Donald Trump was right about one thing: the system is rigged. How else could only six people be as wealthy as the poorest half of people in the entire world? How did so many more become so much richer than they deserve? The super-rich didn’t work that much harder than you and me. Generally, they work much, much less.
This degree of inequality is not normal, by the way. In the 1960s and 1970s, when our middle class was strong and the family farm still flourishing, the federal government’s corporate income tax rate was 37 per cent. Over the years, Liberal and Conservative governments took turns dropping the corporate tax rate, on the assumption that letting corporations do whatever they want also benefits us.
Today, the corporate tax rate is less than half of what it was: 15 per cent. Not coincidentally, the middle class and the family farm are both in very big trouble. Canadian household debt has never been higher. Some young people predict they will never have a full-time job, let alone a pension.
Meanwhile, the rich use banks and corporate shares to syphon wealth away from our communities into offshore tax havens. Money is only useful when it’s circulating, funding innovation and jobs: hoarding creates stagnation. How much Canadian money is sitting in these tax havens doing nothing? Billions.
So why wouldn’t our government simply raise the corporate tax rate and shut down tax havens?
Well, three former Canadian Prime Ministers are named in the Paradise Papers (a set of 13.4 million confidential electronic documents relating to offshore investments that were leaked to a German newspaper): Jean Chrétien, Paul Martin, and Brian Mulroney. Stephen Bronfman, Canadian Prime Minister Justin Trudeau’s adviser and close friend, a Liberal Party fundraiser credited with putting Trudeau into office, moved millions of dollars offshore for former Liberal Party Senator Leo Kolber.
There are a lot of Liberals in that list but, to be fair, the Liberals ordered a crackdown on tax cheats which has recouped $25 billion in lost tax revenue in the past two years. It was the Conservatives who started allowing Canadian businesses to set up shop in tax havens and receive profits tax-free.
This is why people think politicians are all the same: often, they are.
So let’s say we elect a government with gonads. First, the Toronto establishment (the Bronfman’s and the rest of that bunch) will go nuts. That will be fun. If they threaten to take their money and move elsewhere if we shut down legal tax havens, we’ll shrug. They’re not our best friends. And, when the storms and wars and corruption get to them and they want to come back, they’ll pay their taxes. All of them.
If we raise corporate taxes, Jason Kenney and the UCP will go completely berserk. Outfits like the Fraser Institute and the Canadian Taxpayers Association will trot out a bunch of research showing that, as sure as dawn follows darkness, any interference with profit-taking will be followed by economic armageddon. (Follow the funding trail and you’ll see who pays for that research). Anyway, It’s not true. Throughout history, rich people objected to ending slavery, minimum wage, equal pay for women, women being being paid to work at all..generally, the things that actually benefitted the economy (and are better for everybody, not just them).
But let’s say the worst happens and big corporations leave. Well, shucks, that creates a lot of opportunity for new investors, doesn’t it? Maybe there are millions of immigrants with billions of dollars who would love to work hard, pay reasonable taxes and revitalize the economy in a fair, safe country like Canada. What are the chances?
So let’s tell those greedy, hoarding tax evaders that, if they want to live in a good country, they have to help the rest of us pay for it.