Thursday, September 7, 2017

Data In Lieu of Spin Please & Stop taking money from farmers and other small business

Fiscal Policy is important, it can be a means by which to offer leadership and seed the economy or it can be irresponsible and be misdirected by the political process. This is in no way a partisan issue, this a structural issue. Fiscal activities taken by any government have no clear objective reporting mechanism to the public; how could that be you ask, because, voters punish mistakes. The problem is the people here to hold the government to account get spin instead of data.

Further, this is true of all legislation outcomes, when the government says it is going to lift children out of poverty, we need to know what that means and if it happened.  The details need to be attached to set of metrics the public can understand and the legislation monitored and objectively reported on to the public; in this way, good results are rewarded and bad results can be identified and mitigated – the most painful aspect now is that mistakes get propagated and myths rule.

The other factor of concern is that there are key constituents that represent massive voting influence  – large corporations and their diaspora and large labour unions. These two constituents are important, we need them and we need to respond to their interests.  It is important to note, however, that we have a whole society to run – the artisan - small business - farmer - tourism etc. …  the “third” constituency, is as large a group but their message is defused and as a result, they get left behind.

The recent choice by the Federal Liberals to prevent income distribution between family members is an assault on the “third” constituency, people who are independent and self-employed.  The proponents of curtailing the ability for a farmer to pay family members call the distribution of income – income sprinkling. It behooves us to remember that people in this category often buy their own insurance – No WCB for them – when the income stops coming – No EI for them – they work their whole lives to build a future for their kids or work to build a future with their kids – they want to have avenues to transfer their wealth to their kids. Yes there is a tax advantage in being able to pay your family members, spouse – you can in effect split your income between people and reduce the overall tax burden – that helps to make up for the fact that the third constituency is outside the social safety AND it helps make up for the mountain of red tape they wade through on a daily basis just for the chance to contribute. Punish this sector long enough and hard enough they will be gone and with them the family, the independent individual and eventually the other two constituents.

The tax system needs an overhaul to be sure, less pecking at the fringes and more redesign.  The government spends about $ 4 billion a year collecting taxes, then business and individuals spend as much, likely more. $ 8 billion dollars people could be spending on much better things – our biggest transaction cost. It is a lot to ask the average Canadian to give up nearly half of what they earn; it adds insult to injury to make them pay to do it. I am unsure if this is one tax grab too far or not, soon enough people will say, this is enough.  Andrew Coyne reports that Bombardier nabbed nearly $3.7 billion recently in various forms of government assistance, imagine what our young people could do with $ 4 billing we spend collecting taxes AND the nearly 4 billion we gave to a single corporation. Speaking of sprinkling, it feels a little like farmers and the like,  are getting sprinkled on their backs and the feds are tellin’ them its rainin’. We can do better.

More Thinking on the Subject
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