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Idea alert


 

Michael Bliss says tax the richest.

Suppose we adjust for inflation and create new tax brackets in which our marginal rates are substantially more than the current 50 per cent. Why not levy a 60-per-cent tax on income after anyone’s first million, and 90 per cent on everything more than $2-million? There would be serious avoidance problems, to be sure, but governments are gradually becoming ruthless at closing loopholes.

In Canada, for example, it might be good tax and social policy simply to abolish entertainment as an allowable business expense. Or we might consider making the income-tax returns of everyone in the highest brackets public documents. While we’re at it, we might also revisit the possibility of levying significant death or succession duties to limit the accumulation of unearned fortunes.


 

Idea alert

  1. I fear that would require a Mossad-style assassination squad to assassinate tax refugees. On the other hand, you could probably pay for such an outfit quite handily with the increased revenues.

    • Ah yes the fine distinction between hard and soft domestic policies.

    • Or pay hackers to get their banking information.

  2. It really doesn’t make a whole lot of sense to tax that punitively. Remember folks: income isn’t a bad thing. I’d rather tax consumption, and give transfers to the poor.

    • except that creates an incentive to hoard or spend elsewhere AnPoC…. I am not sure that is a lot better

    • Well, that's rubbish when we look at who we'd be taxing. I am all for taxing employees making more than 1 million bucks per annum because, hell, what *employee* is worth that much when the President of the United States (still, I believe the most powerful person on the planet) makes about half that? CEOs of large corporations say its all about what the other guy gets and competitive yadda yadda, but obviously they aren't doing any such thing as per the example I've just given.

      Now if we're talking about any kind of income, yes, I have a problem with it. But if it's money in box 14 on a T4 slip, I say tax it at 70 or 80% above 1 million. My boss (a staunch Conservative) goes me one better and says tax it at 100% above the million because they are only ripping off the shareholders. And that way they'll stop.

  3. Why make money at all, if the more we make, the more they'll take away? This is just such a 'bass-ackward' idea – tax the rich more just because they have more – how is that going to help foster ambition? Or are we to the point now where 'ambition' is a dirty word?

  4. Why make money at all, if the more we make, the more they'll take away? This is just such a 'bass-ackward' idea – tax the rich more just because they have more – how is that going to help foster ambition? Or are we to the point now where 'ambition' is a dirty word?

    • I think you're channeling Ronald Reagan, the man who long ago put the pieces in place for last year's meltdown.

    • I am surprised this is getting any attention. Think about it for 30 seconds. The moment this tax went into effect, every successful entrepreneur in the country would leave. Mike Lazaridis at RIM? Gone. Dani Reiss at Canada Goose? Gone. The Desmarais family? Gone.

      Tax consumption. Don't chase the entire entrepreneurial class out of the country.

      • This is a pretty flawed analysis.

        • You must have thought about it for more than thirty seconds. That's cheating.

      • Yes, because they're all only here for the tax advantages.

        The problem with doing this isn't that it'd chase entrepreneurs out, but that it simply wouldn't work. Clamping down on loopholes does nothing when the fundamental structure of corporations is that taxation is done on the net, not the gross.

      • Maybe we would be better off without them.

        • Yes. Just as parasites are better off without the host.

      • The Bronfman family … gone to Barbados.

        Oh wait, they went there anyway and without paying the taxes on their family trust. I guess you can't bend over far enough for some people …

        • Alrighty then. How many more capital-intense families fleeing this country would make you happy?

      • If you tax employment income only at this high rate, the entrepreneurial class has nothing to worry about. After all, if you own the company, your dividends, interest income, and all the rest would be safe from it. Sure, you might lose a good CEO or two (but not all of them since there are a limited number of jobs making 1 million plus/year worldwide) but I can't say I've been overly wowed by any of these great, fabulous, insightful fellows in recent memory. Most of them would come to accept that $999,000/year is a hell of a good wage.

  5. One way to tax the rich would be to raise the taxes on executive stock options. Currently, many wealthy executives like TD's W. Edmund Clark get most of their income from executive stock options, so he only pays 23% tax on most of his income (capital gains rate) instead of 46%.

    • The tax policy idea being, of course as you know, that the corporation has already paid tax on that money and does not get a deduction for the payment the way it would with a salary payment. But I'm sure you just omitted that for the sake of brevity.

      • In what sense has the corporation "already paid tax on that money"? I'm pretty sure that you're confused about something here.

        • Not confused; just rushed: I skipped one step. I was referring to the dividends he gets on the shares, which are after tax.

          But there is tax on the stock options too. They are treated as an employment benefit. As for the 23% tax from vs 46%, that is a bit misleading. When he sells the shares, he will be taxed on them as a capital gain in all likelihood (as they are stock options, depending on the circumstances of the sale, the proceeds of sale could be recaptured as income), but he does still have to buy the shares with his own money (after tax money) and he only gets the value of the growth.

          Stock options are given for their good benefit, but they are also given for a bunch of other reasons. Could you imagine a bank with a CEO who didn't own shares in his own bank?

          • Not confused; just rushed: I skipped one step. I was referring to the dividends he gets on the shares, which are after tax.

            Nope, you're confused. Dividends are irrelevant to any discussion of the tax treatment of employee stock options.

            But there is tax on the stock options too. They are treated as an employment benefit.

            The capital gains tax is paid by the employee. The employer does not pay taxes on stock options, if that's what you're suggesting. However, unlike other forms of compensation, the value of the stock options can't be expensed on the employer's income statement, so the employer doesn't get tax deductions.

            Obviously there are benefits to executive stock options, because it aligns the interests of executives with those of shareholders. This doesn't mean that the value received by the employee shouldn't be taxed as regular income, like the Americans do.

            You were completely wrong about the "tax policy idea" in your original comment, as of course you know. But I'm sure you won't admit that for the sake of brevity.

          • So regular dividends derived from the stocks obtained from stock options are irrelevant to the benefit received from stock options. I see. I don't see many executives giving up these non-beneficial dividends, but you must know.

            If you sell your shares within a certain number of years of obtaining them by way of a stock option, then there is a recapture as income at the full rate and much of the capital gain benefit is lost.

            The American taxation of stock options is much more complicated. I do not profess to know how it works though. If they pay taxes as income, do they pay no taxes when they sell the shares?

          • So regular dividends derived from the stocks obtained from stock options are irrelevant to the benefit received from stock options.

            Now you're just being obtuse. Taxation of dividends is a completely separate issue, and it has nothing to do with how the shares were acquired.

            In the US, 100 percent of the difference between the amount payable by the employee to gain the shares as ordinary income and the fair market value of non-qualified stock options shares on the date of exercise, comes under taxation.

          • Weird – I posted a longer response, but it disappeared. Anyway, taxation of dividends is obviously a separate issue, and it has nothing to do with how the shares were acquired.

            FYI: http://en.wikipedia.org/wiki/Non-qualified_stock_

          • Don't know what happened to your comment, but it did come through on my email alerts, including the insult. Not like you. Tough day yesterday at work or something? I'm done with this thread. Until next time, cheers.

          • Sorry, Ted. We both know you're much sharper than a 90-degree angle ;-). Tough day, and I was a bit miffed by the misguided quip in your original comment ("I'm sure you just omitted that for the sake of brevity"). No more angle references, I promise!

  6. Establish a minimum living wage, and don't tax that. Set a flat tax rate for every penny above and beyond. We need to stop using our tax system as an instrument of social engineering and quasi-morality.

    I don't know enough about what counts as entertainment deductions, and how diffiicult that would be to police, but I've certainly witnessed a lot of abuse/fraud on that front.

    • I thought flat tax regimes did away with most deductions as well. It seems a lot depends on what you consider a minimum living wage and who pays it – are you talking about a negative income tax where the government will top up your earned income to an established minimum?

      • No, I'm not advocating a guaranteed minimum income tied to the tax system. I'd certainly be in favour of some harmonization of programs (welfare, EI, etc…) against a decent baseline of survival, but I expect there's far too many layers of federal, provincial and municipal programs to ever effectively see such a scheme.

        Setting a minimum living wage wouldn't be easy, I know. But I expect it would be the least of obstacles in realizing a flat tax (i.e., I doubt we'll ever see it.)

        • That would be a very regressive system – no tax on earnings up to the level of EI (which is capped at something like $400/week for less than a year, i.e. $20,000) then everyone pays the same proportion of income in tax.

          • It seems more fair than regressive to me, but I think we're getting into philopshical differences.

      • I wish it were so, but nope.

        The only part that is simpler is the calculation of tax on taxable income. The calculations to get to taxable income are basically the same, and there are still the tax credits to calculate as well.

    • Interestingly enough, one of the reasons Forbes originally proposed a flat tax was because he noticed the actual amount of income tax paid by every tax bracket tended to hover about the same amount.

      And it would seem that better policiing rather than disallowance would be a more effective track for food and entertainment expenses (currently most are allowed at 50% only, partly to acknowledge the rampant abuse that takes place).

    • This is an idea I've heard thrown about before, with some merit, but I see just a few too many issues that I can't resolve.

      – It's still a progressive tax system, just a simpler, more binary one.

      – Deductions matter more than you might think. I'm thinking things like the home reno tax credit, credits for single parents, etc.

      – The marginal tax rate on the middle class would shoot up, especially for those towards the lower end of the spectrum above that living wage line. These are the people who are having to make real choices between making more money and other concerns, like raising children, taking care of elderly parents or pursuing other activities. Do we really want to increase the disincentive to make that next dollar?

      – Trickle-down economics simply doesn't work. While I understand and respect the moral reasons for your suggestion, from what I can tell it would have the effect of increasing the effective wealth of the lower class and the upper class. I'm all for raising the bottom, but doing that while increasing the wealth of the high-earners means the money can only come from the middle class, especially the upper-middle class. These aren't the true wealthy elite, these are the small business owners, the doctors, the professors, the pharmacists, engineers, the professionals that may not own or run the big corporations, but often make them work. This is the point that really sticks for me, because your system still punishes successful individuals, just a different type of successful individuals.

    • "We need to stop using our tax system as an instrument of social engineering and quasi-morality."

      That is exactly right. It's dangerous, arrogant, and a complete misuse of taxation in a free society.

  7. I am surprised this is getting any attention. Think about it for 30 seconds. The moment this tax went into effect, every successful entrepreneur in the country would leave. Mike Lazaridis at RIM? Gone. Dani Reiss at Canada Goose? Gone. The Desmarais? Gone.

    Tax consumption. Don't chase the entire entrepreneurial class out of the country.

  8. It's Michael Bliss …. ya know he really means it !

  9. Having a flat tax would likely reduce Canada's tax revenue. The rich would end up paying less taxes, so chances are the middle class would have to pay more in taxes to make up for the loss in tax revenue from the wealthiest 10%.

    • I'm lacking in objective data here, and I'd be interested to know if there are any stats on how much tax is ultimately paid by the varioius income strata *after* deductions and other manipulations.

      My sense has always been that the stated tax rate on the 'rich' doesn't ultimately reflect what the treasury collects from them when all is said and done.

      I'm not fully comfortable with demonizing the rich (you aren't here, but these conversations can take on that flavour), and what I like about a flat tax system is its recognization that affluence can be measured as anything beyond a decent living wage, and doesn't treat the 'middle class' as only slightly beyond serfdom.

      • Alberta became the first jurisdiction in North America to implement a flat tax, back in 2000. Some have made credible arguments that Alberta's deficit would be much lower today if the province had a progressive income tax structure.

        • They could have set the rate higher, kept the sales tax, and/or controlled spending too, but I take your point.

          • Alberta does not have a provincial sales tax. Never has had one, that I can recall.

      • Except that such a scheme places more of a burden on the poorest.

        Consider. Someone who makes 18K per year.
        Government says 15K is living expenses.
        They tax him 25% on the remainder, or 1000.
        He has 3000 to live with beyond whatever "living"expenses.

        Someone who makes 200K per year.
        15K is living expenses
        25% on 185k is 46250

        So who notices the money the government takes more? The guy who paid 46250 but still has over 138,000 after living expenses, or the guy who paid $1000 and has only $3,000 left?

        Who notices more if the roof suddenly needs a repair? The fact is that the guy who makes 200K can simply afford a lot more tax before it causes any significant suffering.

        To me, the ideal taxation system is one that causes the least amount of suffering. A flat tax doesn't provide this at all.

        • Just to be clear, I'd set the minimum much higher. But you're arguing for a much more communist sensibility than I ever would. Yes, life is harder for those who earn close to the minimum. I'm not sure that should be license to take proportionately more from the affluent.

          • Meh, the numbers don't matter, as the result is the same. On a flat tax system, the guy at the bottom end of the scale is much more closer to true hardship than the guy at the top end. And since there's always going to be a *lot* more guys at the bottom end then it makes some sense to lessen their tax burden and as such their risk of hardship if we're able to do so without significantly increasing the risk of hardship the few people at the top end feel.

          • C'mon – the numbers do matter. Hardship can become awfully relative if we're not careful.

          • Well, I suppose that's fair, but when you say "minimum living expenses" it doesn't conjure up images of being able to live decently and have extra money left over to deal with unexpected problems. If your "minimum living expense" is high enough that threat of uncontrollable hardship isn't a problem (and I'm ignoring the problem of how do we set what that minimum is given the vastly different annual living costs across the country) then I suppose it might work.

            Of course, if we're talking high numbers like that, we're also probably talking very high rates of taxation on those who earn more.

          • Regional variability would be an obstacle, to be sure. I'm not convinced that we'd have to levy 'very high rates' (but I really need to roll up my sleeves and research this more), but you're right about the ability to 'hide' behind a business for some. I suppose suggestions to tax on gross instead of net might take care of that, but such a scheme would be too punitive for certain sectors (high volume, low margin enterprises). And those who want to, or are able to, play such games already are: most folks I know are looking to dodge every penny of tax they can.

            I don't know if many would share my sentiment, but I'd gladly live in a system where the first 35,000 was tax free, with a fairly steep (but flat) rate thereafter. Particularly if we did away with all the deductions, the result (I think) would be a tax system less steeped in mystery, and somewhat more 'legitimate' in the eyes of many.

            (Just in case I'm coming off as anti-tax – I'm most certainly not. I never view them as "lost" money for my family, in light of the collective benefits they enable)

          • Using the numbers from below suggests that if we just stopped collecting income taxes from the 50% of taxfilers who had incomes under $23K AND from the bottom 1/4 (ie up to incomes of about $35K) of the middle group the total tax take would drop by about 10%.

            So, to regain that tax revenue the other 3/4 of the middle group and the high end group would need to increase their 'contribution' by a factor of about 1.15 or so.

            The numbers are rough, but they should give you some idea of the magnitude of the impact of the changes that you threw out there for discussion.

          • Spread evenly and transparently, I'd like such a system better.

      • From a previous post….I found some 2002 info that gives these figures:

        – 50% of taxfilers had incomes of $23,000 or less, and they contributed just under 5% of total revenue,
        – 10% of taxfilers had incomes of $64,500 or more, and they contributed just over 52% of total revenue, and
        – the remaining 40% of taxfilers contributed the remaining 43% of the total revenue.

        Those numbers perhaps aren't quite in the format you were thinknig about, but it's a start.

    • To first order it would, yes. But if the lower taxes on the rich gets reflected in more investment, much of that investment is turned into new startups, which in turn leads to both more jobs and higher corporate tax revenue.

      So the question is whether the second-order effects from increased investment outweigh the first-order effects from reduced taxation on the wealthy.

      • Then give tax credits for investment and startups. Revenue stays up, and there's even MORE incentive to do these things!

        • That's reasonable, and amounts to almost the same thing. The downside is that it's more complicated – which makes it (a) more expensive in terms of bureaucracy, and (b) more prone to loopholes and abuse: "Sure my home movie studio is an investment…I'm starting up a one-man entertainment company!" To combat this you need more bureaucracy, more legislation, more complexity, which leads to additional loopholes, etc. Complexity inherently adds cost.

      • That's an argument for reducing corporate taxes – of which I am fully supportive.

    • It's not that hard to come up with a single tax rate that would still bring in the same amount of revenue as the current progressive system does.

      Of course, there are likely to be other consequences that would need to be considered, although I suspect these other consequences would not be as dramatic as opponents might claim.

  10. I think the real question is what has this guy done with the real Michael Bliss?

  11. Looking at Bliss's biography on Wikipedia he seem like a classic Trudeau centralized and control Liberal Party of Toronto type. Just like Michael Ignatieff

    • I was wondering who would be the first to accuse him of being nothing more than a Liberal shill.

      Took a while though. PMO must be too distracted putting the final touches to their "re-calibration".

      • Actually he was a Conservative hacket man beating up on the proposed coallition with the unholy through repeated articles in the (gasp) National Post.

        • Wait… he is an NDP idol quoted at length by Layton!

  12. I think the easiest thing to do is to add one more tax bracket a few percentage higher, and then freeze it (at say $200,000). If the tax on all income over $200,000 was 33%, that is not outrageously high. And as it is frozen there, bracket creep draws in more and more people.

    • We're already there – the top marginal tax rate in Ontario is a staggering 46% that kicks in at $126K

  13. Holly's right – Alberta has never had a PST and probably never will.

  14. "Paging Harold Wilson, paging Harold Wilson"….and the Conservatives are accused of a hidden agenda?

    It frightens me for my country, my freedom and my children's future that any publication could possibly print non-sense like this and that worse fellow countymen could endorse it. What part of totalitarian dictatorship are supporters of this kind of economic claptrap most comfortable with? Maybe, like O'Malley, Aaron is gunning for the roses at CBC….

  15. Ya learn something every day! If could edit, I'd go change "kept" to "enacted". :)

    • I knew you meant enacted…

  16. You're either going to have a fairly complex income tax system or everyone with an accountant pays essentially no tax. We can do fair and mostly effective, but "simple" would be a disaster.

    • How so? A flat tax is pretty hard to get around, accountant or no accountant.
      It's the system of taxes counterbalanced by tax credits that leads to abuse.

      • The flat rate is pretty irrelevant for tax purposes, it's the getting rid of all the other rules in the flat rate system that guts the tax base.

        The simplest method is that if it weren't for the income tax laws, everyone would become a business, have their expenses be business deductions, and invest everything else in capital property whose value is unlikely to change. It's legitimate accounting work, it just isn't allowed under the income tax act.

        • Heck, even simpler: my boss takes over payments on my mortgage, my house is held in trust to me until it's paid for or I quit. Deduction for his business, no income for me. (Taxable benefit under the current tax rules, but they go out the window under "flat tax' proposals).

          • I'm thinking that all deductions would be eliminated, so the first scenario you raised wouldn't apply. I see your point about the mortgage though – clearly you've thought this through more than I have.

  17. Speaking of taxes, this isn't a proposal to increase revenues, but I like the guaranteed income/negative income tax currently being promoted by Senator Hugh Segal. Would eliminate the bizarre disincentive to earn more income that every social assistance bureacucracy in Canada is fixated on, and it would save massive amounts of $ in duplicated adminstration, too much of which is spent on routine humiliation of recipients in the unfounded belief that if we make it hard for everyone to get the money that will prevent welfare fraud,

    http://tiny.cc/xsIIZ to see his motion/speech.

  18. It amazes me to no end that in our age of Protectionism, when every dwindling species that cannot muster enough erections to reproduce at replacement rate, has a lobby group, a subsidy, and a celebrity-soaked benefit concert, that there is not even a single whimper of support for the most endangered of our endangered species: the entrepreneur.

    Alas, they are hunted by our screaming savages and pelted with slanders, calumnies, and admonishments.

    "How dare they make profits by selling us quality goods we want at prices we can afford?! – They must be punished!"

    And now that our Potemkin village economy is beginning to reveal the void behind its curtains, voices among the masses are demanding that more money be taken from the producers and given to the consumers, so that the consumers can consume more and more of what the producers produce.

    To put it simply, the consumers are demanding that the producers take a greater and greater loss on every transaction, so that the consumers can continue to consume… at the increasing expense of the producers. In this inversion of all that is right and just, it is being claimed that one's right to consume is a function of his inability to produce. This is to say that he who produces all, deserves none; and that he who produces none, deserves all.

    This is bad economics. And even worse morality.

    • So, are you saying that Entrepreneurs can't get it up? and that society should rely on trickle-down?

      • I think the Olympic opening ceremony had a moving (or not) symbollic tribute of entrepreneurial erections. (Although it is perhaps damming that the failure occured on LeMay Doan's section…. the fact that an entire generation of young males are fans of womens long track has to do with more than just her record performance!)

        [youtube OczIXe9lj4c&feature=related http://www.youtube.com/watch?v=OczIXe9lj4c&fe… youtube]

      • I'm saying that entrepreneurs won't get it up, and by "it" I, of course, mean businesses. "Society" does not rely, its members do. If you are asking me what I think they should rely on – I will tell you: Justice.

        I ask you, what is reliable about a system that says if you are productive you must be taken from, and if you are unproductive you must be given to? Even the most charitable of competent producers would quickly be overwhelmed by the task. You can call my system "trickle-down", I will call yours "flush-away".

        • He whose political philosophy justifies robbing Peter to pay Paul can always count on the support of Paul. BTW Justin, give Human Action a read.

          • Ludwig von Mises has been residing on my to-read list for a very long time now.

            As long as we are recommending books, I have one: Essays on Political Economy by Frederic Bastiat.

        • What is reliable about it is that the unproductive don't just conveniently disappear, and when they get desparate, they'll resort to desparate means.

          You can pay for it with taxes for increased social welfare, or you can pay for it with taxes for increased policing and prisons.

          The difference is that the former doesn't involve muggings.

          • I see. Group X is not only owed that which it does not produce because it does not produce it, but also because it could otherwise take it.

            This appeasement view of morality – that determines things to be owed by virtue of the possibility of their being taken with violence – is reprehensible. It is to say that a person is owed whatever, and to the extent that he can, threaten to take with violence.

            I am stressing the moral element here because I think what you are saying is disgusting and atrocious, but there is an economic element to it as well. When you tax (ie. disincentivize) production, you get less of it. The unproductive do not just ("conveniently" or otherwise) disappear; unfortunately, the productive do.

          • You're stressing the moral element because the cost-benefit element doesn't work in your favour. And that's fine, I'm not going to argue the morality of it, because my morality likely doesn't match your own.

            However, your economic element, while it seems to make a lot of common sense like heavier things falling faster than lighter things, doesn't seem to be terribly well supported by the evidence. When comparing per-capita GDP to tax-rates across the globe, there seems to be only a very weak correlation, with much stronger correlations found with the general education level of the populace, and also with corruption levels (negative correlation in that case).

          • No. I am stressing the moral element because it is more important than the economic one. I simply do not think you, via your government, have a right to take from someone something that is rightfully his.

            If you are then to retort, "But I will just beat him up and take it anyway, so you might as well give it to me because it will cost him less than the price of policing me," then I would think you are a disgrace, even if your claim was proved true by a cost-benefit analysis.

            I would be content to leave my statement at that – that morality's course is independent of costs and benefits. However, I do think the veracity of your claim can be challenged.

          • And this is why I wasn't going to debate morality with you, because I do believe that a society has the right to demand resources from its participants, and as such, we are at a fundamental clash of beliefs.

            You are welcome to attempt to challenge the veracity of my claim. I'll gladly look at any statistics you can find that challenge it. Be aware, however, that cherry-picking a few countries (and there are a few, I'll certainly admit) does not in any way challenge my general statement.

          • It will not suffice to establish that we have a disagreement, the point, rather, at least I think, is to establish why we have a disagreement. By debating, we can (hopefully) find the errors in either (or both) of our reasonings that is causing the conflict.

            I will begin by asking you what, exactly, you mean by "society" – is it simply the government?

          • Except that I don't believe morals have anything to do with reasoning. So I'm not sure this premise will get us anywhere, but I'll try to come along with this line of discussion because it could be interesting.

            As for society, I mean the collective of us — united by various things such as geographical location and compromises as to the limits of what we are allowed to do. When you live in a society, you receive multiple benefits thereof, and also the limitations thereof — as decided by the collective.

          • How can morality be determined if not by reasoning?

          • How? They're made up. Morality is all in our heads.

            It's based on subjective opinion. Is it moral to have more than one spouse simultaneously? What about eating human flesh? Eating meat at all? Keeping slaves? To perform homosexual acts? Is it moral to divorce your spouse?

            Depending on the time, culture, or even individual, these all have different answers. And we can be all high and mighty and think that we have the right answers now, but if we really think about it, we realize that's what they thought then, and if they were wrong, why can't we be?

          • It is "in our heads" for reasons.

            Yes, opinions shift. But opinions on morality are logical results of a process of reasoning, however fallacious. If the opinions change, it is due to a change in the reasoning (for better or worse).

            How can I know if a conception of morality is wrong? By examining the logic!

          • You're confusing rationalization with reasoning. The two are very different. The moment you say something is "wrong" you're making a subjective, value-based judgement — one which, by it's very definition, isn't based on evidence. And you can use whatever rationalizations you like, but in the end, they come down to a fundamental belief idea such as "Each man is fully entitled to what he produces and none may legitimately take that from him" There's nothing in the universe that backs that up. It's a statement of belief.

          • It is precisely my point that when I say "wrong" I do not mean wrong according to some or other matter of caprice or taste, I mean objectively wrong according to identified truths about an identified reality.

            I am using reasoning to conclude that a man owns what he produces because it is the result of his efforts. My conclusion is not value-based, my values are conclusion-based.

          • Except ownership is not caused by creation. A beaver creates a dam. Does the beaver own it? A bear creates a pile of bear-crap. Does the bear own it? A human creates a dam. Does the human own it? A human creates a child. Does the the human own it?

            Ownership is a distinctly human conceit. It has no empirical place in the universe. Nothing in the universe says that this post I make is mine. That's man and our society that's decided that. Decided it subjectively, based on our belief structures. That's why we decide that parents own their children, until the children somehow magically come to own themselves. Is there any physical change we can point to that says, "When this person circled the sun for the 16th time, they became the owner of themself?" No. It's purely a belief.

            Your value is a premise. It is based on nothing that actually exists.

          • Based on nothing that exists?

            Man exists. If he wants to continue existing he needs to use things that exist (produce) for consumption in order to sustain his life. The right to use existing things is ownership. If man is to survive, ownership by man of things is a fact that is not simply necessary, but ineluctable.

            The question is: What belongs to whom?

            Answering this question is the object of morality (moral philosophy).

            Morality does not exist. It is a code of human conduct that is required by existence. Nothing in the universe will say that the post you made is yours – except for other humans. However, the universe does say that if your post is to be used, it will have to be used by someone (ownership).

            So why do you own your post? The process of production is the conversion of human labour into a consumable product. This is to say that if you own your labour, you own whatever it is converted to. On the question of the ownership of your own labour: I consider this axiomatic because it is impossible for anyone to command your brains and muscles except for you.

            What I want to stress is that this determination of ownership is not decided, it is logically deduced from an observation of reality. It is not a belief.

          • No. You're making the question up. This is the problem I'm trying to get through to you and I think I'll probably fail because you're so ensconced in your belief structures you haven't yet been able to understand that they're all in your head.

            Now you're saying that use is ownership. Before you were saying that creation is ownership. See the problem? Because ownership does not actually exist beyond our own subjectivity, you can switch the defintions of what it is without realizing what you're doing.

            Again, I bring you back to my questions which you avoided. When a beaver makes a dam, does the beaver own it? This wasn't just rhetorical. Think about it. If the beaver "owns" the dam, then what right do we have to destroy it if we want the water to flow? If the beaver doesn't own the damn, why not? Can only humans own things? If so, then you've just shown that ownership has no physical existance, merely a societal existance — ergo, it's made up.

            Use is use. Creation is creation. Ownership is a man-made concept to try to control resources within a society.

          • Creation is a process of putting materials to use – the process of labour. This is to say that things are used in the creation of other things.

            Do you agree with this statement?

    • "consumers are demanding that the producers take a greater and greater loss on every transaction, so that the consumers can continue to consume… at the increasing expense of the producers"

      I hear The National Post has a few problems turning a profit. But, then, if the producers understood Economics, they might stop emptying their deep pockets.

      • When I speak of production, I mean production of value. If the National Post is putting out a paper that nobody reads, it is not economic production… it is a waste of resources, and should be stopped.

    • "This is bad economics. And even worse morality."

      Economics cares about morality? What is it a Religion?

      • Economics does not. People (sometimes) do. A system that says the more you produce, the more you owe, is immoral. Economics doesn't comment on the matter.

  19. Michael Bliss seemed very gung-ho on Harper there for the longest time, so when did he joing the NDP??

  20. Bliss is talking about taking us back to the upper-income tax rates of the high-growth 1945-1960 era. Why would this suddenly lead to an outflow of tax refugees or a sudden halt to economic growth (especially since all CEOs are apparently clamouring to pay more tax, and the Obama administration has just done much the same thing in the States)?

    It probably makes more sense for Canada to do this than to increase the GST, given rising income inequality.

    • In fact similar rates as proposed by Bliss existed well after the 1960s, until Mulroney got rid of them the 80s.

      Most of the times that 'the rich will leave Canada" argument is brought up it is an overstated fear. But a 90% might make it a palatable idea for the few dozen it would affect.

      • That's a good point about how few people these tax rates would actually affect. I wonder what the exact number is. Many of our top entrepreneurs also put significant sums back into public service and their local communities (like RIM and its various institutes) so why would they suddenly flee if the government took a bit more by taxation?

      • The "few dozen" argument falls flat immediately. If the number of rich bastards to be soaked by us smug social justice lovers is so small, the benefit to the treasury will be minuscule. Which makes it entirely not worth it. So we will then lower the definition cutoff for "undeservedly rich" and all of a sudden a two-income family starts wondering why bother with any overtime, and a small business owner decides that it's pointless to try to grow a successful business, and we can all thank Michael Bliss for killing off economic growth.

    • Because it's a global market with mobile labour force and different tax schemes around the world.

  21. That would have worked well in the past when our competitor countries also taxed the rich heavily.

    In the 1950s the United States' top income tax bracket bracket was over 90%. It slowly came down in teh 60s and 70s and of course Ronald Regandropped it very quickly in teh 80s. in 1987 Canada dropped its highest 51% tax bracket dramatically in part to keep up with Regan.

    Now if we tax income too high, well trained people simply move to the U.S., especially with the ease of labour mobility made possible by the NAFTA.

    • Now if we tax income too high, well trained people simply move to the U.S……

      Agree that if tax rates are increased there will be increased incentive for folks (well trained or otherwise) to move to the US, but – assuming the goal is to increase tax revenues – what we would need to know is if the losses from loss of taxable income outweighs the gains from the higher tax rate.

      I suspect (grumbling aside) that we are actually quite a long way away from the maximum point on the revenue curve.

  22. This book has been referred to in past threads…I'll plug it again here, as it has some relevance.

  23. Bliss: If properly applied, they could put an end to the frustrating debate about the obscene salaries and bonuses that we pay not only to flailing financiers but to mediocre professional athletes.

    What's the frustrating debate?

    If I choose (or, let's be honest, choose NOT) to spend a hundred bucks for a miserable seat at an NHL game all for the privilege of spending three bucks on a thirty-cent hot dog and six-fifty for a beer in a plastic cup, and the performers on the ice receive a substantial portion of my ticket and grub prices paid… the debate's over.

    If shareholders are willing to invest in companies that shell out a major portion of the corporate profits each year to the CEO and a handful of VPs… the debate's over.

  24. Bliss: Suppose we adjust for inflation and create new tax brackets in which our marginal rates are substantially more than the current 50 per cent. Why not levy a 60-per-cent tax on income after anyone's first million, and 90 per cent on everything more than $2-million? There would be serious avoidance problems, to be sure, but governments are gradually becoming ruthless at closing loopholes.

    Does Comrade Bliss not even fathom that this idea is an invitation for nobody to bother creating wealth after whatever cutoff his Politburo ordains? The avoidance "problem" would be of the I'm-outta-here variety. Guess we need an iron curtain, too.

  25. Bliss: In Canada, for example, it might be good tax and social policy simply to abolish entertainment as an allowable business expense. Or we might consider making the income-tax returns of everyone in the highest brackets public documents. While we're at it, we might also revisit the possibility of levying significant death or succession duties to limit the accumulation of unearned fortunes.

    Item one: fine, whatever, but make it a comprehensive simplification of the insane tax code. Item two: interesting that the rich should have no right to privacy. Item three: similar to grabbing it all when you make it; leaving as big a nest egg as possible for the kids is a good motivator for productive economic activity, and promising to sap it all up upon death is a fine incentive to not make it in the first place, or to blow it all on extravagance and minimize net worth at every phase in life.

    It is this paragraph that makes me wonder whether Bliss is engaging in some Coyne-ian attempt at barely-visible sarcasm.

    • Practicing the art of Sarcasm came to my mind after I had read the piece. Perhaps something to do with how the Clark affair played itself out a few days ago. Bliss might be poking at the bear a little bit here. Good on him!

  26. Canada as a country is not relatively over-taxed…but our most affluent citizens are…the top tax bracker here kicks in at a much lower income level than the US or UK.

    Personally, I'm OK with this as a matter of social policy. But to move even further on punative taxation of higher income earners is something I'm not in favour of.

    It is good for an economy to have lots of rich people and it's good for society. Canada strikes a pretty decent balance in my opinion of having a good social safety net but still encouraging ambition.

    • But it's better for an economy and a society to have very few poor people.

      • Better in what way?

        • Fewer poor people means higher demand means more production means more jobs means fewer poor people. Virtuous cycle.

          Fewer poor people in a society means less people who are desperate and despondant, which means less suffering, and less risk of criminal activity to address their situation.

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