In defence of the Martin Liberals.
I agree with the Canadian Taxpayers Federation (did I really just say that?). This sounds dismayingly gimmicky:
Every taxpayer in the country will get a cheque from the federal government each year that it posts a larger-than-expected surplus, sources say.
The Liberals' Surplus Allocation Act will promise taxpayers a slice of the surplus along with their income-tax return, federal officials told The Canadian Press.
"Canadians would be getting a dividend on the performance of the economy," said one official.
...One-third of all unexpected surpluses will go to debt relief, one-third to program spending and one-third to taxpayers.
The government has drastically underestimated its surpluses since balancing the budget in 1997-98. In one of the most dramatic examples — 2002-03 — Ottawa estimated a $3-billion surplus that ended up at $9.1-billion. Under the proposed formula, the extra $6.1-billion would have been divided three ways, with $2-billion going to taxpayers.
...A] federal official defended the so-called formula of thirds.
"That equal distribution between debt relief, tax relief and program spending just strikes Canadians as a reasonable thing to do," he said.
"This legislation reflects the wishes of Canadians."
Good God. Have they focus-grouped this or something? Of course, unless there's some interesting caveats in the legislation that make it non-bullshit...it's bullshit. The governing party can basically just avoid any unwanted commitment to make tax-refunds by high-balling the expected surplus (though, of course, that opens them up to demands for spending from the left). Even better, it can also low-ball the expected surplus in the summers before elections, or any year the population is mad at the incumbants and looking to be cheered up by a little tax refund. The bill makes perfect sense for the party of permanent incumbants. This is the perfect Liberal bill, in all its bullshit.
Which is to say that Timmy the G is absolutely right -- well except for the voting thing, but he's just more of a lefty than me. He's perfectly right to sneer. Yes, Paul Martin suffers by having his Liberals put forth crap legislation like this. It makes his government look petty and desperate rather than like the hard-boiled, good-government centrists I believe them to be. But here's the thing: I don't care. I don't care because I believe.
Before reading the Globe tonight about the Using the Surplus as a Political Football Act, I was planning to do a mushy post justifying my existence as possibly the only Canadian blogger who actually likes Paul Martin...I mean with something approaching enthusiasm. (If somebody knows of another such blogger, please direct me thither). I was going to write about how the Martin Liberals always (well, usually) do the right thing in the end, despite the (correct) wailing from Rex Murphy and the rest of them that Martin never shows any "leadership". I was going to say that Martin shows enough "leadership" for me. Looking south, I'd say too much "leadership" can, in fact, be a very bad thing.
Then I read about new Taxpayer Bullshit Bill and briefly considered just writing a post complaining about that. Then I reconsidered and decided to make the mushy post anyway. In a way, it's perfect. The Buy 'Em With Cheques Act just drives my meta-point home, by virtue of the fact that it's bullshit. Well, by virtue of the fact that it's harmless bullshit.
On the other hand, some less benign bullshit got kicked downfield today when the Liberals ditched the long-promised corporate tax cuts. And, sure enough, they did it with as little "leadership" as possible:
Confirmation of the government's decision not to proceed with the legislation followed Mr. Martin's ambiguous response when asked about the government's plans for tax legislation after his speech in Charlottetown.
"The tax cuts come in the year 2008, so we'll introduce them obviously in time to make sure that they take place at that time," Mr. Martin told reporters. "But what that time will be I think will be up to the Minister of Finance to decide. The commitment is 2008."
Translation: "Just wait til I get a majority and can screw over Layton", Martin told the lobbyists. Yes, yes, I know. But I have a feeling -- I believe -- that Martin is not, in fact, bullshitting the national interest but, rather, the corporate lobby. I believe that, in the end, Martin's deep, decades-long commitment to debt reduction will trump all else. Those tax cuts will just keep getting pushed further and further away into the future, blamed on the need to satisfy partners in coalition governments, or on surplus projections coming up short (which, come to think of it, also solves the mailing-out-rebates problem). And like with most issues, the Martin Liberals will end up doing exactly what I want them to do.
The whole issue of punting the tax cuts brings back the summer of '05, very exiting by Canadian political standards. In my opinion, the trade the Liberals made with the NDP -- the spending in return for the corporate tax cuts and election -- was a very good thing, getting federal spending back up to 12% of GDP where it should be. And no, the deal, with all its happy consequences, involved no evident "leadership" whatsoever on Martin's part, as he flipflopped around and rescheduled votes and made backroom deals (though it did have the rather large advantage of making Harper and Duceppe jointly fly off the handle). And yet, here we are.
In a parallel universe, Paul Martin bravely decrees that, as of now, Canada's budget is too tight for $13 billion more in tax cuts, and who knows what it will look like and how much additional money post-Chaoulli Medicare is going to need in 2008? Business leaders need to rethink their gameplans, how to adapt to the neoliberal reality, and remember the advantages Canada gives them by not forcing them to cover their employees' basic health insurance. At this point, it's unlikely that Canada's industrial competitiveness and productivity stagnation can be fixed by cutting the corporate tax rate from 21% to 19% over three years -- especially given how much that same rate has fallen since the 90s with no corresponding productivity bump. The government can only do so much for business before it hurts "the people". It's time to jump off the OECD race-to-the-corporate-tax-rate bottom. It's time to stop trying to pretend we can compete with the US on this issue -- or that we want to. Since 2000, the US has seen corporate tax revenues as a percentage of GDP fall 40% to an incredibly low 1.5% -- and their federal deficits go through the roof. And that was after more than 50% of corporations paid no income tax at all during the second Clinton Adminstration. And, as everyone knows, the rates themselves have nothing to do with it. The US basic corporate tax rate is much higher than the Canadian one. The problem is their exemption and decuction regime. And the bigger problem is the lobbyist political culture created to fight for and in some cases flat-out buy those exemptions. Post-Sponsorship, is that something want to emulate?
These are the sorts of words we'll never hear from Mr. Martin. And yet, somewhere, deep in his politician's soul, I believe that he understands all this. I believe. Afterall, Martin reads Paul Krugman! Can anyone who enjoys Paul Krugman be all wet on these issues?
And that's not all, not even for this week. According to John Ibbitson yesterday, the Liberals are also going to do the right thing -- for all the reasons Ibbitson gives -- regarding (not) implementing tarriffs on Chinese bicycles, despite the fact that "the two factories where the bikes are built are located in Quebec ridings: One is held by a Liberal, and the other the Liberals would very much like to win."
Again, bold, decisive "leadership" is in short supply among the Martinites as they bumble their way toward the substantively right decesion, with their eyes firmly on the polls:
There is word that senior officials have been ordered to bring forward alternatives that would help the domestic industry without penalizing imports. Something face-saving may be cobbled together, for electoral purposes. (We can only hope it involves retraining for the workers.) But anything that would offend the Chinese or delight the Americans will not be brought to cabinet, which in any case is unlikely to consider the matter before next month at the earliest. If an acceptable alternative can't be found, the matter could be put off until after the spring election.
At which point all pandering is probably off the table. So there: once again, my Party, my Prime Minister and his cabinet, are getting it right, however gracelessly, acting like the leaders of a Small Open Economy should. It's the Martin Way: mumble incoherently, get testy with the press, refuse comment on senstive issues and then, in the end, commit to the right policy.
Frankly, I'll take it. As a dual citizen, I've spent my politically aware life to date rooting for -- hell, enthusing over! -- hapless centrists. The difference is that in Canada, the hapless centrist actually wins. How can I not love Paul Martin? He's confirmation of all that I hold dear in politics, the keeper of the sputtering flame. He's the uncharasmatic neoliberal who suceeded where Al Gore and John Kerry failed. That's why, next February, so long as he keeps it up and doesn't commit to any truly awful policies, I'll be out there banging on doors for him (and for my awesome MP, Stephen Owen). It's why I believe.
Every taxpayer in the country will get a cheque from the federal government each year that it posts a larger-than-expected surplus, sources say.
The Liberals' Surplus Allocation Act will promise taxpayers a slice of the surplus along with their income-tax return, federal officials told The Canadian Press.
"Canadians would be getting a dividend on the performance of the economy," said one official.
...One-third of all unexpected surpluses will go to debt relief, one-third to program spending and one-third to taxpayers.
The government has drastically underestimated its surpluses since balancing the budget in 1997-98. In one of the most dramatic examples — 2002-03 — Ottawa estimated a $3-billion surplus that ended up at $9.1-billion. Under the proposed formula, the extra $6.1-billion would have been divided three ways, with $2-billion going to taxpayers.
...A] federal official defended the so-called formula of thirds.
"That equal distribution between debt relief, tax relief and program spending just strikes Canadians as a reasonable thing to do," he said.
"This legislation reflects the wishes of Canadians."
Good God. Have they focus-grouped this or something? Of course, unless there's some interesting caveats in the legislation that make it non-bullshit...it's bullshit. The governing party can basically just avoid any unwanted commitment to make tax-refunds by high-balling the expected surplus (though, of course, that opens them up to demands for spending from the left). Even better, it can also low-ball the expected surplus in the summers before elections, or any year the population is mad at the incumbants and looking to be cheered up by a little tax refund. The bill makes perfect sense for the party of permanent incumbants. This is the perfect Liberal bill, in all its bullshit.
Which is to say that Timmy the G is absolutely right -- well except for the voting thing, but he's just more of a lefty than me. He's perfectly right to sneer. Yes, Paul Martin suffers by having his Liberals put forth crap legislation like this. It makes his government look petty and desperate rather than like the hard-boiled, good-government centrists I believe them to be. But here's the thing: I don't care. I don't care because I believe.
Before reading the Globe tonight about the Using the Surplus as a Political Football Act, I was planning to do a mushy post justifying my existence as possibly the only Canadian blogger who actually likes Paul Martin...I mean with something approaching enthusiasm. (If somebody knows of another such blogger, please direct me thither). I was going to write about how the Martin Liberals always (well, usually) do the right thing in the end, despite the (correct) wailing from Rex Murphy and the rest of them that Martin never shows any "leadership". I was going to say that Martin shows enough "leadership" for me. Looking south, I'd say too much "leadership" can, in fact, be a very bad thing.
Then I read about new Taxpayer Bullshit Bill and briefly considered just writing a post complaining about that. Then I reconsidered and decided to make the mushy post anyway. In a way, it's perfect. The Buy 'Em With Cheques Act just drives my meta-point home, by virtue of the fact that it's bullshit. Well, by virtue of the fact that it's harmless bullshit.
On the other hand, some less benign bullshit got kicked downfield today when the Liberals ditched the long-promised corporate tax cuts. And, sure enough, they did it with as little "leadership" as possible:
Confirmation of the government's decision not to proceed with the legislation followed Mr. Martin's ambiguous response when asked about the government's plans for tax legislation after his speech in Charlottetown.
"The tax cuts come in the year 2008, so we'll introduce them obviously in time to make sure that they take place at that time," Mr. Martin told reporters. "But what that time will be I think will be up to the Minister of Finance to decide. The commitment is 2008."
Translation: "Just wait til I get a majority and can screw over Layton", Martin told the lobbyists. Yes, yes, I know. But I have a feeling -- I believe -- that Martin is not, in fact, bullshitting the national interest but, rather, the corporate lobby. I believe that, in the end, Martin's deep, decades-long commitment to debt reduction will trump all else. Those tax cuts will just keep getting pushed further and further away into the future, blamed on the need to satisfy partners in coalition governments, or on surplus projections coming up short (which, come to think of it, also solves the mailing-out-rebates problem). And like with most issues, the Martin Liberals will end up doing exactly what I want them to do.
The whole issue of punting the tax cuts brings back the summer of '05, very exiting by Canadian political standards. In my opinion, the trade the Liberals made with the NDP -- the spending in return for the corporate tax cuts and election -- was a very good thing, getting federal spending back up to 12% of GDP where it should be. And no, the deal, with all its happy consequences, involved no evident "leadership" whatsoever on Martin's part, as he flipflopped around and rescheduled votes and made backroom deals (though it did have the rather large advantage of making Harper and Duceppe jointly fly off the handle). And yet, here we are.
In a parallel universe, Paul Martin bravely decrees that, as of now, Canada's budget is too tight for $13 billion more in tax cuts, and who knows what it will look like and how much additional money post-Chaoulli Medicare is going to need in 2008? Business leaders need to rethink their gameplans, how to adapt to the neoliberal reality, and remember the advantages Canada gives them by not forcing them to cover their employees' basic health insurance. At this point, it's unlikely that Canada's industrial competitiveness and productivity stagnation can be fixed by cutting the corporate tax rate from 21% to 19% over three years -- especially given how much that same rate has fallen since the 90s with no corresponding productivity bump. The government can only do so much for business before it hurts "the people". It's time to jump off the OECD race-to-the-corporate-tax-rate bottom. It's time to stop trying to pretend we can compete with the US on this issue -- or that we want to. Since 2000, the US has seen corporate tax revenues as a percentage of GDP fall 40% to an incredibly low 1.5% -- and their federal deficits go through the roof. And that was after more than 50% of corporations paid no income tax at all during the second Clinton Adminstration. And, as everyone knows, the rates themselves have nothing to do with it. The US basic corporate tax rate is much higher than the Canadian one. The problem is their exemption and decuction regime. And the bigger problem is the lobbyist political culture created to fight for and in some cases flat-out buy those exemptions. Post-Sponsorship, is that something want to emulate?
These are the sorts of words we'll never hear from Mr. Martin. And yet, somewhere, deep in his politician's soul, I believe that he understands all this. I believe. Afterall, Martin reads Paul Krugman! Can anyone who enjoys Paul Krugman be all wet on these issues?
And that's not all, not even for this week. According to John Ibbitson yesterday, the Liberals are also going to do the right thing -- for all the reasons Ibbitson gives -- regarding (not) implementing tarriffs on Chinese bicycles, despite the fact that "the two factories where the bikes are built are located in Quebec ridings: One is held by a Liberal, and the other the Liberals would very much like to win."
Again, bold, decisive "leadership" is in short supply among the Martinites as they bumble their way toward the substantively right decesion, with their eyes firmly on the polls:
There is word that senior officials have been ordered to bring forward alternatives that would help the domestic industry without penalizing imports. Something face-saving may be cobbled together, for electoral purposes. (We can only hope it involves retraining for the workers.) But anything that would offend the Chinese or delight the Americans will not be brought to cabinet, which in any case is unlikely to consider the matter before next month at the earliest. If an acceptable alternative can't be found, the matter could be put off until after the spring election.
At which point all pandering is probably off the table. So there: once again, my Party, my Prime Minister and his cabinet, are getting it right, however gracelessly, acting like the leaders of a Small Open Economy should. It's the Martin Way: mumble incoherently, get testy with the press, refuse comment on senstive issues and then, in the end, commit to the right policy.
Frankly, I'll take it. As a dual citizen, I've spent my politically aware life to date rooting for -- hell, enthusing over! -- hapless centrists. The difference is that in Canada, the hapless centrist actually wins. How can I not love Paul Martin? He's confirmation of all that I hold dear in politics, the keeper of the sputtering flame. He's the uncharasmatic neoliberal who suceeded where Al Gore and John Kerry failed. That's why, next February, so long as he keeps it up and doesn't commit to any truly awful policies, I'll be out there banging on doors for him (and for my awesome MP, Stephen Owen). It's why I believe.
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