We, progressives, make a big mistake in not standing up and supporting the Liberals when they come under massive fire from Canada’s elites for attempting even minimal tax reform. I’m not arguing that the Trudeau Liberals are great. Gads, the electoral reform debacle is an astounding slap in the face to those who believed Trudeau’s election words meant something. Kinder Morgan and Energy East pipelines are a betrayal of Trudeau’s commitment to climate change. Trudeau’s promotion of investor rights over democratic values is abominable. The proposed Liberal tax reforms that the elites have pulled all the stops to defeat are play things in the face of the massive flood of Canadian tax revenues that is flowing out of Canada and into nefarious international tax havens. AND—STILL, I think we make a serious and consequential mistake in hiding our heads in the sand saying “Ah, that Liberal tax reform is minimal and has nothing to do with me anyway.”
But it does have a great deal to do with “me”—us, because what is at play here is, most consequentially, not about a few extra dollars to invest in our common good by closing a rather small leak of “sprinkled” tax revenue. “Sprinkling taxable income over family members—pretending that—for tax purposes– one $250,000 income is really just 5 $50,000 dollar incomes–if you have the accountants to make it look that way—is, as Trudeau, says WRONG; utterly wrong and unfair to the people who have to support a whole family on $50,000 a year. But the AMOUNT of money is insignificant compared to the massive hemorrhaging of tax money to legal dodges like Real Estate Limited Partnerships(RELP), available only to those who have over $1 million in “investable net worth” or an annual income over $200,000. RELP is very generous to wealthy real estate investors (as though they are in need of this kind of welfare for the wealthy). Under the RELP (more accurately Real Easy to Leech off the Public) investors can immediately write off 50 % of their initial investment in real estate then treat income on the investment as a capital gain thus lowering the taxes on the excessively wealthy even further. Then, having milked the RELP for personal gain for years–just to frost the cake–the wealthy investor can transfer the investment to a low earning family member to gut all pretense of tax fairness.
Notice that I haven’t used the term “tax loopholes.” To me the term loophole seems to indicate some small oversight of carelessness when what we have is a very intentional opening of the flood gates to let tax dollars stream out to the benefit of the wealthy and the detriment of the common good.
But all these contorted, “legitimate” tax dodges–including RELP– are just small change compared to the massive tax and accountability lost to offshore tax havens that have been, very intentionally, allowed to flourish by governments who have no interest in the kind of tax fairness that would require corporations and the elites to pay a fair share of the costs of a society that has so rewarded them. It has been estimated that the money in “offshore” accounts is, now, nearly equal to that held in the somewhat legitimate, somewhat accountable economy.
It is no accident that Trudeau’s chief fundraiser is heavily involved in Cayman Island tax dodging schemes. Recently obtained data reveals Canadians as individuals and companies are flocking to offshore corporate accounts where small fees are paid to hide vast blocks of wealth from legitimate taxation in Canada.
If you are still with me, you must be asking, “How, the heck, could Norm even jokingly suggest that “We, progressives, make a big mistake in not standing up and supporting the Liberals when they are under massive fire from Canada’s elites for attempting even minimal tax reform?” Good question. But, recall I was suggesting that there is more “at play” than sprinkling or RELPed incomes. What is at play, that I haven’t seen anyone else discussing, is the massive uprising of Canada’s elites to send a clear message to the Liberals that meaningful tax reform—reform that sees the elites paying a fair share—simply will not be tolerated. Just listen to the synchronicity between the messages coming out of the Conservative Party and the message played over and over in all the corporate press. This isn’t about sprinkling. It is about the elites stomping on Trudeau and the Liberal Party so hard over a small tax reform that they will not dare to talk about meaningful tax reform and financial accountability.
To listen to/read the corporate press you’d think the Liberals just swiped the baby bottle from the crib or cancelled all meals for the homeless. Every page that talks of the Liberal tax reforms talks about “hard working middle class people.” You know—those poor people who only make $250,000 to millions of dollars a year. And Trudeau had the unmitigated gall to say that it is unfair for someone making $50,000 a year to pay the same tax rate as someone making over $250,000. That kind of talk had to be stopped and the elite press is nailing the Liberals with assertions over and over in every paper, on every radio and TV news broadcast. The Liberals are anti people—you know real people that make the kind of money our corporate press represents. It isn’t about sprinkling. It is about sending a profound warning to the Liberals that they better not even think of meaningful tax reform or there is no bottom to the scorn that the corporate press will heap on their heads—their political graves.
And we progressives, sit by, watching it all happen and we say, “Hey, Trudeau didn’t keep his promise on electoral reform. Heck—I don’t even make $50,000 a year why should I spend my precious time worrying about a minor tax reform that means nothing to me. But it isn’t minor, in that, it isn’t about this reform; it is about the very idea of tax reform that even begins down the path to tax fairness. If we sit by quietly as Trudeau’s minor tax reform gets kicked in the teeth, who is that will dare talk of meaningful tax reform? Did you hear the corporate press throwing this kind of fit when KPMG was deceitfully helping wealthy clients evade taxes by creating a shell offshore account that the wealthy could “gift” with millions and be “gifted” back with tax free money –their own—or I should say with our money; money that should have gone into building a healthy, safe, sustainable, just society for all of us? It barely got a mention in the back pages because it was the kind of tax policy that the corporate press is, obviously, very happy with.
We don’t have to say hooray for the Liberals. They don’t deserve that. But we need to say, really clearly hooray for this one small step. Let’s take the next step and the next. Hooray, for beginning the discussion about tax fairness. Hooray for even suggesting our tax system should be fairer than the of, by and for the few system we have now.Norm Reynolds