Gee, the Globe and Mail is giving Op Ed space today to commercial enterprise CARP, yet publisher Phillip Crawley (pictured above) refused to publish this Op Ed of mine, after letters of support from many groups including the National Citizens Council:
December 1, 2006
Mr. Flaherty’s Sleight of Hand
Mr. Flaherty is not without his creative side. Creative accounting that is.
During his short time in office, our Finance Minister has had the opportunity to demonstrate his skills at dealing with two issues that profoundly touch on Canadians saving for retirement. The first involves the Canada Pension Plan and the other involves income trusts. Because 70% of Canadians are not members of a defined benefits pension plan, these issues will affect virtually all Canadians at some point in their lives.
With much fanfare, Mr. Flaherty recently announced that the Conservative government’s fiscal plan would see the federal debt paid off by 2021. What didn’t receive quite the same level of transparency, was that he was using the assets of the Canada Pension Plan to do so. Mr. Flaherty would probably argue that this is no different than using your RRSP to pay off your mortgage. Wrong Mr. Flaherty, this is a case of using my RRSP to pay off my neighbour’s mortgage. This is nothing more than an accounting sleight of hand
As the second act of his performance, Mr. Flaherty has again made liberal use of his accounting creativity to effectively kill an important retirement savings investment choice, namely income trusts, in the false belief that they cause tax leakage. Mr. Flaherty’s so called Tax Fairness Plan is ostensibly intended to “ensure that taxes are not unfairly shifted onto Canadian tax payers”. If there is no tax leakage, then there would be no shifting. If there is no shifting, then there should be no need for “fairness” measures. What Mr. Flaherty has not revealed to Canadians or any Member of Parliament is that his assertion of tax leakage is simply another accounting sleight of hand.
Some 38% of Income Trusts are held in retirement accounts on which the government collects retirement taxes. In 2004, approximately $9 billion in retirement taxes were paid by seniors on $52 billion of retirement income.
In Mr. Flaherty’s good/bad analysis of the alleged tax leakage of income trusts versus companies, he has chosen to leave out 38% of the good, namely retirement taxes. If Mr. Flaherty were to simply acknowledge these retirement taxes paid by Canadian seniors, he would realize that income trusts are tax neutral. Not only does Mr. Flaherty not acknowledge retirement taxes, he uses that very analysis to devise policies that are regressive to Canadian seniors and the choices all Canadians have as they too make provision for retirement income. Sleight of hand, or circular injustice?
Mr. Flaherty’s creativity however has its limits. His approach to income trusts, apart from being misguided, has shown no creativity in mitigating the loss to Canadians’ hard earned savings. His approach is better described as blunt force trauma.
This is a moot point anyway, since all Canadians will at some point in their lives be vastly better off if Mr. Flaherty would simply admit his mistake and repudiate these unfounded measures.
Do the Zoomer math: The votes are there for politicians who get it
Go to the Conservative, Liberal and NDP websites. Try to find the phrase ‘baby boomers'
From Sunday's Globe and MailPublished on Friday, Feb. 19, 2010 8:58PM ESTLast updated on Sunday, Feb. 21, 2010 2:56AM EST
Lyndon Johnson once observed that the most important talent for a politician is the ability to count. Michael Ignatieff should take note.
Barack Obama is taking note – maybe, finally, but possibly too late.
Who controls the ballot box? The voting group that politicians are paying the least amount of attention to.
It's the Zoomers, stupid.
“They got mad. They got organized. ... And they voted.”
In both Canada and the United States, the Zoomers (the 45-plus) account for about 60 per cent of all ballots cast in national elections. This percentage dwarfs all other age groups. Yet, the politicians – and most of the media – focus on other age groups who don't bring a fraction of the same political clout.
Mr. Obama's meteoric rise was accompanied by a media fascination with the youth vote. Mr. Obama, we were told, was energizing young voters, bringing them out in record numbers, transforming the U.S. political landscape. But the numbers say: Not really.
Even with Obamamania, the “youth” vote (18 to 24) represented just 9.5 per cent of all votes cast. That was barely a percentage point higher than in the 2004 Bush-Kerry election, and lower than in the 1972 Nixon-McGovern one.
By contrast, the Zoomer vote represented 58.2 per cent of all votes cast. In other words, for every “youth” ballot, there were six Zoomer ballots. Of this, the “seniors” vote (65-plus) accounted for 20 per cent of votes cast – double the “youth” vote.
What's more, the “seniors” actually went for John McCain by 53 per cent to 46 per cent – a huge swing away from Mr. Obama's election margin of 53 per cent to 46 per cent. A ticking time bomb, waiting to go off.
Then along came health-care reform. Zoomers – and, in particular, “seniors” – lined up against it. Whether you think they were right or wrong, they became convinced the proposed legislation would cut the health-care benefits they were already receiving.
Result? Let's follow Lyndon Johnson's dictum and do the math.
According to the most recent Rasmussen poll, the “seniors” segment of the Zoomer demographic opposes the health-reform legislation by 62 per cent to 35 per cent.
They got mad. They got organized. They became the major impetus behind the Tea Party movement. And they voted.
In Massachusetts, Republican Scott Brown won the seat Teddy Kennedy had held for 47 years – and in a state that Mr. Obama had carried by 26 points less than a year earlier. “Seniors” favoured Mr. Brown by 58 per cent to 38 per cent – in no other age group was the spread so wide. They also opposed the new health-care legislation by 48 per cent to 28 per cent.
Mr. Obama is showing some signs of recognizing his problem. In a speech in Ohio last month, he acknowledged the need to pay attention to “seniors” because they vote in such high numbers.
Now let's look at Canada. Michael Ignatieff has declared that a national daycare program is his No. 1 policy priority. Let's run the numbers.
According to Statistics Canada, the number of families with children 0 to 6 is just over 860,000. Let's be generous and assume every single one of them would favour Mr. Ignatieff's daycare policy. Although we know some are single moms, let's multiply the number of households by two (we're deliberately making the number as large as we can).
So we have 860,000 x 2. That's 1,720,000. Which means 1,720,000 voters, right?
Wrong. If the lion's share of these people came from the 18-to-24 age group, only 37 per cent of them voted in the 2004 Canadian election. If some are from the 25-to-44 age group, that's still only 50 per cent who voted. Though there are probably more in the younger group, let's average the two and call it 43 per cent.
That comes to about 740,000 voters. Subtract non-citizens who can't vote, and you have about 700,000 voters. Tops.
Now here's the kicker: The actual number of 45-plus voters in the 2004 election was 9.2 million.
Think of the impact of, say, a policy to offer more generous tax credits for caregivers. Or pension reform. Or improvements in prescription drug benefits. You'd be appealing to more than 10 times the number of voters than those who would benefit from a national daycare program.
Now it could be argued that a national daycare program would attract more voters than only those who directly benefit. That's true. But the same could be said of tax credits for caregivers or pension reform or more generous drug benefits. There's always a multiplier effect of other interested parties. But would you rather be multiplying from a base of 700,000 voters (and that's being generous) or 9,200,000 voters?
It seems obvious, doesn't it? But go to the websites of the Conservatives, Liberals and NDP. Try to find the phrase “baby boomers” – never mind Zoomers. Try to find any reference to “seniors” other than as old and helpless – and far down the list of policy priorities, if they're mentioned at all.
Yet, the votes are sitting right there, waiting for a politician who gets it. Just ask Barack Obama.
David Cravit is vice-president of ZoomerMedia Ltd. and author ofThe New Old.
Sunday, February 21, 2010
Posted by Fillibluster at 7:49 AM