Monday, March 29, 2010

Corporate Tax Freeze Puts Liberals In The Game

Everyone was waiting for policy, and the ground the Liberals chose was shrewd, for a host of reasons. I've commented before, or more correctly criticized, the duplicity of trying to argue fiscally responsiblity while offering new big ticket spending initiatives. Fair to say the Liberals were guilty of "sucking and blowing", there was a certain incoherence within our presentation, which left the party open to easy retort. In one move, Ignatieff has repositioned the Liberals on the fiscal front and given himself latitude.

I note today, a piece detailing business executive sentiment. Not only does a freeze on corporate taxes seem reasonable, but people are actually arguing for increases. These views are indicative of some sober realities, and the Liberals now have a new credibility.

The idea of further corporate taxcuts isn't exactly an easy sell with Canadians. We've already seen many corporate reductions, the record is clear and the facts support an already "competitive" climate in Canada. If the argument centers around to reduce further or not, the Liberals can expect some sympathy for their position. The Conservatives are effectively reaching, if they think voters will reject the Liberal position- ordinary Canadians won't shed any tear if corporate Canada doesn't get another break, good luck with the "Tim Horton's" crowd. The optics are on our side, and this "savings" can be manipulated by the Liberals for other initiatives.

I don't mean to be to cynical here, but it's pretty easy to massage the numbers to present a fiscal framework. Where a party gets in trouble, is when they are offering competing narratives. The Liberals were guilty, but by now giving themselves some fiscal room, any new initiatives gain some credibility. With the pricetag in the range of a 5-7 billion dollar savings, the idea of a childcare initiative no longer looks reckless. The Liberals can present priorities as investments, and still give the appearance of reigning in the debt. Contrasted with the slash and burn Conservatives on the one hand, "fat cat" reductions on the other, I wonder what is the easier sell?

The Liberals bought themselves some hope "capital" with this tax freeze. We can still provide a measure of vision, investments, and argue we're being responsible. Ignatieff also offered a realistic deficit forecast, which denotes an overall plan. A bit early to tell, but these ideas put forth in Montreal look to put the Liberals back on the "economic front" radar. Given the entirely feeble response from Conservatives today, I am even more confident that we're now a more elusive target.

40 comments:

Jesse said...

It's obvious that this is an easier "sell" than a GST increase, but is it an easier sell than raising taxes on the über-wealthy?

It's obviously not a tax increase (though I think I already saw some Con TPs claiming it is), which is a plus. But it can also be attacked as hurting the recovery, which is idiotic, but not impossible to sell, to my mind.

Steve V said...

The tax increase line is amusing, honestly. As for hurting the recovery, we have the facts on our side, our tax regime is already 25% lower than the Americans. Factor in some industry acceptance, not sure the Cons get much mileage. Canadians understand debt, this is a reasonable response, and it actually has a "class" aspect which I can't see working against us. This allows the Libs to offer some vision, without looking ridiculous, and people must see this measure within the totality.

Tof KW said...

As for hurting the recovery, we have the facts on our side, our tax regime is already 25% lower than the Americans. Factor in some industry acceptance, not sure the Cons get much mileage. Canadians understand debt...

And obviously industry leaders do as well. They understand that a structural deficit is a bigger job killer than taxation.

Too bad the Harper-Conservatives are too busy trying to buy our votes with taxpayer-bought advertising about tax cuts ...rather than be a party of principle that does what's right for the future health of our economy.

Kudos to the Libs for taking this stand. Harperbots will smear you, but this is the right thing to do.

Steve V said...

I think we're on the right side of this issue and I found the howls today juvenile. Not sure this pledge is easy to kick around. A very simple concept that Canadians can recognize. I'm not saying the Cons would develop a better line, but like I said in this post, it's an elusive target IMHO.

Steve V said...

Ignatieff on CBC Politics at 5, if anyone is interested. Good move doing some press today.

DL said...

Its funny how just 24 hours ago when only the NDP wanted to freeze corporate taxes - the Liberals dismissed it as far-left lunacy. Now all of a sudden it's such a great idea.

Steve V said...

It was nuts when the NDP proposed it, because they have NO credibility on the fiscal question. The NDP is promising everything to everybody, so yes it was laughable.

On a side note, to my point of "massaging" numbers, if anyone doubts it, the NDP can actually make their numbers fly, if not credible.

DL, you should be applauding this move, primarily because now it actually has a chance to be implemented.

DL said...

Sure, imitation is the sincerest form of flattery!

Steve V said...

It isn't actually, but knock yourself out.

Jerry Prager said...

It was a great move: it positioned the party exactly where it needed to be in order to deliver network government and the rest of the nuances that will come out of the conference.
The decision was clearly made beforehand, in fact, given the reality that Iggy and the organizers knew the general direction the speakers would take, the whole event shows considerable leadership: they became medium and message.

DL said...

"It was nuts when the NDP proposed it, because they have NO credibility on the fiscal question."

You must be thinking of Bob Rae and Ujjal Dosanjh. We know they have no credibility on the fiscal question.

Steve V said...

Intersting comment coming from you Jerry. Reinforces my view we got it right.


Wow DL, forced to cite two guys who left the outdated carcass. LOL.

RuralSandi said...

Good grief, we all know the NDP mantra - hate corporations, we want unions running the country. NDP get absolutely bent out of shape if a company profits - they don't understand that if a company profits, you keep your job. They believe profits belong to union members. I have a neighbour who worked for GM and everytime the company profited, they would have union meetings believing these profits belonged to them. Well, when the company started to lose money what happened?

A temporary freeze is quite different than a permanent raising of taxes for corporations.

There has to be a balance between labour and busines - NDP don't understand that. Unions are for workers and their rights NOT for running corporations and they've lost sight of that.

Balance is the key.

DL said...

It just shows that total failures and mediocrities like Rae and Dosanjh who were persona non grata in the NDP could find a happy home in the Liberal Party. That's what happens to people who the NDP considers to be fiscally irresponsible - ship them off to the Liberal like casting pearks before swine!

DL said...

"Balance is the key."

I agree. But right now the Canadian economy is skewed about 90% in favour of corporate rights and against employees rights. We have long way to go before we get to 50/50.

Steve V said...

DL, your revisionism is a joke. Yawn.

Steve V said...

Employee rights have never been stronger in this country. Unions control the NDP and they have NO understanding of the modern economy. I've worked in two union shops in my life, both were the most unproductive, ridiculous operations. Protect the deadbeats, at the expense of common sense. I was astounded.

Unions had a place, prior to labour laws with teeth. Now they're a symbol of failure. I actually used to back unions philosophically, until I saw them in action firsthand. What a clusterfuck, and I had to pay them to boot. BTW, both companies are gone.

DL said...

Gee if unions are so terrible maybe someone should have told Paul Martin before he started hugging and kissing Buzz Hargrove in public.

Steve V said...

Sorry, but oh the memories. The one place went out on strike, demanding a wage hike, even though the company was losing money. Strike lasted 6 months, and the union finally realized that YES, they were losing money, ended up coming back for LESS than they were originally offered. The good news, I only worked there in the summers for school. We worked 12 hour shifts, but we got all our work done in 6 without breaking a sweat. I wasn't allowed to do more, because the union agreement said X number of product per worker. On day shift everybody would work like a SLOTH to stretch it out, nights we'd work like a normal person and spend 6 hours playing cards.

The other place I worked, we had a disaster foreman, who would sneak out on afternoons and hit the bar to have drinks and play pool. They caught him on security after about a year, but instead of firing his lazy ass, he went to alcohol treatment. Now, anybody can do this, union or not, but the union forced this remedy to protect a guy who was a complete and utter disgrace to the word WORK. So, please, please don't pontificate to me, unions have become a drag on productivity and healthy companies.

Steve V said...

DL, you just mentioned another guy who dumped your sorry ass party. Double LOL.

Steve V said...

Anyways, Ignatieff was quite good today on the networks. I saw a new coherence that was previously missing, this policy allows for a tight, consistent presentation.

As an aside, he really should do more of these interviews.

DL said...

You want Buzz Hargrove? You can have him. caveat emptor!

DJN said...

In the game...just like the promise for national health care, action on climate change, blah blah blah. THe Liberals can talk left all they want, but it's always corporate interests first.

Steve V said...

blah, blah, blah is right. If only an IQ filter.

DL said...

Check out what Paul Wells has to say: http://www2.macleans.ca/2010/03/29/canada-150-towards-a-new-liberal-ndp-coalition/

"I regret that my account of a campaign-closing 2008 interview with Stéphane Dion merely quotes the then-Liberal leader to the effect that the NDP platform was “not realistic” because of its “old-style socialist” overtones, without quoting the specific element of the platform that Dion found so unappealing. So you’ll have to take my word for it: What Dion specifically didn’t like was Jack Layton’s decision to pay for his promises by cancelling future cuts to corporate income taxes that had not yet taken place."

"None of this means the NDP and the Liberals should now be expected to melt together in one big melting pot of non-partisan love. There are still substantial cultural differences between the two: the spit-polished, nattily attired gang of rootless cosmopolitans who descended upon the Montreal Hyatt this weekend were not New Democrats. They will run as discrete parties at the next election, and the details of their platforms will surely be different in a hundred ways.

But the disappearance of fundamental policy gaps between the two parties (I would say irreconcilable, but of course they managed to reconcile them for a couple of weeks in 2008 even with the environment and taxation differences) is one more reason why Michael Ignatieff needs to stop insisting, every time he is asked, that he would never cooperate with the NDP in — let’s say it — a coalition of some sort after the next election."

He's right!

Steve V said...

A pretty simplistic read really. So, because we don't have a carbon tax and we're in line on corporate tax cuts, SUDDENLY there's a synergy? Wow, deep.

Steve V said...

And, um, Ignatieff should insist there will be no coalition, even if the possibility exists, because only a complete and utter idiot would entertain it prior to an election. Wells is a Conservative WET DREAM here.

Steve V said...

We'll talk after the election.

DL said...

What's wrong with simply refusing to respond to a hypothetical question and leaving all doors open. I agree that neither Iggy nor Layton should explicitly campaign on the idea of forming a coalition after the election. But its stupid to totally rule it out either and then get accused of lying and being devious if you then hatch one after the election.

ottlib said...

Freezing corporate tax cuts is not a hard sell. It is something that should resonate with ordinary Canadians.

Your experiences with unions Steve certainly would cloud your judgement of them but you should not paint all unions as bad because of it.

I have worked in three union shops. All of them were positive experiences for me and I did not see too much of "fucking the dog" as you seemed to see.

Certainly there were some things that cause some raised eyebrows but not any more than in the non-union shops I have worked in.

Steve V said...

ottlib

I was actually going to qualify, this wasn't a blanket indictment. That said, many unions just don't function properly and have lost much of their initial rationalizations to exist. Many unionized workers are hard working, many companies do act unethically. The problem with the NDP, they are run by a narrow consideration, at the expense of a more incorporated view.

I do find one thing funny. NDP supporters rail and rail against the Libs, and then the minute they get a taste for shared power, they'll jump into to bed with the "corporate interest first", sellout, just like Harper Liberals. The hypocrisy is staggering, but that has never stopped anyone before, why change now?

Steve V said...

DL

There is no upside with entertaining hypotheticals, that is exactly what the Cons want. Have you not noticed, they use the word "coalition" each and everytime they can. Now, ask yourself a question- why would they do that? Because, and I'll bet a million, their internal polling tells them it still works, that concept will DRIVE people to them, it's a ticket to majority. They don't need a majority of voters, just seats, so 40% afraid of a coalition is nirvana.

It's a shame, but I wouldn't say a word about working arrangements until after an election. A bit dishonest, but hey, it's not like our opponent doesn't operate this way.

DL said...

"I wouldn't say a word about working arrangements until after an election"

Steve, I agree with you here. But saying "I will never, EVER form a coalition with the NDP even if it means Harper stays PM forever" - as Iggy said last fall is not what I would describe as "not saying a word about working arrangements".

I think Iggy and Layton should both stick to their knitting and campaign as hard as they can and simply say NOTHING about post-election arrangements. Rule nothing in and rule nothing out.

Marpman said...

Why are you harping on Rae and Dosanjh DL? They were both provincial NDP which, other than name, is a different party. Actually, Ujjal was probably the best premier that BC had for quite some time...it was unfortunate he was caught by the scandals of his predecessors...I might have even voted for him. This coming from someone who would never vote NDP.
BC has a Liberal Party, in name only...there is no relationship to the federal Liberals. I sure wish there was...we would be a darn-site better off that we have with Campbell and James.

Marpman said...

To the question at hand. Kudos on taking a stand. I would question that there is really a direct relationship between corporate tax rates and job-creation...I think there are limits on this and coporations have taken advantage of the current economic crisis to lower their bottom line at the expense of employees.
I can bet that the economic impact of job stability is far greater...something companies do little to provide, other than to their CEO.

JimmE said...

Seams you must be on to something Steve, given the spasms from the Dippers in the room, & the lack of comments from the GI Joe side of the hall.

Steve V said...

Real neat polling on this question tonight from David Hearle (on BNN). This stance has winner written all over it. Howling comes regardless, but I can see form now.

DL said...

What "spasms". as I said imitation is the sincerest form of flattery. It will be all the easier to negotiate a deal after the next election now that the Liberals CLAIM to be on the same page as the NDP on almost everything. In the last election the major policy splits between the Liberals and NDP were the carbon tax and stopping the corporate tax cuts. Now that the Liberals have decided that the NDP was right after all on both policies - we should have an easy time negotiating. The biggest problems for the Liberals is that if they make a deal with the NDP it might oblige them to keep all the promises they'll make in the next election that everyone knows they would love to break. Liberal = BROKEN PROMISES.

Steve V said...

DL

You're such a hack you know. My goodness.

RuralSandi said...

Well, "if" the Liberals were to join a coalition of some sort with the NDP I would think they'd have to right to know the NDP's party constitution. The Cons, Libs and Greens have their party constitution available - NDP doesn't

Really, how could anyone support a "secretive" party?

DL - do you have a copy of the NDP constitution and what are they hiding?