Previously, on Wednesday, during 24 heures en 60 minutes, Louis Gill won a debate between economists, pointing out that the budget would terrible for a great majority of the population and wondering why other measures weren't considered, like a tax on capital gains and negative speculative behaviour (ed.note: denounced by Keynes et.al., leading to Tobin et.al.): "In the case of the general distribution of income, those who benefit from a non-exempt or mildly exempt capital gains, and who can in one day cash in on stock options which profit them massively, are still, even today, not taxed on these sources of income."
Now even a business columnist for a right-leaning paper like La Presse is following up, in The Legal Tax Evasion of CEOs, with Michel Girard drawing a parallel between the regressive taxation proposed by Bachand & Charest and the already regressive treatment afforded CEOs when they cash in their stock options, paying the same Fed-Prov 29% combined taxation rate as those earning $20 000, thanks to Bachand-Flaherty. He cites the real-world example among many, five Montreal CEOs who since 2007 have pocketed a fabulous 160 Million Dollars by cashing in their stock options. At the Federal level they qualified for an 80 Million Dollar tax deduction, a 40 Million Dollar tax deduction provincially, with the result that on the income from this stock options, they saved 19 Million Dollars in Federal Taxes and 10 Million Dollars in provincial taxes. He concludes by asking Bachand, Flaherty & all those business types lecturing us on how everyone has to pay their part, how it is they haven't yet proposed eliminating this privileged treatment of stock options? Hmm, I wonder, eh?
Like any social liberal & social-democrat, I am more than happy for a free and open debate on these questions, as the regressive taxation types are always advocating. We'll debate it openly, as Gill did, and see who the public believes and trusts. No cheating, eh, since you regressive taxation types are so convinced of the rightness of your position. And since you're true believers in rational actor theory and the wisdom of markets, political as well as any other, to be coherent, you will be more than happy to abide by the decision of the rational decision-making Canadian public, won't you? You are all democrats, aren't you. right?
PS. QC Budget: Good educational graphs here
PPS. Reality vs Corporate Taxes (Spoiler Alert, Reality Wins):
First, “taxes typically represent up to 14 percent of location-sensitive costs.” Since corporate income tax (CIT) is only one of the taxes paid by business, it alone accounts for an even smaller percentage of costs. Therefore, changes in the CIT rate have very little effect on total business costs.(h/t Accidental Deliberations)
Second, Canada’s effective CIT rate is about 4 percentage points below the next lowest country (Holland) and about 10 percentage points below the other countries examined (see exhibit 5.10 on page 60 of volume I). So, Canada could raise its CIT appreciably and still have a lower CIT than our main competitors.
Third, Canada had the second-lowest costs overall. The current round of federal CIT cuts was introduced in the 2007 Economic Statement. Looking back before that, Canada had also ranked second in the 2006 Competitive Alternatives report (PDF). Apparently, the latest CIT cuts have not affected our overall ranking.
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