This just in: Wild Bill Morneau, now morphing fast into Robin Hood (think of green tights, a codpiece and fetching pointy hat) has told G20 leaders they should follow Canada’s lead, and tax the rich. More. A lot more. What the Trudeau budgets are doing, he says, is an example to the world.
“We need to better share our success with others, by implementing policies that ensure that the benefits of economic integration benefit the majority of our citizens – the middle class – rather than the wealthiest…. People looked at our plan for more generous and means-tested child benefits, tax increases for the rich and tax cuts for the middle class as a bit of a curiosity. I think we can all agree that curiosity has been satisfied over the last year or so.”
So there ya go. Ottawa, up to its tats in red ink, is clearly planning to sock it to investors, entrepreneurs, seniors with dividend-paying assets and folks dumb enough to earn big incomes, in the budget Wednesday. As stated here, the wild speculation is an increase in the capital gains tax inclusion rate, diddling with dividends, restrictions on small business corporations, changing the treatment for stock options and maybe the beginning of a tax on windfall real estate gains.
Meanwhile the feds have been reviewing all tax credits, to ensure wealthy people are targeted, and has chunked more money to the CRA to harass the 1%ers (who deserve it). The goal is to find another $3 billion from the hides of the wealthy, to supplement the $4 billion that the last budget’s eat-the-rich tax bracket realized. This $7 billion will be coming largely from 286,000 people who earn more than $225,000. Some of them may now be wondering why they bother working hard.
Meanwhile the Trumpster has promised to reduce taxes on individuals and corporations, including small businesses. According to the leaked 2005 tax return, the president of the US paid a 25% tax rate on $150 million. In Canada, he would be vivisected live on CBC.
Did I mention this blog will be relocating to Monterey?
$ $ $
For 18 years the dudes at Teranet-National Bank have plotted house prices in Canada, and this was a surprise. Prices rose in February at an annualized rate of 12%, the biggest February increase on record. Toronto raced ahead almost 23% and Vancouver nearly 17% – suggesting foreign buyers were never the big deal politicians and local suggested. Prices fell in seven other major centres, underscoring the fact Toronto’s out of control.
“It’s especially worrisome,” says National Bank’s econo guy Marc Pinsonneault. “In a city where apartments account for only 26 per cent of home sales, affordability of other types of dwellings has become an acute problem.” This is why – whatever Codpiece Bill does about real estate on Wednesday – Ontario’s Liberal government will probably bring in a foreign buyer’s tax this Spring, since they have no other clue what else to do.
Meanwhile, last month prices (annualized) went down over 22% in Halifax, 14% in Calgary and about 2% in Montreal. If you choose to live in Toronto or Vancouver, you’d better have a damn good reason.
$ $ $
The fact the Deplorables Party lost in Holland this week may not seem significant, but it is. The polls had the anti-immigrant, anti-Islam Freedom Party, headed by Geert Wilder, ahead going into the vote, but the populists were creamed by the moderate People’s Party. The election in a country you probably don’t care about was a big deal, as it was a bridge between the Trump victory in the USA and the possible ascendancy of Marine Le Pen in France next month.
Wilder was bad news for free trade, the EU, globalism and economic expansion. His platform would have banned Muslim immigration, taken the country out of the European Union and adopted protectionist measures. This is the kind of stuff Le Pen overtly or quietly supports, and it was also at the heart of the Brexit vote in Britain last summer.
Whether you think it’s inspirational or destructive, populism will certainly make the world less efficient, more inflationary and expensive. Millions of western voters see it as a remedy to lost jobs and income, while billions of citizens in developing nations have benefited mightily from the freer movement of goods and people.
Trump is the poster boy for this. Within a year or two, he’ll probably symbolize the death of the movement – because it doesn’t work. Border taxes are an anachronism in a world where US corporations make more money globally than they do at home. Tribalism belongs in the history books, not in a modern political party’s agenda. And discrimination based on religion was what the Crusades were all about (and almost every other war).
Most people are smarter than this. But enough are scared and angry to create disruptors like Wilders, Le Pen, Farage and Trump. They’ll be more pissed off when they understand they’re losing. But you can return the rifle now.