Panglossian Notes

How do you put these 2 items together?

As picked up by Joshua Marshall at Talking Points Memo, the New York magazine is reporting that Bush had already indicated that the USA would not sign any new agreement in Montreal on global warming if Clinton spoke today.

Wonder how this ties into Bush being unhappy that PM PM made a statement that seems to have him with his shorts in a knot. Incidentally here's the statement I'm not sure what could be offensive in this. Good speech for a PM at an international meeting.

Technorati Tags: Canada, International Trade, News and Politic, Politics, Stupidity

Quick Note on Arbour's statement yesterday.

I'm a bit bored with our Canadian election. Tomorrow I'll write something about the various comings and goings during the week just to keep the issues straight in my own head.

But one point right now.

CTV has reported that there may have been a leak at Finance or somewhere in Goodale's political offices prior to the news, just before the writ was dropped about, the tax treatment of income trusts.

If there was a leak it likely wouldn't be for sinister reasons - profit making - just sloppiness or stupidity. Again, if true, a sad state for a once very good department. I'm hoping there is nothing to the rumors. I can't imagine a departmental official being responsible. Unfortunately I could a political official. I'm afraid the current crop of political officials in the Martin government show real weaknesses regarding all the small details that are essential for actually being in government. It is a bit like there are all sorts of officer level individuals but no NCOs to look after all the messy but potentially embarrassing details.

Well back to the original point of this post.

Louise Arbour did the right thing yesterday, I think, by issuing a statement on torture. Bolton, of course, got his shorts almost immediately in a knot. Why? Likely because Condi Rice has been making such a hash of things on her trip to Europe over the torture question. And remember Bolton owes Rice his current post. Maybe he thought he was being gallant.

Kofi Annan has issued a statement supporting her, so good for him.

Technorati Tags: Canada, Finance, Politics, Stupidity, Tax Policy

What is Harper's area?

I know it is early days but Steven Harper seems to be showing signs of being just a little too cute. I wonder who is actually advising him behind the scenes.

First it was fast and loose with the "organized crime" sentence. Note he hasn't had the nerve to mouth this outside the HoC where he isn't protected. I just loved John Reynolds' explanation: the ad-scam "was crime and it was organized" - ergo, I guess, organized crime.

Smacks just a little too much of the current and increasing discredited US Republican approach to dealing with issues. Always just a little off but not so much that any jail time is forthcoming.

Next we had the "gay marriage" re-vote. Harper's spin: there would be a free vote in the House after, of course, the House had considered whether it even wanted to deal with a matter that it thought it had finished with.

Oh, and wasn't the last vote on this matter a free vote? The only MPs subject to party discipline were the members of the Liberal cabinet and any of them could have resigned if they felt strongly enough about not voting "yes". One did I think.

So why go through this again. So Harper can appeal to the Canadian wing-nut crowd? Some of this yes, but some to appeal to new immigrant groups more likely.

So again he'll have to pray for a majority because the Bloc won't support him nor likely the NDP. But he gets to pander to the generally unenlightened crowd which some think is the only real base for this party.

Then the "public prosecutor" gambit. When you think of this measure you have to wonder, if Harper makes everything squeaky clean with new accountability legislation this could be a very lonely post.

But the proposal which may assume that Canadians are more familiar with American cache phrases seemed to demonstrate that he didn't know much about Canadian institutions.

Harper promised to appoint a permanent, American-style federal prosecutor with the power to "decide on prosecutions arising from the sponsorship scandal," and clean house in Ottawa.

On the surface, it seems like a bold idea. Unfortunately for Harper, though, Canadian law does not work this way. Under the Constitution, the federal government may write the criminal laws, but it prosecutes only in limited circumstances. That's generally a provincial duty. To a Quebec audience, ever sensitive to perceived Ottawa "power grabs" in areas of provincial jurisdiction, Harper sounded out of touch.

It fell to deputy Conservative leader Peter MacKay to try to bring some coherence to Harper's musings. He noted that a federal prosecutor could deal with violations of the federal Elections Act, the lobbyist act, money laundering, tax evasion, bankruptcy, human trafficking, drug charges and other areas of clear federal jurisdiction. But not the sponsorship scandal. A Quebec court handled fraud charges arising from that case.

The Toronto Star
December 2, 2005

Then yesterday he dropped his GST bomb. Likely again to appeal to the unenlightened crowd. Again he needs to pray for a majority because the Bloc won't support him and neither will the NDP unless of course Harper sweetens the bad measure by not adjusting downward the GST Tax Credit. The Credit goes to low income individuals and is designed to offset some of the regressive nature of the consumption tax.

If he wins and if he doesn't adjust the Credit downwards he multiples the dreadful characteristics of his proposed measure.

As I said yesterday most economist would recommend cuts in income taxes if given the choice of reducing the federal government's tax take. Boy anyone can avoid the GST - don't buy. Avoiding the income tax is another matter and how would reductions in a consumption tax help to boost our productivity.

If one was concerned about Canada's future and not just desperate to get into power one would look sharply at income taxes. I'll wait to hear Harper's justifications to sensible critics of his fiscal proposal but for the time being he doesn't appear to be a public finance economist.

So back to the title of this quick note: What is his area? It's not basic human rights; it's not law; it's not economics.

Guess we'll have to wait.

Sorry today he waded into health care. He made a pronouncement on wait times. What's that about. Isn't this a provincial area. Wonder how the feds will improve wait times. Their only tool is the Canada Health Act. So will he be introducing changes to this Act that say if you don't do as the federal government says regarding wait times then Harper and crew will cut a provinces Canada Health Transfer. Wonder what Quebec would think of that? Wonder what other provinces would also?

So far Harper is trotting out various policy initiatives which in my view seem flawed. I wish he wouldn't do this. He might be able to win just because there seems to be some yearning maybe for a change.

Unfortunately, Harper seems to be sketching out a map for the past and not the future.

Technorati Tags: Canada, News and Politic, Politics, Stupidity

So what is Harper up to?

Harper promises to reduce the GST rate from the current 7% to 5%.

Now why on earth would an economist suggested reducing a government's revenues by lowering a consumption tax.

The reason is, I presume, because there isn't anything out there Harper can think of suggesting on the fiscal side.

Why, because the Liberals have already staked out the right territory and actually announced what they would do in Minister Goodale's fall Economic Update.

The Conservatives are boxed in and can't suggest a sensible fiscal policy. Eventually the endless references to Gomery will even trier most of my fellow voters, they have to do something, right.

Now if Harper is talking about cutting the GST rate and keeping the Liberal proposals on the income tax side then maybe I'd agree with him. But his alternative, no.

Sorry Steven the Conservative's promise is dumb and I think you know that it is from a policy perspective.

Boy if the Conservatives form the government they will need a majority because Gille Duceppe doesn't agree with this approach, at least on the campaign trail, and I doubt the NDP would support it if it came to a vote.

So a very short minority Conservative government if their first piece of legislation is dropping the GST rate.

Hey this could start to be fun an election every 18 months or so, isn't that what they do down South? Sort of,eh!

Why is it dumb policy?

Here read a Fraser Institute comment on the Conservative proposal when it was being talked about just before the writ was dropped.

I've never understood the Canadian attitudes to the GST - I think it was actually anger with the Conservatives under Mulroney - boy even the mainstream media thinks Harper's conservatives suggestion has an element of irony in it. Sorry, I forgot Harper's boys and girls aren't Progressive.

So back to the GST.

We are a small trading country. Our economy, and thus the well being of our unique society, depends on exporting goods and services.

We also like most government expenditures (which are transfers to individuals and to provincial and territorial governments) even though people rant about them. So the federal government needs revenues i.e. taxes.

Some of these revenues come from taxing consumption.

The type of consumption tax the federal government imposes is a "value added tax" (VAT).

We and the Australians call it a Goods & Services Tax - the GST.

The beauty of a VAT/GST is that the amount of tax is identifiable at every stage in the manufacturing process so-to-speak. This means that as we export our goods and services to other countries the VAT/GST is removed from the price.

There was always tax on goods Canadians consumed it was just called something different, before the GST it was called the Manufacturers Sales Tax and, and this is the most important element, it wasn't visible.

Long wandering off.

If a good policy analyst had a choice between reducing income taxes or consumption taxes and was concerned about the future of Canada the latter would not be the option picked.

Technorati Tags: Canada, Economics, Finance, Politics, Stupidity, Tax Policy