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.]

Saturday, October 26, 2013

Who will pay for Harper’s shopper-friendly agenda?

The throne speech is out, and the middle class is in. The Conservatives are courting that demographic with all they’ve got: balanced budget legislation, job grants and free trade deals designed to create employment, “greater tax relief for Canadian families” once the budget is balanced, and a ‘Consumers First’ agenda of reduced roaming fees, pick-and-pay cable, and price parity between identical U.S. and Canadian goods.

This bread-and-butter throne speech is a departure from the government’s last such address, in 2011. It reads more like a budget, with numbers, bullets, and headings similar to those in the government’s 2013 Action Plan.

It steals from the NDP’s “little guy” playbook while targeting the same constitutency as the Liberals, throwing down the gauntlet two years before the next election. “Canadian families make tough choices about how to spend their hard-earned money,” it reads. “Guided by this example, our Government will continue reducing the size and cost of Government to ensure that taxpayers get value for money.”

The Tories’ consumer promises might not actually save people that much money: wireless companies may find other ways to raise money in the face of capped roaming rates, while banks might impose new fees to counteract requirements for “no-cost basic banking services”. But it will be hard for either opposition party to oppose such populist measures. “I want my Netflix!” voters scream — and everyone in Ottawa bows down.

But the real story here is not the impact on consumers — it’s the impact on the federal treasury. Bringing price parity to goods bought here and in the United States, for example, could be achieved only by eliminating tariffs. Ottawa reaps up to $4 billion a year from such arcane and arbitrary levies as a 17 per cent import duty on T-shirts and a 7.5 per cent import duty on umbrellas. Cut the tariffs and revenues fall.

The government may claim that its initiatives — including the EU trade deal, which it projects would create 80,000 jobs — will grow the economy and make up the difference by generating tax revenue down the line. That’s probably true … in the long term. But in the short term (between now and the 2015 election) how will the Conservatives balance the books? How would opposition parties, given that they’d be hard-pressed to reverse these measures once they become law?

Even before the throne speech, the NDP pledged to raise the corporate tax rate to “pre-Tory” levels. On the Conservatives’ watch the federal business tax rate has declined from 22 per cent in 2006 to 15 per cent today. NDP leader Thomas Mulcair has said the NDP nevertheless would keep combined federal and provincial taxes below the combined U.S. federal and state rate of nearly 40 per cent. A 16 per cent hike in the Canadian rate would raise $25 billion a year, as the Tories have not hesitated to point out.

What of the Liberals? Voters still don’t know what their policies are, apart from the fact that Liberal leader Justin Trudeau thinks the middle class are “anxious”, in part because of record levels of household debt. “For wealthier Canadians,” Trudeau wrote recently, “an urgent conclusion must be drawn: If we fail to solve this problem, Canadians’ anxiety will grow, and eventually, they will stop supporting a growth agenda. Consequently, we will all be worse off.”

But solve it how? If the government blows a billion-dollar hole in its budget by ditching tariffs, the middle class will benefit at the cash register — but Ottawa will face a stark choice: increase taxes elsewhere (the NDP solution, which would cripple economic growth) or freeze and/or cut spending and wait for growth to pay dividends (the Tory solution). The Liberal response, as usual, is “Watch this space.”

In other words, the real story of Election 2015 may not be how parties woo the middle class, but who they’re prepared to hit to close the deal. Will they buy their votes at the expense of the rich, the poor or — paradoxically — the middle class itself?

We have two years to find out.

Original Article
Source: ipolitics.ca
Author: Tasha Kheiriddin

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