Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Wednesday, May 08, 2013

Tax cuts a race to the bottom

The four Maritime provinces are all in deficit, a cumulative $1.1 billion of red ink. Ontario is forecasting a deficit of $11.9 billion. Alberta is projecting a $6 billion shortfall.

Manitoba, the poor sister of the "booming" resource-rich west, with a population of one million, is struggling with a $1 billion bill from its 2011 major flood and is dealing with another flood this year. Despite a one-point increase in its sales tax to eight per cent, it is still projecting a $518 million deficit for 2013-14.

Across Canada, the story is the same. Ever-expanding deficits and -- the real root of the problem, ever-louder demands for more and bigger tax cuts -- are crippling governments and building up ever bigger deficits and debt.

No one should be surprised. In July, 2009, Prime Minister Stephen Harper told /The Globe and Mail/: "You know, there's two schools in economics on this. One is that there are some good taxes and the other is that there are no good taxes. I'm in the latter category. I don't believe that any taxes are good taxes."

"Only libertarian anarchists believe that all taxes are bad, and that society can get along without them," responded /Globe and Mail/ columnist Jeffrey Simpson. "Presumably, there lurks inside the prime minister an anger about much of contemporary society that has been built by taxpayers' money, an anger contained by the political reality that the prime minister can't do much about this state of affairs."

In fact, the Harper government has managed to do a great deal to radically alter the face of Canada in just seven years. It is eliminating as much as possible progressive taxation. And it seems dedicated to reducing the federal role in the lives of Canadians to the Confederation era of 1867 when pensions, medicare, unemployment insurance, universal education, social assistance and social housing simply didn't exist.

This mindset is producing a Canada of race-to-the-bottom temporary and unstable work and declining income; a Canada deliberately made ever leaner and meaner for a growing swath of its citizens; a Canada whose government actively recruits temporary foreign workers to drive down wages and assault collective bargaining rights; a Canada, in other words, that devotes much of its energy to impoverishing its own citizens to feed the greed of its corporate class.

The unraveling of Canada's social safety net started with the OPEC oil price shocks of the mid-1970s. Both Liberal and Progressive Conservative governments eagerly participated in the shredding. First to go were universal family allowances. Over the next two decades, Ottawa diligently pursued its long, slow withdrawal from its original 50-50 cost-sharing agreements with the provinces. In most cases, successive national governments cut funding dramatically leaving the provinces to struggle as best they could according to their own fiscal circumstances.

By the mid-1990s, Ottawa had disentangled itself from any direct participation in setting and running Canada's social safety net. Since 2004, Ottawa has restricted itself to (a much-shrunken) bloc funding of the Canada Health Transfer (CHT) and the Canada Social Transfer (CST).

After 2016, the Harper government will impose a new funding arrangement for Medicare, tying it to economic growth in nominal GDP. According to one estimate, this will cut health-care funding by $21 billion over the next decade. This is a sure-fire prescription for medicare's privatization given the ongoing flood of provincial red ink from coast to coast to coast.

The federal social retreat has put paid to the Prime Minister Lester Pearson's nation-building dream of a single Canadian social and economic citizenship. Provinces are on their own for the welfare of their citizens while Ottawa devotes itself to a full-on pursuit of greater tax cuts for corporations and the wealthy.

Consider all the money stuffed in those tax-free savings accounts safely beyond the reach of the tax man. Also consider the program of boutique tax credits for the middle class, allowing parents to claim as much as $500 for their child's participation in everything from hockey to dance to kung fu classes instead of using the money to pay for universal accessible education for all.

Recently, a document dump exposing the world's tax havens and the super-rich who use them was made public by the CBC. The numbers are staggering -- an estimated $32 trillion in offshore money sequestered in more than 50 lavish billionaires' retreats.

Most of the world's democracies trumpet the ideal of equality and equal opportunity. And yet they have allowed the greed and avarice of the well-heeled to cast an ever-widening stain and doubt on democracy's promise of personal dignity, individual rights and economic and social mobility.

The Canadian Centre for Policy Alternatives reports that Canada in 2010 was closing in on the Canada of 1935, the height of the Great Depression, posting the greatest level of inequality since statistics began being kept. In 1935, the richest one per cent of Canadians held about 18 per cent of all wealth. In 2010, the number is 14 per cent.

And inequality gap is growing -- fast. This year, the richest one per cent of Canadians are each taking home $180,000 more annually today than they did in 1982. But the bottom 90 per cent of Canadians saw income gains of just $1,700 a year, a miniscule 10.6 per cent of the increase enjoyed by their wealthiest fellow citizens.

By 1:18 pm on January 2, 2013, Canada's top 100 CEOs had already pocketed $45,448 -- the amount the average Canadian man earns in a year of full-time work. The average woman's pay is $6,000 lower, at $39,136.

Large cities are posting huge leaps in inequality. In Vancouver, Toronto and Montreal, the bottom 90 per cent are making less today than they did in 1982.

And the gap's growth is picking up speed. In 1995, just 18 years ago, the top 50 CEOs made 85 times the average Canadian's annual income. By 2011, Canada's top 50 CEOs were raking in an average $7,695,625 -- 235 times the average Canadian's pay.

Nor is that $7.7 million annual income all there is for Canada's top 100 CEOs. The icing on their cake was dividends averaging over another million dollars each, pushing the total pay packet of each individual to well above $8 million.

Between 1980 and 2009, the top 20 per cent of the population captured more than half of Canada's income growth. The bottom 20 per cent could claim just one per cent.

Inequality is accelerating -- and with it, the fragility of our democracy.

Original Article
Source: nationalnewswatch.com
Author: Frances Russell

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