Saturday, January 29, 2011

Memory Lane

Sometimes it's fun to go back to your initial reaction to certain issues and see if you "analysis" had any objective merit or if it was just crap. When the Liberals introduced the corporate tax policy, I was excited because it wasn't just a tax, but a philosophical departure with potential impactful tenticles. Anyways, here is my gut reaction post from March 2010, the day after the Liberals came out with the corporate tax freeze.
"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.
My post the next day on the subject was titled "Tim Horton's vs Bay Street".

I still like our chances on this issue anyways, today's column by Susan Riley explains why.



Omar said...

Harper is incrementally whittling his support down to his hard core base only. That certainly translates to a reduced minority and depending on any further gaffes, combined with their unwavering support for unpopular corporate tax cuts, perhaps (oh joy of joys) a loss of government. I have to think that this spring would be a very good time for the Liberals to go to the polls.

DL said...

To bad that the Liberals were the ones who first initiated the idea of endless unaffordable corporate tax cuts under Martin and Manley - and voted in favour of the current round of corporate tax cuts in 2007. In fact when the coalition was negotiated in Nov. 2008 - one of the only things the Liberals draw a line in the sand on - was their absolute insistence that corporate tax cuts be locked in and extended.

Steve V said...

I agree Omar.

Omar said...

Hey DL, howza bout living life in the today? You sound like a sniveling Conservative supporter, "but, but the Liberals!". I mean, really. Is that what you NDPers have been reduced to? Sad.

DL said...

I'm actually glad that the Liberals seem to have decided that the NDP was right about the evils of corporate tax cuts. I just wonder if this is a sincere policy change on their part or if its just something they are saying until after the election when they can go back to their pro-corporate tax cut nature.

Steve V said...

Or maybe, just maybe, we weren't competitive but we are now. Or maybe, just maybe, there is a big difference between reducing taxes when the coffers are bursting and you're in deficit. Or maybe, just maybe, it doesn't matter, DL will just spin like a NDP robot.

DL said...

Or maybe just maybe, the Liberals are just cynically taking a position out of desparation - even though they don't really believe in it and have no intention of following though with it.

Kinda of like the Liberals pseudo-opposition to free trade in 1988 - everyone knows that was a lie from beginning to end and when the Liberals took power in 1993, the first thing they did was break every promise they ever made about free trade and instead expanded the deal to include Mexico.

Steve V said...

So robot it is then.

Hey, if you want a gigantic laugh, go look back at the NDP budget demands last year, a whole slew of releases on corporate taxes. Then go listen to Layton's speech to caucus the other day, and he doesn't EVEN MENTION THEM!!

Kirk said...

DL: "To bad that the Liberals were the ones who first initiated the idea of endless unaffordable corporate tax cuts under Martin and Manley"

How are tax cuts of any kind "unaffordable" when their is a surplus as there was under Manley and Martin?

When did either of those men declare the corporate tax cuts "endless"?

From a purely fiscal position, when you have a surplus you can use that surplus to any type of tax or to pay down the deficit or to pay for new programs. The Liberals did all three. Hardly the manic corporate tax cutters you've fantasized.

And just maybe the real problem with your idea that the Liberals ever proposed "endless" corporate tax cuts is that now they do want to end them. Kinda disproves your whole argument.

Tof KW said...

Good on you DL for keeping up the fight!

Constantly attacking businesses and taxing employers to insolvency. Yet another major reason why the NDP will not become the official opposition ...let alone forming government.

Steve V said...

Hey DL, why don't review Doer's corporate tax record in Man or Calvert in Sask. See that's the difference between pie in the sky opposition and actually governing as the NDP.

Such a joke.

DL said...

I see I've touched a sensitive nerve. Good for me!

Steve V said...

Ya, that must be it.