Tuesday, February 1, 2011

Corporate Tax Cuts in the Budget = Election

In the past, the harpercons have stated that every vote will be considered a confidence vote. As "Impolitical" infers, this was needless brinkmanship. She also condemns the NDP for cheering these games. She neglects to mention that the reason the harpercons and the NDP played these games was because the Liberals were so hapless, confused, unpopular, timid, etc., that they'd agree to anything or hide in the lobby, to avoid an election. (Whether the NDP was hypocritically taking advantage of the Liberals' cowardice to hide their own is still an open question. I myself thought that Ignatieff's last election gambit was so horrendously ill-timed that it threatened a harper majority, though I think the NDP settled for far too little to allow the government to survive.)

But in their "all partisan politics, all the time" habit, the harpercons are now going to pretend that in the interests of "making Parliament work" they're going to pretend that hardly anything will be a confidence bill. As Impolitical points out, this is just more typical harper dishonesty and crud. Fat stephen gets to pretend that he's a reasonable fellow, trying to avoid an election, but only for propaganda purposes. He implants the notion that he's doing everything possible to avoid an election, but the thing is that the budget's being a confidence motion isn't optional. And it's the budget that is the issue here.

I take this as harper the loathsome toad, who snores through the masses of whatever Christian sect he doesn't believe in, intimating that he's serious about forcing an election on dim-bulb Flaherty's corporate tax-cut budget. By making these empty gestures of accommodation, without addressing the pink elephant in the room that it has been the budget that the government will survive or fall on, harper can only be trying to make Canadians think that it is the opposition parties that are being unreasonable.

It's all about crude manipulation of symbols and language, not about anything genuine. (harper doesn't have a genuine bone in his body!)

But the thing is, the government SHOULD fall if it sticks these idiotic tax cuts into the budget. Dale at Hill Queeries directs us to a StatsCan economist, who (he says) "punches a whole bunch of holes in all the rhetoric on all sides about said corporate tax cuts" although it really only does that to the pro-tax cut argument. The Winnipeg Free Press says:
"A couple of billion dollars (of savings from tax cuts) is a drop in the bucket of corporate income here," Cross said in an interview. "It's trivial."

Canada's natural resources, the price of oil, currency fluctuations and the state of the country's financial markets have been far more influential on corporate investment decisions than recent tax cuts, he says.

"These huge forces were going on — globalization of supply chains, commodity price booms and so on. And somewhere in there you're going to be able to separate out the impact of small changes in the tax rate? You're kidding," Cross said.

followed by:

The larger impact is on the government's bottom line, not the corporate bottom line — even though corporate taxes have now become key in determining whether there will be a spring election.

Indeed, federal Finance Department documents show that the reduction of corporate income tax — from 18 per cent in 2010 to 16.5 per cent in 2011 and then to 15 per cent in 2012 — will be expensive for any government battling a deficit. The cost is about $1.6 billion in foregone revenue in the 2011-2012 fiscal year, $3.9 billion the year after, and a total of more than $10 billion over three years.

In other words, these tax cuts would have a negligible job-creation power and cause significant damage to the government's own finances. That most of the tax cut would go to oil and finance (who need no extra money and who create little in the way of jobs) is another strike against them.

The tea-leaves are pretty clear. harper wants to have an election on this subject. (Why is anyone's guess. Perhaps he's hoping that simply doing their job will discredit the opposition enough in the eyes of voters to give him his majority, or he's just simply gone completely insane.) He wants to bet his political career on this ruinous course and we should call his bluff.

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