Saturday, February 13, 2010

Ed Clark did more to balloon Canada’s deficit than Stephen Harper himself

It really boggles my mind that anyone would take Ed Clark seriously. Here he is preaching to Stephen Harper that the government should increase taxes to address Canada’s $56 billion dollar deficit. Just for added effect, Ed Clark invokes all Canadians in making his self serving argument, as if to suggest that he speaks for all Canadians or is even in touch with average Canadians? Could Ed Clark be any more hypocritical if he tried, after all it was Ed Clark who crows about being the driving force behind Ontario’s and BC’s adoption of the HST, at least that’s what he was telling all his corporate clients at the TD Bank after Ontario announced it was ushering in the HST and Ed Clark patting himself on the back in an email about the role he played.

In order to assuage the masses and to buy temporary political cover from such an anti-populist move as ushering in an HST on everything, the conniving folks in government decided to issue what can only be described as “bribery cheques” to voters in amounts as much as $1,000. The overall cost of this bribery exercise, designed to make the grossly offensive HST tax more palatable was $4.3 billion for Ontario and $1.3 billion for BC and prompted Quebec to demand $2.6 billion, retroactively for having brought HST into practice in 1991.

And where did this money come from? It came from Ottawa and therefore Ed Clark’s pet HST project is responsible for $5.9 billion of Canada’s $56 billion deficit for 2009. A full 10% of the budget. Money borrowed from future generation to fund Ed Clark’s pet project of today. Well done Ed Clark! And now he’s the one most vocal about complaining about the deficit! Talk about a Benedict Arnold.

But it gets worse, when you stop and ask yourself about who is the beneficiary of this new HST tax that will raise over $4 billion in additional annual ax revenue for BC and Ontario? Surely this money is going to be dpeloyed for the benefit of all taxpayers and help deal with the deficits that are being run at the provicial level. Sadly the answer to that is NO, as this money is being deployed for the sole benefit of reducing the corporate tax rate for corporations like TD Bank.

I can’t think of anything more hypocritical than Ed Clark maligning the government for large deficits that Ed Clark himself did more than any other Canadian to produce, than for him to turn around and preach on behalf of all Canadians for an increase in taxes to deal with the deficit he helped create? Ed Clark may profess to speak for Canadians but he does not. He does not even speak on behalf of logic as all of his arguments are completely lacking in internal consistency or sound reasoning.

In order for Ed Clark to preserve any credibility on the matter that he has decided to publicly weigh in on and to embrace some measure of internal consistency in his arguments would be for him to join my call to the federal and provincial governments to redirect the monies they collect under the about to be introduced HST and direct it to reducing the deficit and for programs that benefit ALL those who pay it, rather than some fat cat Bay Street bank executives like himself and for the sole benefit of the shareholders of TD Bank and the corporate clientele that he was crowing to less than nine months ago in that self congratulatory email.

The other measure that Ed Clark would support if he were really concerned about Canada’s massive run away deficit would be calling for the adoption of the Marshall Savings Plan in Budget 2010 to stem the $1.5 billion in annual taxes that have already been lost by the absured double taxation and resultant foreign takeover of income trusts so that the remaining $6 billion in annual taxes can be preserved.

There you go, two initiatives proposed by me to deal with 20% of Canada’s $56 billion annual deficit. The third one would be to eliminate the capital gains treatment of executive stock options for CEO’s like Ed Clark, since they have to learn to pay employment income taxes like the rest of us and reserve capital gains taxation for situations where investors actually have capital at risk.

How about it Ed? Put your money where your mouth is. Do you really believe in what you are saying about reducing Canada’s deficit that you helped to produce? Do you actually believe that tax rates should be increased? If so, you will support me in these three tax policy proposals. Failing which, you will be a hypocrite.


Dr Mike said...

These CEOs are all the same

They are all willing to step over the dead bodies of the financially ruined to get what they want.

The big question becomes , how are the political parties complicit in this mess , who are they beholding to , & who might I ask do they really work for.

The poor guy on the street pays the freight , the CEOs pick-up the gold.

Same old , same old.

Dr Mike Popovich

Anonymous said...

But there's no risk of Harper raising taxes. He'll wait til his in opposition when, thanks to his profligate spending, the gov't is forced to raise taxes and the he'll blame them for the deficits in the first place!


Sent wirelessly from my BlackBerry device on the Bell network.

Anonymous said...

Brent, To your "third" point about the tax treatment of Executive Stock Options (with which I am and have always been) in agreement; is there anyone 'out there' (perhaps some accounting firm of repute?) who has ever done a calculation about what it 'costs' the Treasury to allow this scam? I think that if one were able to affix a 'cost' to this 'tax-leakage' issue it would be more potent as an argument in your/our favour but, I've never come across such a calculation. Surely, the NDP and their research economists on staff have taken a crack at this and, if they haven't, then my question to them is; "Why not?". My bet would be that the difference between taxing these 'one-way bets' at 23% (capital gains rate levels) vs. 46% (income tax rate levels) would prove to be a billion dollar "tax leakage" issue that would, to say the least, 'raise eyebrows' and become a political hot potato! If one doesn't go to the bank or, have the company as the case may be, lend one 'real money' for the purchase of these so-called "options" and thus one has no actual "capital" at risk, then surely, the capital "gains" from this exercize ought to be treated the same way as 'short' selling - the profits from which are taxed at full marginal rates! In other words, if there is no capital to be 'lost' from ownership of Exec Stock Options, how can there be any real capital GAINS to be had from them - as there was no actual "capital" put up by the owner of these options in the first place? The 23 'point' difference (which, when looked at another way, is a 100% 'differerntial') in the tax rate treatment of such "options" is therefore surely an argument of "tax leakage" n'est-ce-pas?The difference in the tax then payable from Mr. Clark's options alone plus those of his fellow (bank) Chief Executives would put a meaningful dent in the $56 billion deficit he seems so concerned that "all" Canadians should pay-up to eliminate!

My thought-of-the-day for you.

Best, Hugh

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