Can We Have an Adult Conversation About Taxes? Sure, but...

An editorial entitled Can We Have an Adult Conversation About Taxes? was published today wherein the The Star attempted to blow a hole through one of the central tenets of modern economic theory: the idea that lower marginal tax rates result in higher government revenue.

There is a detailed explanation of this theory (known as the Laffer Curve) here.

You may also recall hearing about this theory in Economics 101. I'm sure its also mentioned in Economics for Dummies.

The Star column reads:

Then there's the right-wing's childish fantasy that if you lower tax rates, government revenue will actually increase. We can all pay less tax, and government will get more revenue.


Try that one on a 4-year-old. It defies logic. Here's the reality: Data from the OECD demonstrate that, since 1995, tax revenue in Canada has dropped from 36 per cent of GDP to 33 per cent of GDP. That may not sound like much, but it represents a loss of nearly $50 billion a year in public revenue. And we wonder why Canada plunged into a $50 billion deficit magically overnight.

Perhaps a reality check is in order. I know this may be difficult The Star, but for a goof, try it anyway.

1995 GDP: $788.04 Billion, resulting in $283.70 Billion tax revenue
2005 GDP: $1,368.73 Billion, resulting in $451.7 Billion tax revenue

source: IMF Financial Statistics, Canadian Economy Wiki.

Maybe the problem with the Star is they don't have any 4 year olds doing their math.

Landon a Party Pooper...

Poor Gordon Landon. The councillor for York Region was moonlighting as a CPC candidate for Markham-Unionville, but was audacious enough to hope that speaking his mind in public might result in making a difference for his constituents. It made a difference all right. He is no longer the candidate. Imagine having to 'ask permission' from the PMO to speak to the media!

Let this be a lesson to anyone thinking about entering politics. If you expect to get anywhere in federal or provincial politics you must tow the party line or be squashed.

It's a hard lesson, and it exposes an awful paradox of our democratic process. The idea that an individual aspires to public office for the purpose of representing the interests of his constituents is at odds with the reality that party bosses lay down the law and anyone foolish enough to speak on behalf of the people is quickly dispatched.

The fundamental question is do MPs represent the people, or the party? In most cases, I think its the latter.

I have long maintained my desire to serve the people in Ottawa (or at Queen's Park), but the reality is unavoidable: I would be forced to put the priorities of the party above the priorities of the people.

If it's true that Landon stepped aside voluntarily because he couldn't work within the 'confines of partisan politics' then I applaud him for being true to himself and not sacrificing his principles for ambition.

I had thought I was being politically astute when I called no election this fall. I had even patted myself on the back for correctly predicting that the Bloc would end up supporting the Conservatives.

But I was wrong. Here's the real reason there was no election this week, and why there won't be one for the foreseeable future.

I tweeted this Sept. 1st

"Just a guess: Liberals are talking election only because they know Bloc will back the Conservatives. #roft #canpoli"

My record remains unbroken: 4 for 4.

I'm just sayin...

cuz no one else will!

Ignatieff's Gambit

Given the recent polls, if anyone is scratching their heads wondering why Ignatieff suddenly came out several days ago to declare that he will no longer support the Conservative government over EI, the answer is simple... and it has nothing to do with EI.

Maybe I'm pointing out the obvious, but the Liberal Party simply could no longer allow themselves to be forced into supporting the government. After suffering through three years of having the Bloc and the NDP hold a gun to their heads all but daring them to force an election, it's obvious Ignatieff simply decided to turn the tables.

If I was a Liberal strategist, my thinking would be that it was time the NDP and the Bloc ate a little crow, too.

If Ignatieff hadn't withdrawn his support, Layton and the NDP would be thumping their chests with indignation over the government's recent proposals with respect to EI.

Ignatieff's declaration was simply a realigment of the chess board. Nothing more.

As I have said before: no election.

Hudak's debut as Leader of the Opposition

Great coverage on CTV yesterday of Tim Hudak and the PC Party of Ontario holding the government to account


Great coverage on CTV yesterday of Tim Hudak and the PC Party of Ontario holding the government to account

Newmarket-Aurora MP Might Relish Election

Are you looking forward to an election? Neither am I. Good thing there isn't going to be one.

Rex Murphy takes a poignant look at the foot soldier-candidates in today's G&M. I thought of our own MP Lois Brown when I read this passage:

Now a very few candidates, true eccentrics – what the biologists call “sports” – actually enjoy the marathon ordeal of campaigning. These are a set of hyper-extroverts, like the manic Fuller Brush salesmen of days gone by, who live for encounters with other people, regardless of whether the exchange is bitter or friendly, useful or pointless. They just like being out.

Yup, that's Lois.

Elections, Polls, and the Importance of Being Ernest...

I find the daily polls boring. I find politics boring.

Who are we trying to kid? Does anyone really expect the polls to move substantially in any direction? One day their neck and neck, the next, they're edging up 3%, or down 3%. Honestly, the only people benefitting from these polls are the polling companies.

As long as the two parties continue to operate as they have, the results will be the same. Minority. Maybe Liberal, maybe Conservative. At this point, I don't care.

But the whole thing is moot, anyway. There will not be an election this year. Perhaps in the spring, who knows.

But it's in the interest of all parties to play the brinkmanship game, isn't it? As each party releases their fundraising hounds the idea of an impending election can only help fill the war chest. So for now, don't expect any of the parties to make like their going to cooperate with the government. When the donations dry up, they'll be talking softer.

And how about the conservative's sudden interest in fixing EI? Is it really about fixing EI, or disarming the Liberals?

Yes, I'm just an ATM card to be taken out at will and drawn upon. I feel so used.

Is the PM making a statement?

Maybe I've got the PM all wrong. Maybe instead of falling into the same cronyism of his predecessors, Harper wanted to make the most cynical and deliberately patronizing appointments he could make so that people would get mad enough to demand real senate reform. If so, the PM is genius.

If not, well, there's always the Beer Store.