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Archive for October, 2006

The Return of a Bad Idea: The Conservatives and the Capital Gains Tax Exemption

The Conservatives are at it again. As reported in the Globe and Mail on October 31, federal Finance Minister Flaherty is reviving and polishing-up the Conservative Party’s ill-conceived election proposal to end taxation of individual capital gains if the proceeds are re-invested. Light taxation of capital gains compared to wages is undoubtedly a gift to […]

Where is All That Income Tax Revenue Coming From?

http://www.cra-arc.gc.ca/agency/stats/final-e.html Here’s the link to the historical income tax data which some people asked for. The most recent year for which full data seem to be available is 2003 (or the links don’t work for 2004 tax year.) In an earlier post, I suggested that the “puzzling” excess of personal income tax revenue growth over […]

Economic Policy Institute (US) on Minimum Wage

In a joint statement issued on Wednesday, October 11, five Nobel Prize winners and over 650 other economists endorsed a statement urging a raise in the minimum wage. The statement asserts that a modest raise in the minimum wage (in the range of a $1.00 to $2.50 per hour), with future increases indexed to protect […]

Softwood capitulation: Not the final word

One more for the softwood file: a commentary by Gordon Gibson from the Globe last week. Gibson regularly flies the flag of the ultra-right wing Fraser Institute but I generally find him to be an interesting commentator on many issues, even when I disagree with him. Perhaps it is because he has real life experience […]

Time to raise welfare rates

SFU economist Jon Kesselman makes the links between rising homelessness and BC’s abysmal welfare rates in this commentary from the Vancouver Sun: A whole $6! Every day!   Imagine that you wake up each morning with six dollars burning a hole in your pocket. Let’s see: How might you spend your money? Maybe contemplate breakfast, […]

Wait lists and innovation

It’s amazing how much can be explained by supply and demand. The big crisis in waiting lists in recent years has been concentrated in a few procedures, mostly knee and hip replacements and cataracts. These surgeries have been made much more widely available in recent years due to the advent of relatively non-invasive day surgeries […]

The Manufacturing Crisis

http://canadianlabour.ca/index.php/jobs__economy/1021 Here’s the link to a paper we (the Canadian Labour Congress) released this week, and which was the background paper for an Ontario Federation of Labour conference. The recommendations are a work in progress among union economists, and comments on them would be welcome.

The Softwood Lumber Deal

This is a column by Kim Pollock of the Steelworkers (ex IWA) in BC re the recent US Trade Court Ruling. I was out of the country at the time, but it strikes me that the basic issue (an un-necesary softwood lumber deal) has been incredibly ignored by the mainstream national media. Our lumber industry […]

New Zealand Social Report

http://www.socialreport.msd.govt.nz/ This is worth a look as a serious attempt at an “official” social audit. A good selection of economic and social indicators, and what is interesting is that the report highlights some progessive benchmarks and targets, and some not terribly impressive performance. A brave government indeed, compared to our own.

Bubble trouble

Dean Baker has a gloomy take on the impact of the housing bubble bursting: After the Housing Bubble Bursts By Dean Baker t r u t h o u t | Perspective Tuesday 24 October 2006 Every new release of data on the housing market provides more evidence that the housing bubble is finally bursting. […]

Gifts for Big Pharma

Not sure how this one was missed by the filters. Thanks to Paul Willcocks for the snag: … [T]he Harper government – acting on an initiative started by the Liberals – pushed up health-care costs by handing big pharmaceutical companies a three-year extension on drug patents, preventing low-cost competition. The new rules affect about 25 […]

Surge in Federal Tax Revenues

As noted in today’s Globe and Mail,  income tax revenue growth is significantly exceding GDP growth, surprising Don Drummond of TD Bank. My guess is that current income growth is highly tilted to the very high end of the income distribution, where it is taxed at well above average rates. A quick glance at the […]

Fiscal policy and smear campaigns

In the current political environment, a government running a deficit is bad bad bad. We have reverted to ideas that dominated economic thought in the 1930s – that budgets should always be balanced. This sentiment is reflected in modern budgeting practices that add contingency reserves and fiscal cushions to already lowballed estimates of revenues, so […]

Oil: Can we give it back?

Every now and then you see a sad story on TV about someone who won the lottery, and then their life went to shit (they gave it all away or lost it gambling, became an alcoholic, etc.).  They invariably say at the end, “I wish I’d never won the lottery.” I kind of feel the […]

First impressions of the “clean air” act

Keynes famously quipped that “in the long run we are all dead.” That’s sort of how I feel about the “clean air” act: it does absolutely nothing in the short-run but may have some benefit some time after rising sea levels wipe out half of Greater Vancouver. In spite of all of the talk about […]

A Looming Global Crisis?

Recently in Paris for meetings between the OECD Economic Department and TUAC (the Trade Union Advisory Committee to the OECD), I found my trade union colleagues concerned about the “downside” risks of an increasingly gloomy economic outlook. The OECD Economics Department believes that there will be a pronounced slowdown in the US – driven by […]

TILMA: A solution in search of a problem

Bilateral and multilateral trade negotiations often go hand in hand, with bilaterals able to achieve results that are more liberalizing than could be achieved on a multilateral basis. If the bilateral agreement is among two major players, however, it can be used to pressure others into signing on. The US is using this as its […]

Hayek’s role for the state

A fascinating defense of Hayek, in response to Sach’s column (posted here the other day). According to Tim Duy, Hayek was more reasonable than we give him credit for being (thanks to Economist’s View for this one): In Defense of Hayek, by Tim Duy: I feel a need to at least quickly defend Hayek against […]

Mintz text on revenue cost of income trusts

Income Trust Conversions: Estimated Federal and Provincial Revenue Effects By Jack M. Mintz (1) The recent announcements by TELUS and BCE have given rise to the question as to how much federal and provincial taxes have been reduced by corporations converting into income trusts. Since the time of my last estimate of about $500 million […]

What if Jack Layton had said that?

Said Prime Minister Harper on the coming Clean Air Act: “This approach will mark a fundamental departure from the approach of the previous government. Canada’s Clean Air Act will allow us to move industry from voluntary compliance to strict regulation. It will replace the current ad-hoc patchwork system with clear, consistent and comprehensive national standards.” […]

Pyramid schemes for kids

I have twice now been invited to join pyramid schemes for my child. The other day we got a letter in the mail from a friend soliciting us to join a “sticker club” (a few months ago, it was a “book club”). Two other children’s names and addresses were on the page, with the instructions […]

IMFlattening the Flat-taxers

A new working paper from the IMF looks at flat taxes and finds they have not lived up to their hype. Thanks to New Economist for posting this one and adding additional commentary. The paper can be found here. The summary: One of the most striking tax developments in recent years, and one that continues […]

Attacking public interest regulation: north and south

What does a ballot initiative in four US states next month have to do with interprovincial trade in Canada? The answer is that both are attacks on the capacity of governments to regulate in the public interest, based on a theory known as “regulatory takings”. The “regulatory takings” movement is more well known south of […]

Softwood capitulation: Epilogue

Ben Parfitt, the CCPA’s BC Resource Policy Analysis reflects on the capitulation we know as the new Softwood Lumber Agreement and what is means for BC, the most affected province. Softwood deal will spur more raw log exports By Ben Parfitt The recent vote in the House of Commons ratifying the softwood lumber agreement with […]

Business Divided on Industrial Policy?

Challenges Facing the Canadian Manufacturing Sector – Interim Report of the House of Commons Standing Committee on Industry, Science and Technology http://cmte.parl.gc.ca/cmte/CommitteePublication.aspx?COM=10476&Lang=1&SourceId=149639 This short report briefly analyzes some of the dynamics behind the manufacturing crisis, and summarizes policy recommendations presented to date (mainly by business associations.) It reveals some interesting tensions within the “business community.” […]

A critical look at microcredit

So why is it that microcredit is as celebrated on the right as the left? wondered someone in the comments to a recent post on Muhammad Yunus, winner of the Nobel Peace Prize. Certainly, it has appeal in elite circles because it reinforces the storyline of hard-working people pulling themselves up by their bootstraps through […]

Happy 60th birthday, CMHC! You’re fired.

Today’s Globe has a story that the feds are contemplating the privatization of CMHC. Let me get this straight. With the run-up in real estate prices, housing affordability is perhaps as bad as it has ever been. In recent years, CMHC has pulled away from supporting the creation of new affordable housing (although it does […]

I’m leaving Aeroplan

Aeroplan increases its payouts to its shareholders, I mean “unit holders”, while at the same time sticking it to people who have been loyal in the past. People like my wife, for example, who does not travel much but has been steadily accruing points for some future reward, and in doing so has put up […]

Jim Flaherty, meet Jeffrey Sachs

Here are two items that go together well. First, here is the most recent tax cut talk from Finance Minister Jim Flaherty, as quoted by the Globe and Mail:   “I can assure you that our government is by no means finished in our efforts to improve our tax system for the benefit of Canadian […]

For whom the Nobel tolls (a real one)

Some econo-bloggers have been having fun with the fact that Muhammad Yunus, founder of the Grameen Bank and father of micro-credit, won the Nobel Peace Prize. Yunus, an economist who would not be shortlisted for the (kind of) Nobel Prize in Economics, wins a real one instead. I saw Yunus speak in Ottawa over ten […]