Monday, September 28, 2009

Sask. finance minister rejects flat tax

I usually concentrate on politics at the federal level because I feel the horrifying level of federal income tax that I pay is what affects my life the most. But a recent study released by the board of Enterprise Saskatchewan got me excited. In the report, it was recommended that Saskatchewan adopt a flat tax system similar to Alberta.

I was excited because I thought that maybe, just maybe, the time was right in Saskatchewan to introduce such a simple and elegant idea. With the Saskatchewan Party firmly in control politically, I thought there was no chance that the socialists in this province, the NDP, could screw it up. And besides, Finance Minister Rod Gantefoer announced that "they were seriously considering it."

Well, no sooner had they announced they were seriously considering it, it became obvious that they had not seriously considered it. Another announcement came out a few days later saying they were rejecting the idea of a 10% flat tax in Saskatchewan. With Gantefoer saying: 'Raising tax rates on low-income earners to benefit wealthier residents "is not on."'

Ok, so is an 11% flat tax in Saskatchewan, "on"?

Because by saying such a stupid statement to the press, you are sounding a lot like a member of the NDP party, Rod. And not even the finance minister of said party.

For starters, who said anything about raising the tax rate on low income earners? Did you miss the part in the report about raising the personal exemption, which would in fact lower taxes for all taxpayers and eliminate a lot of the lowest income earners from paying taxes? And how could simplifying the tax code, lowering taxes for everyone, be considered a "benefit to the wealthy"?

I had seriously thought that we finally had a conservative party in power in this country that wasn't afraid to talk about conservative policies and even had the power to implement them. My hopes were dashed after hearing our Finance Minister doing his best impression of an NDP Minister of Central Economic Planning.

Friday, September 25, 2009

Economic "rights"

Although I haven't watched and will never watch Michael Moore's new film Capitalism: A Love Story, I discovered that near the end he quotes FDR's "economic Bill of Rights." Here is what FDR proposed as economic "rights":
  1. The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.
  2. The right to earn enough to provide adequate food and clothing and recreation.
  3. The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
  4. The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
  5. The right of every family to a decent home.
  6. The right to adequate medical care and the opportunity to achieve and enjoy good health.
  7. The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment.
  8. The right to a good education.
While at first glance these "rights" seem banal or innocuous, they are in fact a deception. The deception starts with what is omitted in these statements. The considerations that would take these from proposals to actual rights are left out.

1. What determines a job's usefulness? How remunerative should each job be? And more importantly, who decides usefulness and remuneration? Also, humans in general are notoriously dynamic in nature. What seems "useful" and well remunerated at first will undeniably become mundane to the average person. In which case, who will organise the mass transfers between jobs and industry caused not by insufficient remunerations, but by sheer boredom?

2. What level is "adequate" and who decides?

3. This is basically a regurgitation of #1.

4. This "right" is by far the most irrational: First of all, in planned and controlled economies there would be no "business men" large or small, but rather government employees. And competition is what thwarts the monopoly so how can you inhibit competition (what is "unfair" competition by the way?) and still eliminate the monopoly? Put another way, a government that plans the economy by definition destroys competition, and is an implicit monopoly!

The rest all suffer from the same weakness to the question regarding the definition of "adequate" and more importantly the "who decides" question. I wasn't alive to be ruled by someone such as FDR and for that I am very grateful.

It is the "who" question that highlights the most evil part of this proposed system of "rights", which seems to me the most glaring and unavoidable flaw in the design; however, this is never mentioned by people such as Moore (and the entire Democratic party in the US). Because once you give a group of people ultimate power over people's lives (and make no mistake to implement these "rights" you would have to do so) there is no countering force left to limit that power. And thus the end result is dictatorship.

Thursday, September 17, 2009

Liberal Hypocricy

Quite often I try to think of the most significant difference between conservative minded people and the more left wing. I am interested in one quintessential difference that maybe sits at the root of our many disagreements.

While I am not there yet, I do think that there are some things going on today in Canadian politics that hit close to the heart of the matter. Take a look at some of the current Liberal press releases and talking points making the rounds these days.

"Harper's reluctant coalition" - Ibbitson/Taber; Globe and Mail
And Iggy on CTV the other night, while not insulting the host, claiming that Harper is forming his own coalition with the NDP. (It was actually very funny when Iggy insulted the host about sleeping through his press release because the host dead-panned him and said: 'Well, I wasn't asleep at the beginning.' hahaha)

What Ignatieff's Liberals (assisted by their allies, the left wing media outlets, G&M, TStar) are attempting to do is dilute the veracity of the criticisms leveled against them because they formed such a sinister coalition and tried to steal power. Hypocrisy is at the heart of every Liberal and I think that is a defining characteristic. Whenever the Liberals say anything of substance, you don't have to look back more than a few days to find them saying precisely the opposite. It is a party that has no rudder and no bedrock foundation. They will say anything and do anything to become popular enough to regain power.

So as an example, these days the Libs are flogging the notion that somehow the Bloc and/or NDP voting with the government on a confidence motion equals a coalition. And they are whining: 'See! Harper is forming a coalition. He's bad.' But for the past year we have been forced to listen to how horrible Harper is behaving because he won't work with the other parties to form legislation. So the minute the Conservative propose a bill that the other parties can agree with, there isn't even a lull in the negativity as left wing media attempt to straddle both sides of the argument (closely resembling those Las Vegas contortionists in the process). Harper is bad because he won't work with the other parties. And similtaneously Harper is bad when he creates legislation that they other parties agree with; he is forming a coalition. Yeah, ok, now put the other leg behind your ear.

Toss into the mix the fact that the Opposition to this day still denies forming a coalition. Despite the fact that there are probably 50 - 100 videos on youtube that any Canadian, at a moments notice, can pull up showing all three of them signing legal documents saying they will form a coalition.

There is great danger when a party abandons principles in favour of 'which way is the wind blowing,' populism. For the same reason that it is foolish to let go of the tiller on a sail boat in a stiff breeze.

Stimulate Shmimulate

There has been a lot of crazy ideas that have come out of this recession, but by far the most idiotic has to be this idea of stimulus spending bringing us out of recession.

It is the most natural thing in the world for politicians to want to spend money like it is water. That's because they didn't have to earn it. They confiscated it from the citizens through forced payroll deductions and it magically appears in the coffers thanks to our modern financial system. It comes to the coffers so easily they now call it "Government Revenue". No, "revenue" comes from real work, a business. I think "spoils" or "booty" is the accurate descriptor. Anyway, the crazy thing is how the everyday person has been hoodwinked into allowing it! Or hoodwinked into believing it! The stimulus.

Get this: The Keynesian fools were actually claiming that tax reductions as a stimulus were bad because, wait for it, people would NOT spend the money. This has to be the most absurd argument I have ever heard in the face of these economic times. I realize that everyone wants the economic recovery to happen as fast as possible and for the stock market to rebound right back up where it was before the crash, but wake up! It isn't going to happen! And how can the idea of saving be considered bad in this environment, really? With millions of people losing their homes, their jobs, maxing out their credit cards and only paying the minimum every month, do we really want to demonize the concept of slowing our spending and saving a little?

'We can't lower taxes because people might not spend their tax refund right away.' For one thing these people must not have friends like I do. Because if they did, they would know that the surest thing in the world is how fast the tax refund gets spent. So right there their argument is blown out of the water and in fact is the exact opposite to reality. People spend their tax return immediately, so there is no faster, more deterministic way to stimulate an economy than by lowering taxes retroactively. Because you know that within 1 year there will be a massive spending spree had by virtually all.

Right, so what about those evil people (like myself), who actually discipline themselves enough to take their tax return and... oh the horror... save it. Well, you are covered there too because all my savings go into some form of investment. So the worst case scenario is you have a large portion of the stimulus spent immediately on useless depreciating assets, yearned after by people incapable of differentiating between wants and needs (cash for clunkers anyone?), and a small portion who provide capital to private business as an investment, or help out the banks with their deposits.

Instead, what did we get? We got the government blowing years of disciplined budgeting, turning to massive deficit spending. But all that means is that a few government bureaucrats will get to do all the spending instead of the regular folk. And they are spending our money! Here is a perfect example to illustrate my point: I heard that the city of Toronto used stimulus money to hire Bill Clinton at a speaking engagement, however, they are having trouble selling the tickets! So the regular folk don't want to see Bill Clinton, but that doesn't matter because the government bureaucrat has already spent the money. How the hell is that a stimulus? And the bureaucrats go on and on about the absolute crisis that we are apparently enduring with our infrastructure. Like at any moment all the sewers are going to explode and destroy all the city streets. So we should go out and replace it all at the same time! Now! Before it is too late! Give me a break.

What we have now is a huge $50B - $60B deficit being added to the massive federal debt that we racked up the last time our government went Keynesian. And we have been trying to get out from under it, without success, for the past 30 years!! See, government fat cats understand the first part of Keynes theory, about the massive deficit spending during the lean years, but they always lose their train of thought when the good years return and they conveniently forget about using the surpluses to pay off the debt.