It's been a relatively silent coup. The wealthy have successfully bought our political system. If you have doubts, consider two key pieces of Harperian policy -- income splitting and Tax Free Savings Accounts. Both policies amount to robbery of the federal purse. Rhys Kesselman writes:
Income-splitting has been extensively assessed and widely criticized for its revenue cost, its tilt toward higher-income families, and its failure to accomplish anything beneficial for the economy.
Soon the other shoe may drop: The Conservative Party of Canada’s second major tax promise from the last election was to double the contribution limits for Tax-Free Savings Accounts.
The Conservatives market TFSA's as the salvation of the little man and they now propose to double contribution limits:
Yet doubling the TFSA limits would share the deficiencies of income-splitting as public policy — or even surpass them. It would drain revenues from both federal and provincial treasuries, with deceptively small initial sums adding up to costs far greater than those incurred through income-splitting. The long-run benefits would be far more sharply skewed toward the wealthy and high-earners. And doubling the TFSA limit would not benefit the economy in tangible ways.
Once the existing TFSA provision has fully matured in 40 to 50 years, it’s estimated to cost the federal treasury up to $15.5 billion annually — more than seven times the cost of income splitting. Provincial treasuries were insulated from the revenue impacts of income-splitting; they will not be so lucky with TFSAs, losing up to $9 billion per year when the scheme matures.
The government’s vow that TFSAs will never be considered in federal income tests for tax and benefit provisions carries further revenue costs. By mid-century, TFSAs will raise the Guaranteed Income Supplement’s cost by $2.8 billion annually and reduce recovery tax from Old Age Security by $1.2 billion annually. These figures are the official estimates; the sums projected by an independent analyst run far higher.
Stephen Harper argues that the age for Old Age Security must be raised because we don't have the money to pay for it. But he doesn't tell you why the money won't be there.
The wealthy could not ask for a better servant. And they will see that he is properly compensated. They own him.
