Krugman has pointed out, the "Austerity Delusion" consists of the manifestly false idea that, emerging from the 2008 economic crisis that was both caused by and showed the bankruptcy of neo-conservative free market ideas and forced even right wing governments back to Keynesian interventionist, stimulus based spending models, somehow now is the time to reduce the budget deficits nominally "caused" by this stimulus through spending cuts. The same stimulus that saved capitalism itself in North America from a broad collapse into a long term depression. He has framed the appallingly self-destructive increasing austerity agendas of, for example, European governments in these terms: "This is, not to mince words, just insane".
And it is insane. Greece style insane. It is insane because the cuts proposed remove billions of dollars that stimulate economic activity through not only jobs, but also the direct impact that the personal spending of those who will be hit by austerity has on the economy. Just as the Ontario economy appears to be recovering, you begin to remove the reason it was recovering; government spending.
Instead of, as the right wing pundits would have it, preventing a Greek style debacle and social collapse, you start to engineer it. And that is due to the fact that what happened in Greece, for example, was not a result of irresponsible public spending, but rather of irresponsible activity by the European banking sector.
In Ontario, any "crisis" is also not a result of irresponsible spending (and the corporations had no trouble lining up for the spending when it was coming their way), it was due to irresponsible tax cuts and, as in Greece, the effects of the near collapse of a socially irresponsible unregulated capitalist model due to the actions of corporations themselves. Even in spite of the tax cuts, the Liberals were balancing the books until the crisis of 2008. Had it not been for the failure of the the "free market" capitalist economy and the need to bail-out corporations for their own reckless activity, there would have been no deficit.
It was not the fault of government or government spending, it was the fault of the neo-conservative corporate capitalist model.
And worse, of course, is that once austerity and its negative impacts have begun, they become self-perpetuating. The cuts will hurt the economy, depressing economic activity by removing the stimulus effect of government spending, thereby reducing revenue further, necessitating further cuts, etc.
We now know, thanks to a twenty year public policy detour, that tax cuts do not stimulate the economy, result in direct investment, or prevent capital flight. This has been proven repeatedly and the 2008 crisis should have, but did not, put an end to the entire neo-liberal fantasy that everyone from the NDP to the Tories continues to read as a bedtime story to the restive citizens of the province. But further, we know that they do not even stimulate personal spending to replace the lost stimulus of government spending due to the demonstrable and rather obvious fact that the vast bulk of the transfer of wealth that occurs due to these cuts is a transfer from direct stimulus in the form of spending by both government and the citizens that government spending most benefits to the massive and increasingly disproportionate amassing of non-productive and non-economically stimulating paper empires of personal wealth concentration.
Simplistically put, the proportion that one spends directly on products and services due to what one receives from personal tax cuts is in inverse proportion to one's wealth. The wealthiest, to whom by far the most wealth and revenue has been transferred by the tax cuts spend a far smaller proportion of it on goods and services as they have the least reason to.
Conversely, of course, a transfer of wealth, with tax increases, from upper income brackets to the bulk of the population through social programs, higher wages, government spending and so on is almost entirely used by those citizens in ways that have an obviously beneficial, direct, and even community centered economic impact.
If the goal is to be fiscally and economically responsible, then it is obvious that to do so there should be progressive tax increases on, at the least, the top thirty percent of income earners and that the revenue that this generates should be put into job creation programs, social spending and infrastructure expenditure.
That the media will howl with accusations of "class warfare" is irrelevant. The tax cuts were class warfare. They were the assault of the upper-middle class, the wealthy and the professional classes on everyone else. They successfully created an economic "policy" and political ideology centered around the transfer of wealth and social power from society as a whole to them.
Until we reverse these ideas, in terms of the economic and social equality impact of the policies of the various parties, no matter who you elect you will get the same basic economic and income equality result.
The "brinkmanship" around the McGuinty budget has made this clear.
There is the Hudak slash and burn version that seeks to implement the full Drummond Report; a virtually guaranteed way to greatly exacerbate inequality and to drive Ontario back into recession.
There is the McGuinty version, which seeks to balance the books directly on the backs of labour, workers and the poor, while, perhaps intentionally from the start, trying to appear moderate by not bringing, for now, the full Drummond Report apocalypse that they themselves commissioned.
And then there is Horwath "populism" that confuses a miniscule tax increase on the extremely wealthy (and that, by the way, would not effect the pocketbooks of her or her caucus colleagues, despite their rather generous incomes relative to those of the "ordinary" citizens that they constantly ramble on about) and cutting the HST on the home heating of Bridal Path mansions with real progressive taxation. Instead of the reversal of the Harris era tax cuts, they offer an "austerity lite" that would presumably sing Kumbayah and Sixties protest songs while balancing the budget on the backs of, you guessed it, labour, workers and the poor.
Given that there is no reason to believe that anything will change, in terms of the positions of the parties on these issues in the event of an election, we can safely assume that Ontario, whether the budget is defeated or not and regardless of who is elected, will get an austerity budget either now, or just after the next election.
Both myself and others have pointed out that the alleged need for austerity is due, almost entirely, to a generation of reckless, irresponsible and immoral personal and corporate tax cuts that have fueled the massive growth in social inequality and have depleted the coffers of government to such an extent that their reversal alone, in-and-of itself, would balance the budget.
In addition to this, the Liberal government refused to allow Drummond, in the unlikely event that he would have, to even discuss tax increases. Horwath's farcically minor increase on the incomes of the ultra wealthy aside (an increase that would ONLY apply to income ABOVE $500,000...it would not even increase taxes on the first $500,000 of income), no party in Ontario's parliament is willing to even float the idea of genuine progressive tax increases and the reversal of the Harris era personal and corporate income tax cuts. Given that fact, there is no other way to balance the budget, if this is your priority, other than through program and public sector wage freezes and cuts. It is a self-fulfilling set of policy priorities.
And what it amounts to is that every mainstream political party in Ontario has consciously chosen to place the maintenance and continuance of these personal and corporate tax cuts ahead of the social benefits, youth programs, anti-poverty and housing programs, welfare and disability benefit increases, public sector wages and public sector services, and so many other government efforts that their reversal would fund.
It is that simple.
Beyond the immorality of this choice, one might note, despite all the pathetic preening of the parties to appear to be the most "fiscally responsible" managers of the economy, it is also pure idiocy as economic policy.
As Nobel Prize winning economist Paul Krugman has pointed out, the "Austerity Delusion" consists of the manifestly false idea that, emerging from the 2008 economic crisis that was both caused by and showed the bankruptcy of neo-conservative free market ideas and forced even right wing governments back to Keynesian interventionist, stimulus based spending models, somehow now is the time to reduce the budget deficits nominally "caused" by this stimulus through spending cuts. The same stimulus that saved capitalism itself in North America from a broad collapse into a long term depression. He has framed the appallingly self-destructive increasing austerity agendas of, for example, European governments in these terms: "This is, not to mince words, just insane".
And it is insane. Greece style insane. It is insane because the cuts proposed remove billions of dollars that stimulate economic activity through not only jobs, but also the direct impact that the personal spending of those who will be hit by austerity has on the economy. Just as the Ontario economy appears to be recovering, you begin to remove the reason it was recovering; government spending.
Instead of, as the right wing pundits would have it, preventing a Greek style debacle and social collapse, you start to engineer it. And that is due to the fact that what happened in Greece, for example, was not a result of irresponsible public spending, but rather of irresponsible activity by the European banking sector.
In Ontario, any "crisis" is also not a result of irresponsible spending (and the corporations had no trouble lining up for the spending when it was coming their way), it was due to irresponsible tax cuts and, as in Greece, the effects of the near collapse of a socially irresponsible unregulated capitalist model due to the actions of corporations themselves. Even in spite of the tax cuts, the Liberals were balancing the books until the crisis of 2008. Had it not been for the failure of the the "free market" capitalist economy and the need to bail-out corporations for their own reckless activity, there would have been no deficit.
It was not the fault of government or government spending, it was the fault of the neo-conservative corporate capitalist model.
And worse, of course, is that once austerity and its negative impacts have begun, they become self-perpetuating. The cuts will hurt the economy, depressing economic activity by removing the stimulus effect of government spending, thereby reducing revenue further, necessitating further cuts, etc.
We now know, thanks to a twenty year public policy detour, that tax cuts do not stimulate the economy, result in direct investment, or prevent capital flight. This has been proven repeatedly and the 2008 crisis should have, but did not, put an end to the entire neo-liberal fantasy that everyone from the NDP to the Tories continues to read as a bedtime story to the restive citizens of the province. But further, we know that they do not even stimulate personal spending to replace the lost stimulus of government spending due to the demonstrable and rather obvious fact that the vast bulk of the transfer of wealth that occurs due to these cuts is a transfer from direct stimulus in the form of spending by both government and the citizens that government spending most benefits to the massive and increasingly disproportionate amassing of non-productive and non-economically stimulating paper empires of personal wealth concentration.
Simplistically put, the proportion that one spends directly on products and services due to what one receives from personal tax cuts is in inverse proportion to one's wealth. The wealthiest, to whom by far the most wealth and revenue has been transferred by the tax cuts spend a far smaller proportion of it on goods and services as they have the least reason to.
Conversely, of course, a transfer of wealth, with tax increases, from upper income brackets to the bulk of the population through social programs, higher wages, government spending and so on is almost entirely used by those citizens in ways that have an obviously beneficial, direct, and even community centered economic impact.
If the goal is to be fiscally and economically responsible, then it is obvious that to do so there should be progressive tax increases on, at the least, the top thirty percent of income earners and that the revenue that this generates should be put into job creation programs, social spending and infrastructure expenditure.
That the media will howl with accusations of "class warfare" is irrelevant. The tax cuts were class warfare. They were the assault of the upper-middle class, the wealthy and the professional classes on everyone else. They successfully created an economic "policy" and political ideology centered around the transfer of wealth and social power from society as a whole to them.
Until we reverse these ideas, in terms of the economic and social equality impact of the policies of the various parties, no matter who you elect you will get the same basic economic and income equality result.
Tuesday, March 6, 2012
Tax relief and the austerity agenda.
One has to hand it to the neo-liberal ideologues and the neoconservative political movement in Canada; they have managed to get all political parties, the mainstream media and most of the population on board the "tax relief" train. To one degree or another, they all kneel at the alter of this ultimate false god.
And in the wake of round-after-round of federal and provincial income, sales and corporate tax cuts, the threat of severe austerity measures grows as each year passes.
While this story has played itself out across the country, right now it is doing so most dramatically in the province of Ontario, where citizens are faced with an austerity agenda that will be one-degree-or-another of the disgraceful Drummond Report
The massive income tax cuts of the 90's and the past decade in Ontario are the chickens that have come home to roost and they are directly why our governments claim they cannot "afford" to fully fund the programmes that citizens depend on, and why they are increasingly rattling the sabres by giving us the entirely false and unnecessary choice between supposed impending economic collapse and massive service cuts and user fees.
To put this in perspective, we have to begin by looking at what potential revenue was lost by Ontario's two decades of tax cuts. By 2003 the Harris era personal income tax cuts alone were removing $11.6 billion per year from the Ontario treasury. (1) These tax cuts, which were never reversed, (and which no one is proposing to reverse) have meant that Ontario has lost a minimum of $90-100 billion in revenue since 2003, not including the further tax cuts of the McGuinty era and not including the revenue lost during the Harris era itself. They also were of far greater benefit to the upper income brackets than the lower.
The reversal of these specific tax cuts would have reduced Ontario's overall debt from in excess of $236 billion to under $140 billion. This is very significant, given that Ontario paid out more in interest on this debt in 2010-2011 than it spent on post secondary education. The interest the province is handing to global financial concerns would have been around half the nearly $10 billion it was. That pays for a lot of programmes. It would also have meant that instead of facing an approximately $16 billion deficit this year we would be facing at most a deficit of $4.5 billion.
And this does NOT include all the other tax cuts; the cuts to corporate taxes, to small business taxes, to personal taxes since 2003 under McGuinty, etc. It only includes cuts to personal taxes that occurred under Mike Harris.
In fact, McGuinty's government has bragged that it is cutting income taxes even further. In Ontario's Tax Plan for Jobs and Growth the Ontario government is openly proud about how their personal income tax "relief" will benefit 93% of Ontarians (which means many very well-off people) and take another $11.8 billion in revenue out of the coffers over three years. That's almost $4 billion a year. And that means that, without these additional tax cuts, had there not been the "tax relief" since 1995, there would have basically been no deficit and their would be no need for the austerity agenda at all.
If the corporate and small business tax cuts of the 1995-2011 period had not happened, combined with the restored revenues from personal income taxes mentioned above, we would be running a surplus now and we would have an overall debt well under the $100 billion mark.
And yet no one, in any of the mainstream political parties, is advocating for reversing the vast bulk of these taxation policies. Not even close.
It is very important to understand that for the majority of citizens the money that they have received through this "relief" does not even remotely compare to the services, social cohesion and opportunity that they have lost as a result of it.
Unless you are in one of the small tax brackets at the pinnacle of our very steep income pyramid, tax relief is no relief at all. 100 per cent the opposite in fact. Tax relief is the key reason we can't "afford" and do not have programmes like universal day care. It is the reason that "economists" like Don Drummond can claim a fiscal crisis where none need exist and advocate to cut your programmes to the bone in the name of "fiscal responsibility". It is the reason our social programmes are not as good as they were in the '80's and early '90's. The reason our social and even physical infrastructure is falling apart. The reason why all those kid's programmes that used to be free or at very low cost are now either gone or charge often high user fees. The reason why public transit exists at levels way below what is required. The reason why if you lose your job you can't count on any real long-term government help, why health care is in "crisis", why tuition fees are way up, and so much more. It is a large part of why it seems, despite unprecedented economic "growth" over the last 25 years, that we are asked over-and-over again to make sacrifices to keep the wealthy wealthy and big business afloat. And it is the primary reason we have been utterly unable to really confront the stain of child poverty and it is a root cause of the massive growth in social inequality.
The results of the theory and practice of "tax relief".
Tax relief is the greatest snake oil salesperson political trick of all time...it promised to deliver financial aid and social stability but, for the bulk of the population, it delivered the exact opposite.
After the 2008 crisis of capitalism and the massive funds that were found to bailout major corporations in both Canada and the USA, it is also very clear that the idea that all this "tax relief" would result in eternal prosperity, corporate investment and trickle-down wealth has now obviously been shown to be the total nonsense that it always was. Most of the population has less job security, less access to programmes and less of a share of overall social wealth than they did when it all began. So, one has to ask, what was the point if not simply to benefit companies and those with higher incomes?
But there is no real political counter-offensive against the basic idea of personal tax cuts.
As shown the McGuinty Liberals have carried the Harris tax cuts further, and have pledged repeatedly that any tax hikes are off the table. The Tories advocate for even deeper tax cuts, and have implied that they would, if they could, implement Drummond's report in its entirety: a recipe for Greek-style social collapse.
The Ontario NDP has called for a raise in the corporate tax rate back to 14%, but the money that this would put back into government coffers would be offset in large part by what the government would lose by the NDP's promises to cut the HST on home heating and gasoline, and by tax breaks to small business. They outline this themselves in their Plan for Affordable Change. Nowhere does this platform call for any personal tax increases, not even on the highest income earners. (2)
The plan's constant refrain of "Rewarding Job Creators", "Living Within our Means", and "Making Life Affordable" expose the central idiocy of the tax relief idea. These targeted tax cuts of the NDP are bad environmental policy, as many have pointed out, most notably the David Suzuki Foundation. But also, would life not be made considerably more affordable for the pocketbooks of "working families" if we reversed personal income tax cuts and used the money to create a provincial system of, for example, free daycare or free pharmacare?
These are programmes that cannot really happen in any other way. Sometimes one can't help but feel that Social Democrats in Canada think that one day they will deliver Scandinavian Social Democracy and social programmes with US level tax rates. They won't.
These are just two examples of the programmes that could have, and could yet exist, if we turned back the near twenty years of personal and corporate tax cuts. Instead we will likely see more service cuts, and we will see a yet greater burden on the province's poor, its workers and its middle-class.
In fact, of course, without personal tax increases on, at the very least, the top income brackets, all the rhetoric of the "shared pain" that is flowing from Queen's Park is unbelievably and contemptibly hollow.
Now, more than ever, we need to fight for real, fair, steeply graded progressive income taxes and to understand that only with these taxes can we build the kind of society that we want and can we fight the inequality that is the hallmark of our times.
(1)http://www.policyalternatives.ca/sites/default/files/uploads/publications/Ontario_Office_Pubs/bti_taxcuts.pdf
(2) The platform, I would note, also envisions savings from the kind of fictional government "gravy" that Rob Ford said was being wasted in Toronto. And yet increasing income taxes marginally on even the top 25% of incomes in Ontario, which it does not advocate, would generate far more government revenue than all these "savings" combined, and many times over.
And in the wake of round-after-round of federal and provincial income, sales and corporate tax cuts, the threat of severe austerity measures grows as each year passes.
While this story has played itself out across the country, right now it is doing so most dramatically in the province of Ontario, where citizens are faced with an austerity agenda that will be one-degree-or-another of the disgraceful Drummond Report
The massive income tax cuts of the 90's and the past decade in Ontario are the chickens that have come home to roost and they are directly why our governments claim they cannot "afford" to fully fund the programmes that citizens depend on, and why they are increasingly rattling the sabres by giving us the entirely false and unnecessary choice between supposed impending economic collapse and massive service cuts and user fees.
To put this in perspective, we have to begin by looking at what potential revenue was lost by Ontario's two decades of tax cuts. By 2003 the Harris era personal income tax cuts alone were removing $11.6 billion per year from the Ontario treasury. (1) These tax cuts, which were never reversed, (and which no one is proposing to reverse) have meant that Ontario has lost a minimum of $90-100 billion in revenue since 2003, not including the further tax cuts of the McGuinty era and not including the revenue lost during the Harris era itself. They also were of far greater benefit to the upper income brackets than the lower.
The reversal of these specific tax cuts would have reduced Ontario's overall debt from in excess of $236 billion to under $140 billion. This is very significant, given that Ontario paid out more in interest on this debt in 2010-2011 than it spent on post secondary education. The interest the province is handing to global financial concerns would have been around half the nearly $10 billion it was. That pays for a lot of programmes. It would also have meant that instead of facing an approximately $16 billion deficit this year we would be facing at most a deficit of $4.5 billion.
And this does NOT include all the other tax cuts; the cuts to corporate taxes, to small business taxes, to personal taxes since 2003 under McGuinty, etc. It only includes cuts to personal taxes that occurred under Mike Harris.
In fact, McGuinty's government has bragged that it is cutting income taxes even further. In Ontario's Tax Plan for Jobs and Growth the Ontario government is openly proud about how their personal income tax "relief" will benefit 93% of Ontarians (which means many very well-off people) and take another $11.8 billion in revenue out of the coffers over three years. That's almost $4 billion a year. And that means that, without these additional tax cuts, had there not been the "tax relief" since 1995, there would have basically been no deficit and their would be no need for the austerity agenda at all.
If the corporate and small business tax cuts of the 1995-2011 period had not happened, combined with the restored revenues from personal income taxes mentioned above, we would be running a surplus now and we would have an overall debt well under the $100 billion mark.
And yet no one, in any of the mainstream political parties, is advocating for reversing the vast bulk of these taxation policies. Not even close.
It is very important to understand that for the majority of citizens the money that they have received through this "relief" does not even remotely compare to the services, social cohesion and opportunity that they have lost as a result of it.
Unless you are in one of the small tax brackets at the pinnacle of our very steep income pyramid, tax relief is no relief at all. 100 per cent the opposite in fact. Tax relief is the key reason we can't "afford" and do not have programmes like universal day care. It is the reason that "economists" like Don Drummond can claim a fiscal crisis where none need exist and advocate to cut your programmes to the bone in the name of "fiscal responsibility". It is the reason our social programmes are not as good as they were in the '80's and early '90's. The reason our social and even physical infrastructure is falling apart. The reason why all those kid's programmes that used to be free or at very low cost are now either gone or charge often high user fees. The reason why public transit exists at levels way below what is required. The reason why if you lose your job you can't count on any real long-term government help, why health care is in "crisis", why tuition fees are way up, and so much more. It is a large part of why it seems, despite unprecedented economic "growth" over the last 25 years, that we are asked over-and-over again to make sacrifices to keep the wealthy wealthy and big business afloat. And it is the primary reason we have been utterly unable to really confront the stain of child poverty and it is a root cause of the massive growth in social inequality.
The results of the theory and practice of "tax relief".
Tax relief is the greatest snake oil salesperson political trick of all time...it promised to deliver financial aid and social stability but, for the bulk of the population, it delivered the exact opposite.
After the 2008 crisis of capitalism and the massive funds that were found to bailout major corporations in both Canada and the USA, it is also very clear that the idea that all this "tax relief" would result in eternal prosperity, corporate investment and trickle-down wealth has now obviously been shown to be the total nonsense that it always was. Most of the population has less job security, less access to programmes and less of a share of overall social wealth than they did when it all began. So, one has to ask, what was the point if not simply to benefit companies and those with higher incomes?
But there is no real political counter-offensive against the basic idea of personal tax cuts.
As shown the McGuinty Liberals have carried the Harris tax cuts further, and have pledged repeatedly that any tax hikes are off the table. The Tories advocate for even deeper tax cuts, and have implied that they would, if they could, implement Drummond's report in its entirety: a recipe for Greek-style social collapse.
The Ontario NDP has called for a raise in the corporate tax rate back to 14%, but the money that this would put back into government coffers would be offset in large part by what the government would lose by the NDP's promises to cut the HST on home heating and gasoline, and by tax breaks to small business. They outline this themselves in their Plan for Affordable Change. Nowhere does this platform call for any personal tax increases, not even on the highest income earners. (2)
The plan's constant refrain of "Rewarding Job Creators", "Living Within our Means", and "Making Life Affordable" expose the central idiocy of the tax relief idea. These targeted tax cuts of the NDP are bad environmental policy, as many have pointed out, most notably the David Suzuki Foundation. But also, would life not be made considerably more affordable for the pocketbooks of "working families" if we reversed personal income tax cuts and used the money to create a provincial system of, for example, free daycare or free pharmacare?
These are programmes that cannot really happen in any other way. Sometimes one can't help but feel that Social Democrats in Canada think that one day they will deliver Scandinavian Social Democracy and social programmes with US level tax rates. They won't.
These are just two examples of the programmes that could have, and could yet exist, if we turned back the near twenty years of personal and corporate tax cuts. Instead we will likely see more service cuts, and we will see a yet greater burden on the province's poor, its workers and its middle-class.
In fact, of course, without personal tax increases on, at the very least, the top income brackets, all the rhetoric of the "shared pain" that is flowing from Queen's Park is unbelievably and contemptibly hollow.
Now, more than ever, we need to fight for real, fair, steeply graded progressive income taxes and to understand that only with these taxes can we build the kind of society that we want and can we fight the inequality that is the hallmark of our times.
(1)http://www.policyalternatives.ca/sites/default/files/uploads/publications/Ontario_Office_Pubs/bti_taxcuts.pdf
(2) The platform, I would note, also envisions savings from the kind of fictional government "gravy" that Rob Ford said was being wasted in Toronto. And yet increasing income taxes marginally on even the top 25% of incomes in Ontario, which it does not advocate, would generate far more government revenue than all these "savings" combined, and many times over.
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