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The rich & the rest

Tuesday, November 8, 2016 1:11
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During the weekend political slugfest on this pathetic apolitical, slightly horny blog, an interesting divide emerged. Yes, it’s all about money. While over 500 comments were offered, fewer than a dozen didn’t make the cut, mostly because they irritated me. Here’s one of the few:

People should read Garth Turner understanding that he’s part of that 1% Trudeau wants to tax. He’s far from impartial. Maybe to him, gifts to the rich like unlimited TFSAs, income splitting, and rock bottom corporate taxes are very important. But they are not important to the average Canadian, who doesn’t benefit from these things in the slightest.

The Liberal and NDP platforms are both variations of the same sensible thing: we are going to take back these reckless, uncosted, tax giveaways made for short term political expediency, and in their place actually build something useful for the future. The parties differ on what they consider useful, which is a choice to be made.

Or you can choose to hunker down in your basement, clutching your cash, and watch the country crumble. But hey, you got that tax cut…

As you’d expect, I disagree. Rich people usually get that way because they work harder, think smarter, are employers rather than employees, innovate or embrace a profession society rewards. Sure, some are tools who inherited money, but we don’t seem to have a lot of those. In fact, we don’t have that many wealthy people. Period.

So saying everything will be cool if we just “tax the rich” is appealing. Just like “tax the corporations” sounds like we’re jackbooting GM, Suncor, RBC or other faceless conglomerates who have CEOs with trophy wives and shiny jets. The Libs and Dippers are going down this road, as you know, and likely finding a lot of traction as they do. You can see from the language above – calling TFSAs or income-splitting “gifts to the rich” and “reckless, uncosted tax giveaways” that this election is turning into a class war.

No wonder. Trudeau and Mulcair are working hard at it. The Liberals’ first plank is to raise taxes on those making $200,000 or over, and the NDP is funding their massive new spending program entirely with higher corporate revenues. Meanwhile both leaders are less than saintly when it comes to contributing their own fair share.

Mr. Trudeau earned $1.3 million in speaking fees around the time he entered federal politics and sheltered it inside a small business corporation instead of paying his allotted share as personal income. By doing so he reduced the tax payable by about half. Mr. Mulcair has been a professional politician for many years, collecting a public pension as a former Quebec member and cabinet minister, as well as pocketing $233,247 in taxpayer money as leader of the opposition. He also gets to live in a mansion in Ottawa, for free, called Stornoway. I’ve been inside it several times. Gorgeous. Here it is:

STORN

So, clearly, both of these guys are wealthy by Canadian standards. Yet neither has led by example. Now they’re both campaigning for more taxes on other Canadians, more public spending, more deficits (in the case of the Liberals) and way more government. For Stephen Harper’s part, his record also sucks – almost eight years of deficits, $170 billion more in public debt, an active role in creating unaffordable house prices and a recession. He earns $327,400 as prime minister and calls 24 Sussex Drive home. Also free. I’ve been there, too. Very cool.

Hard to say who’ll be living behind the black fence after October 19th, but there’s a good chance movers will be involved, based on current polling. So this might be a good time to determine if you’re one of the ‘rich’ people that will be in the crosshairs. I might add that my Dipper friends also tell me the NDP would like to introduce a wealth tax if given a majority mandate, plus partially eliminate the capital gains tax break. Maybe they’re just wishing. Beats me.

Anyway, there are two traditional definitions of rich: what you earn and what you have. First, the top 1% of Canadians – only about 312,000 people (a third of them doctors) – have incomes of $200,000 or more. Tax the rich so that the other 34,800,000 people get more? Are we as dumb as Mr. Trudeau believes? Apparently.

As for wealth, “high net worth” means $1 million or more in liquid assets, not including a house. There are 298,000 people in this category, or less than 1%. There’d be a lot more if we could replace house porn with common sense. But in this election all parties have decided the real estate bubble needs to stay dangerously inflated.

Well, there you have it. The vote that’s all about loaves and fishes, in which people are being told a handful can suffer so the multitudes may prosper, championed by two members of the 1% who live on public incomes. At least we dig irony.

Sadly in all of this, most people will lose. TFSA contribution limits pose an important escape hatch from being dependent on a fully-taxable pension – if you’re lucky enough to get one. Income-splitting slightly levels the playing field between families, where one spouse chooses to stay home with kids. Corporate tax rates are no gift to the elite, but ensure in a competitive world that Canada gets its fair share of capital and precious jobs.

One of the first things I was told, upon entering politics, became the most profound. “Just stand up and speak passionately about ‘us’ and ‘them’,” my mentor said. “They buy it every time.”

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