Sunday, February 06, 2011

"We've Got To Get Our Fiscal House In Order"

A quote from Ignatieff yesterday, as he toured the Liberal bastion of Alberta. A now reoccurring theme, and one that owes any legitimacy to the corporate tax cut policy. In the past I noted the Liberals were guilty of "sucking and blowing" on the fiscal front, the Conservatives able to carve apart the idea of offering restraint, while simultaneously promising Canadians new expenditures.

Hard numbers are the lonely domain of wonks. Truth be told, in the political arena appearance trumps math, you can massage this and that to create a credible plan, so LONG as you have some artillery at your disposal. People that doubt the impact of the Liberal corporate tax policy, fail to realize it is the jump off point for much of the party distinctions. When the Liberals adopted the freeze on corporate taxes, my first post argued that this move put us in the game on the fiscal front. Prior to this pledge, the title quote would have brought laughter, aggressive counter from the government, the rhetoric lacked a concrete underpinning. Now, with the corporate tax cut freeze, Liberals have something to point to, something that says we can fund programs, while still looking fiscally responsible. The government can't attack on the fiscal front, because they are now saddled with a perceived lost revenue stream. I suspect the government is aware of the problem, because their only real attack angle centers around jobs, absolutely dead quiet on the fiscal front.

The corporate tax cut freeze has given a measure of teflon, as well as an ability to play offence, on an issue which was previously a liability. There is a certain sophistication in play, that involves adding up one item, minus another, ending up a certain point. I don't want to short change voters, but it's a bit of a stretch to think the Liberals will have to fully answer all the minuet in play. No, just like the Conservatives, all you need is the big banner items, something compelling to put in the window, and there is little risk that calculators will decide your ultimate fate. Cynical yes, but also a reality which plays itself out everywhere and anywhere come campaigns.

The Liberals will release a deficit fighting plan, and it will show a road to surplus, just as the Conservatives argue. The corporate taxes will provide a sense of restraint, as well as making Ignatieff bullet proof on certain new expenditures. Liberals can actually say "we can't afford" and not look hypocritical, at least not on the most basic of levels. Liberals can say "we've got to get our fiscal house in order" and actually look relatively reasonable.

10 comments:

bubba said...

I believe i read that corporate tax receipts for the quarter were up12.5% with the tax cuts. Is M I saying by raising the rate they will go up a further 1.5%. The argument is so full of holes it will not stand the test of a campaign. And he already has the money spent. Then if he must appease Jack Layton to get his hands on power. I think it is a house of cards. 69000 new jobs last month- Thats a real number people can relate to.

Steve V said...

The GST cut was so full of holes it was pathetic, every expert in the country against. How'd that work out for ya?

If you think breaks to big banks is a house of cards....

Steve V said...

Nobody cares what the expert class says (see carbon tax), but they do understand that it's hard to pay down debt when you're giving money to ma Bell.

My point, last year the quote would have been laughed at, now the Liberals can argue this and it boils down to interpretation.

Jesse said...

I think it's interesting to note that the last time Liberals took power they fought the deficit far more aggresively than they had proposed.

The Cons... not so much.

So frustrating that this isn't part of the common "knowledge".

WhigWag said...

@ bubba: that's just CON spin. That recent increase is NOT due to the corp. tax cuts 'working' in ramping up production & investment: it's due to a combination of their being way DOWN before, due to... remember... the RECESSION (and the increased dollar, so fewer exports to the USA), plus they were temporarily way up due to some extra write-offs or something;

the Finance Dep't itself says in their October 2010 Fiscal Update, don't expect that increase to continue:

"Revenues in 2009–10 were $4.7 billion higher than projected in Budget 2010, as lower-than-expected personal income tax revenues were more than offset by higher-than-expected corporate income tax revenues. Most of the higher-than-expected corporate income tax revenues do not carry forward over the outer years of the forecast period, as they were due to exceptional one-time factors. On the other hand, the lower-than-projected personal income tax revenues do largely carry forward over the forecast period, lowering the tax revenue projections over the forecast horizon."

http://www.fin.gc.ca/ec2010/efp-pef-04-eng.asp

Marpman said...

Curious. Of the 69,000 jobs which were created last month...how many were real, long term jobs. The Canadian economy, through this recession, lost a lot of the stable, benefit-paying...jobs. If 23,000 of these jobs were at Tim Horton's we are not rebuilding our economy.
I really do not believe the job-losses have stopped...just transferred to lower-paying, less-benefits and less security.
Lowering the corporate taxes for large companies will do less than providing a solid economic environment and encouraging companies to setup shop in Canada. Walmart does us no good, money moves south. How many companies are being purchased by oversea interests? This does not help us in the long run...

marie said...

And how many of these new jobs went to elderly retired seniors who have been out of the work force for many years and not counted on the unemployment figures but in today's economical crisis and rising food prices, are now forced to get a job to subsidize their income with the inflation prices of food and Medications.

Too be honest, if I were healthier I too, would be looking for a job to subsidize both food and meds. And so would my partner too if he were not waiting for at least 3 months for back surgery to fix his back before he becomes a cripple and wheel chair bound.

When I go to Timmies which is rare as I dislike them about as much as CON partisan CTV. At Wal-Mart, I see a lot of elderly retirees working all the time as cashiers, janitorial and they are doing it for a very good reason as I mentioned above. Not for the fun of it but of the necessity of it.

Because they have little or any choice if they want to eat healthy or even eat at all to purchase their much needed meds. I have heard many say that they had to stop their meds in order to have enough monies left over for buying food in their homes to last them for the month until they receive their next pension checks. One senior living alone has a tough time managing accommodations food and medicines and very often have to stand in line at food banks to see them through another month.

Canada was always know as the country where no-one had to go hungry and always have access to suitable living accommodations, adequate health care but it is plain to see that with a runaway government spending like drunkard sailors, these people have been forgotten and neglected by the current systems of bad government

bubba said...

"Manufacturing held steady after posting gains of 66,000 in December"

rockfish said...

Tie this fact in with the idea that "what comes in goes out" -- the CONs increasing size of government: bigger PMO, largest cabinet, publicly funded CON advertising campaigns, etc. Then put in the suggestion that 'Harper has cut programs before - what does he have in mind to help pay for your CEO's holiday?'
There is a balance when it comes to fiscal responsibility, and Harper and his cohorts have never taken responsibility for their actions nor for the cost of their 24-7 campaigning... I think some history lessons would be nice to throw out to Canadians -- 1963-67 minority Liberal government brought us universal health care, the Canadian flag, student loans, Canada Pension Plan, greater respect abroad... after 5 years of Harper ?

Steve V said...

http://www.therecord.com/opinion/editorial/article/481819--liberals-gain-traction-in-corporate-tax-debate