Excited Delirium

Stories about Excited Delirium, the Shock Economy and a little fiction here and there.

Category Archives: tax issues

MayDay 2011: FREE KITTENS AND/OR PUPPIES*

Yes, Canadians, you too can have FREE kittens and/or puppies*.  These will be the ones that we save from the evil Liberals and Socialists that eat cute animals for breakfast.

This will follow the Conservative Party of Canada’s current election promise to give tax breaks to families some time later in this decade.

In other words, when hell freezes over.

*To qualify, you must be a member of the Conservative Party of Canada, be white, be able to identify that you voted for the CPC in at least 3 of the last 4 elections, have at least 8 children (adopted kids are NOT acceptable), non-gay, have your own home, not be a senior, have family heritage in Canada that is at least 100 years old and recordable according to Archives Canada and must at all times wear blue.

Did We Really Get Back $83 Billion in Job Creation

Accidental Deliberations does an exceptional job of recalculating the loss to the Canadian treasury as a result of corporate tax cuts.

The only question remaining is whether or not we’ve seen nearly $100 billion in new revenue from ‘job growth’ over the last decade.

I didn’t think so.

CCPA: Flaherty’s Irish is Showing

As we prepare for the next federal budget (supported by the Conservative-NDP coalition of convenience), we see again that Jim Flaherty’s Irish will likely show through.

This is a bad thing.  Bruce Campbell of the Canadian Centre for Policy Alternatives tells a cautionary tale about Irelend.

Ireland is bankrupt.

The Irish Prime Minister has been forced to resign.

Their economy is in ruin.

All because people bought the line that they had to make Ireland’s tax policy as attractive as possible.

Translate:  they sold the ‘cut corporate taxes’ routine and the people of Ireland were stupid enough to buy into it.

Now, unemployment is skyrocketing, the IMF (translate:  world corporations) owns Ireland and the Irish are screwed.

Canada is embarking on the same path.

Stop Corporate Tax Cuts NOW.  End Corporate Welfare.

Canadian Taxpayer Federation Nonsense and Nitpicking

The Canadian Taxpayer Foundation launched their annual ‘Teddy Awards’ yesterday.  This is a program to nitpick and embarrass all levels of public employees.

Where’s the bloated corporate mess of the year award?  We know the Canadian Centre for Policy Alternatives releases their annual review of corporate salaries, but when we hear about the elaborate waste that goes on in the private sector, in many cases on the public dime?

Like Lockheed-Martin winning an untendered bid for their useless and unnecessary stealth planes bought by the Conservatives for $16 billion (and counting)?

Or the firm(s) that were behind the programming and development of Ontario eHealth, bilking taxpayers for big lunches and broken databases, all at the expense of taxpayers?

Or how about the massive pork-fest that the Cons will likely throw at Quebec for the hockey stadium?  This is good use of public money?

The beneficiaries of these free-for-all spend programs should be up against the wall and not public servants.

Corporate Tax Cuts = Profit to US Treasury

Erin Weir of Relentlessly Progressive Economics has posted an analysis of the impact of corporate tax cuts on the IRS and comes to this conclusion:

Statistics Canada figures indicate that US corporations had Canadian operating profits of $43.1 billion in 2007. Given that some operating profits are used to cover non-operating expenses like interest, US corporations were repatriating (rather than reinvesting) the lion’s share of what was left.Multiplying $30.4 billion by 35% indicates American tax obligations of $10.6 billion. But the IRS reports credits for Canadian taxes of only $8.3 billion. Therefore, the implied transfer of corporate tax revenue from Canada to the US treasury is $2.3 billion.

In other words, it may be a small sum compared to trillion dollar deficits, but we’re paying for the American military industrial complex with our tax cuts.

Way to go Stevie!

And Jack, Jack, Jack:  support Stevie’s new budget and the NDP will be sure to slip into oblivion.

Why Corporate Tax Cuts Don’t Matter to Me

And Shouldn’t Matter to Most Canadians

Corporate tax cuts border on the theoretical.  Will cuts to the world’s largest corporations generate more jobs here or enrich the treasury of the countries that they’re home to?  Does Wal-Mart really “invest” more in Canada when they pay lower taxes?  Does GM do more R&D research here simply because we’re making it easier for them to have a fatter bottom line?

Do corporations generate more jobs than the local resources that they use?

The short answer is no, but I’m sure all of these and more questions merit additional research.  In fact, the Progressive Economics Forum argues that corporate income tax cuts can actually lead to a reduction in employment.

With all that said, I’ll tell you one thing:  corporate tax cuts mean jack shit to me.

Here’s why.

Like millions of other Canadians, I run and own my small business.  It’s a sole proprietorship and like all sole proprietorships, 100% of the income that I generate goes to my personal income so I’m taxes at the personal income rate, not the corporate rate.  Yes, as far as the CRA is concerned, I submit a business filing every year, but the filing reflects my personal income and not a business income.

In most provinces of Canada, the number of small businesses that employ 1-4 people (ie. usually 1 + a family member) almost always exceed 50%, in many cases 60%.

By the end of 2009, the number of small businesses was approximately 2.4 million.  I’m guessing that today that number is closer to 2.5 million.

In other words, a significant portion of the population of this country is dependent on small business income.

To put it another way, slashing corporate income taxes is nothing more than posturing and a platform for ripping off the average guy or girl that works 16 hours a day to make their business work while the ‘Fortune 500′ make more fortunes.

If any party in this country wants to win a majority in this country, all they have to do is stop dropping their pants for the bigwigs and start fulfilling on promises to support small business in this country.  Here are some ideas related to this kind of platform:

  • Allow a $100,000 business income exemption for any qualifying small business (to be defined).
  • Alternatively, promote a tax exemption for qualifying small businesses to the tune of $250,000 or three years, whichever comes first.
  • Allow RRSP investments in your own small business, subject to approval (similar to the popular ‘Home-Buyers Plan of the 1980s/1990s).
  • Consider alternative models for small business and economic activity, including co-ops, non-profits, charities and so on.  Then consider tax breaks for these organizations as well.
  • Stop wasting money on mega-budget programs like defence and prison systems.  Use saved money for digital and physical infrastructure.

Getting 2.5 million small business owners on your side will translate to influence.  They’ll make donations, but more importantly, they’ll hang your sign in their window, they’ll influence their family members and they’ll maybe even volunteer some of their precious time to support your team.

What are your suggestions?  I’d like to know, as I’d like to expand on ideas for generating good platform from the small business angle.

Jim Flaherty to Hike Taxes? Probably

Jim Flaherty and the rest of the Cons refuse to heed the actual outcome of disastrous financial ‘trickle down’ experiments like Ireland and the US (more states in the US are teetering on the edge of bankruptcy because of reckless federal fiscal management and downloading), so it’s unlikely that we’ll get corporations paying their fair share any time soon, but Diamond Jim did give us cause for pause in this interview:

“Our plan actually is to continue to reduce taxes over time in Canada. We’ve reduced business taxes significantly, and our plan continues in that regard. We’ve reduced the federal consumption tax, the GST, as we promised we would … We’ve done some tax reductions on personal income taxes. Quite frankly, we’d like to do more over time, so that’s the direction we want to go. What we’re seeing in the economy is moderate growth. It’s not dramatic, but it is steady. And we expect that to continue over the medium term. You know, given what we’ve all been through around the world in the last few years, I would never presume to say ‘never’ in terms of a very substantial economic shock where we’d have to have one. And there are risks in the world, with respect to Europe, with respect to relative weakness in the U.S. economy, with respect to some global imbalances that I’m sure we’ll be talking about at the world economic forum (in Davos, Switzerland) the next few days. That’s not the expectation. The expectation is that we’ll have continued moderate economic growth and continued tax reductions over time.”

So there you have it folks … the exact quote that the Cons have ripped out of the Liberal lines about tax situations in order to slam them continuously about their ‘tax and spend habits’ and that the Liberals will be mega-government bureaucrats.

Which – correct me if I’m wrong – makes the Cons what?  Oh yeah … BIG F-IN HYPOCRITES telling Canadians lies at every turn!  Isn’t it Jim who’s created the biggest deficit in Canadian history?

US Due for Debt Collapse

The US is due for a massive debt collapse – or hyperinflation.  My prediction is that it will be at some point in the next 6 to 12 months.  The result of this collapse is that we should expect to see the US dollar drop substantially further, sending commodity prices shooting through the roof.

US exported inflation (what I call ‘interflation’) will start to punish all of us for the largesse and excess that is destroying their economy.

Canada will benefit in the short term with oil prices driving the economy of Alberta and Saskatchewan to new levels, with royalties filling the coffers for everyone but eventually, we’ll have the same erosion of manufacturing and other industries throughout the rest of the country and Ontario will once again face financial issues as it tries to even catch up to the whirlwind that is coming.

The solution is to eliminate any pricing in US funds.  If we remove ourselves from US dollar pricing, we may be able to avoid the Canadian dollar becoming a ‘petro-buck’, something that’s more of a curse than a benefit.

Here’s the original text of the piece from Zero Hedge:

#1: The US Fed is now the second largest owner of US Treasuries.

That’s right, this week we overtook Japan, leaving China as the only country with greater ownership of US Debt. And we’re printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June… as in four months ago. Want an explanation for why stocks, commodities, and Gold are exploding higher? Here it is:

dollar dropping.gif

#2:  “There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.”

This horrifying fact comes courtesy of Morgan Stanley analyst David Greenlaw. And it confirms what I’ve been saying since the end of 2009, that the US has entered a debt spiral: a time in which fewer and fewer investors are willing to lend to us for any long period of time… at the exact same time that we must roll over trillions in old debt and issue an additional $100-150 billion in NEW debt per month in order to finance our massive deficit.

And only $550 billion of the debt we’ve got to roll over has a maturity greater than 10 years!?!?

So we’re talking about TRILLIONS of old debt coming due in the next decade. The below chart depicting the debt coming due between 2009 and 2039 comes courtesy of the US Treasury itself. In plain terms, we’ve got some much debt that needs to be rolled over that you can’t even fit it on one page and still read it.

maturing treasuries

#3: The US will Default on its Debt

… either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years.

Bear in mind, I’m completely ignoring the debt we took on with the nationalization of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every US family making $31,000 in debt payments per year for 75 years to pay off our national debt.

Obviously that ain’t going to happen.

So default is in the cards. Either that or hyperinflation (which occurs when investors flee a currency). Either of these will be massively US Dollar negative and horrible for the quality of life in the US. But they’re our only options, so get ready.

How Many Scandals Will It Take …

To Finally Bring Down the Harper House of Cards?

The Helena Guergis affair is just the last of an incredibly loooooooooong line of scandals that keep flying in the face of our federal leaders.

And yet, somehow, they manage to weasel their way out of issues and back into talking about the insanity of ‘more crime bills’ or ‘economy economy economy’.

The list is far too long, but here’s a quick stab:

  • Guergis
  • Jaffer and his various ‘business interviews’ and promises to connect people with the PMO
  • Lisa Raitt’s mishandling of the world’s limited isotopes
  • Maxime Bernier’s ‘forgotten’ documents and the links with the mob
  • Let’s not forget ‘Diamond’ Jim Flaherty’s surprise reversal on Income Trusts, literally dissolving billions in retirement assets for seniors and others overnight
  • Thousands of political appointments to various public offices, poisoning the public well for decades
  • Promises to reform the Senate while stacking it conveniently with inexperienced celebrities
  • Fake cheques promoting the CPC using Canadian taxpayer dollars
  • Endless 10-percenters as junk mail, costing Canadians tens of millions of dollars per year (mainly to pick childish fights with other leaders)
  • The links with the mob of almost all infrastructure spending, particularly in Montreal
  • Breaking one’s own law to have a forced election on a fixed date
  • Massive investigations into spending irregularities with the last election
  • The Chuck Cadman bribery scandal
  • Maple Leaf deaths, potentially a result of attempts to deregulate the industry
  • Voted repeatedly as the world’s worst environmental destroyer
  • Issues related to people in Stephen Harper’s inner circle releasing details about Obama before the US election
  • Crimes against humanity with the Afghan detainee issue
  • Complete mismanagement of the country’s economy (largest deficit ever created in Canada – ever) and creation of a permanent structural fiscal deficit.

How many scandals constitute ‘enough’?

All it took was an inflated marketing scam with the Liberals to have them turfed.  I know … it was enough to show our disgust with the Liberals.

And yet how many more people have to die / get ripped off / be booted from Cabinet or just plain f*** up in order for Canadians to finally stand up and demand an election so we can dump these clowns?

Have we all lost our minds?  When people promise accountability and economic action and yet deliver the complete opposite, why are we not going to the polls?

Harpooned: Canadian Taxpayers

In an interview with the CTV (does he ever talk with the CBC?), Stephen Harper has indicated that he will not rule out a carbon tax, simply because he’d be more than happy to drop his pants for the US (again).  This is a complete 180 from his original position that destroyed the Dion Liberals in the 2008.

Brilliant.  Sycophantic slippery Steve has lied to us again.

In fact, we’re all about to be ‘Harpooned’, much like Baby Boomers and other savers were Harpooned when the Conservatives killed the value of Income Trusts back in 2006.

We’re all going to eat the cost of carbon capture and carbon sequestration all so that the companies in Alberta can continue to belch out unprecedented volumes of crap.

Yay!  I can’t wait until the next election.  Please Santa.  Please bring me an election for Christmas :)