The Goderich Signal-Star, 1969-12-18, Page 22ipA POiipBICH EILU
& TkIURSAAX. DECEMBER 18, 1269MI
Benson blandly calls his
White Paper "Proposals for Tax
Reform," a misleading title
Which- turns out to, be
'politicalese' for use of the Tax
Law to create a new form of
Canadian Society. If you use a
tax law for non-financial
objectives, there is no reason to
stop there. For example when
unemployment is too high, all
you would have to do is to
amend the Defense Law and
conscript the unemployed into
the Armed Services. When a
labor shortage 'occurs, the
Criminal Law could be overtly
amended to reduce the length of
sentences which judges may
impose. The result is a
corresponding increment in the
labor force. Question: Are you
going tosupport this
prostitution of the Law?
Of necessity some cognisance
had to be given • to that
extravaganza which cost the
taxpayer four million dollars and
was the result of • a four-year
gestation period between 1962
and 1967. The Carter
Commission declared (1) The
tax system shall be used to
redistribute the wealth of the
Canadian people, and (2)
Government expenditure will
expand continuously; gradually
taking to itself more and more
of the Gross National Product.
This bore out Parkinson's 2nd
Law: "Government spending
will rise to meet the available
resources." It should be recalled
that two out of the six
Commissioners dissented from
several integral concepts of the
Carter Report.
The present White Paper seeks
exactly the . same Carthusian
objectives as above, though they
are more subtly camouflaged.
They are stated as:'"i o create a
new type of Society; -to
redistribute the wealth; to
stabilize the economy and
encourage Canadians to own
more of Canadian industry. If
we agree to accept these
garotte -like conditions, then the
Government promises to
continue its Social Services and
to expand its role in the
economy. That is, in plain
English, to continue to
nationalize industry.
Bil IOU_S. BENSO_NIA.N
In the preparation of this
pallid Paper the "authors have
' failed to blaze Natural Resources
as the prime source' of Canadian
wealth, Instead of directing
attention to this as the financial'
saviour of the country; instead
of reinforcing a success factor;
instead of sounding a ' long-term
clarion call . to be "Uppe and
Doinge" to exploit these
resources; to increase the Gross
National Product; to attract
capital, both domestic and
foreign, 'the Paper retreats into a
short-term, fortuitous policy of
milking any and every source
which appears on November 7,
1969, to be in the ascendant.
These depressing
"author -followers -in -
search -of -a -leader," propose to
plough the same fitful,
inconsistent, devious furrow,
interlarded with much
heart-rending propaganda about
poverty, marginal areas,
starvation and tear -jerking
stories of whole families living in
a pickle barrel on welfare, in the
heart of Toronto, where the cost
of living is at its highest. To
impress • you still further, Mr.
Benson himself, knows of a
family which has been
poverty-stricken for four
generations, and of course,' on
re o.wel"o All
that can be said about that is,
that . if the Social Service
Organization cannot rehabilitate
a family in four generations,
evaluation of Cahada *Ivor
then it is probable that the
representative of the People, in
his search for votes to enable
him to retain his $18,000 per
annum, has been overcome with
that most common North
American disease: Do-Goodism.
Idleness is being condoned:
This writer is not trying to tell
you there are no deserving cases.
Rather the message is that the
government relies too much on
handouts and too little on
rehabilitation to enable the
people in question to become
self-supporting. Perhaps even less
Color TV.
The Government, very
properly, has said that one of its
purposes is to help the poor. But
by reducing the value. of the
money they get, and reducing
the chances that they, or their
children, can find jobs, is to
trade an inheritance , with all its
favorable prospects, for an
immediate bowl -of pottage.
The whole tenor of this Paper
is not what the Government can
do to help you create, but what
the Government could do if it
was once and for all authorized
to milk you dry.
THE ABILITY TO PAY
The basic purpose of this
Paper seems to be to convince
you that only the Government
can expend money • efficiently.
To support the need for
increased funds year after year,
the necessity arises to represent
nearly one half of the
population as poverty-stricken
morons, whom the Government
beseeches to set down their
burden and look to it for
salvation. Since the government
is sterile when it comes to
creating wealth, the Paper is
forced to enact the Principle of
the "Ability to Pay" (1.9), while
a bit later on (1.36) it is
explained how to acquire the
"Ability to Loaf."
Having excused duty to
3/4ths of a million; Reduced
Taxes for 3.1 million; No change
for 820,000; BUT 3.03 million
will pay more. These last, these
wise virgins, who decided to lay
up something for the
post -Benson Flood; it is these
who are to be proscribed. Just
glance through Chapters 2 and 3
of the Paper and you will
we cannot .afford now to reduce
the overall revenues from
personal and corporate tax."
Then at para. 2.3: "New and
enlarged programs in the welfare
field have made it necessary to
raise substantially more
revenue." Remember,-,. the
Governments . already take 35
percent of the Gross National'
Product, while 20 percent is
regarded as the danger point,
beyond which no government
should go.
With this in mind, it is well to
refresh the memory as to the
examples of gross
mismanagement and ineetitude
in the application of tax monies.
Where are the savings we. were
promised from the Unification
of the Armed Forces? The
exhorbitant cost of refitting the
Bonaventure ($13' million), only
to dispose of her; The $47
million ' for 1,000 armored
personnel carriers, only to find
that what we really need is
$50.2 million•of Bell helicopters.
$230 million for 115 CF -5
short-range aircraft, only to
wake up to a need for
Long-range mobility. Where is
the 30 percent saving in
personnel promised without
detriment to the efficiency of
the aforesaid Armed Forces?
Has it ever suggested itself to
you that our governments, both
Federal and Provincial; suffer
from an inferiority complex,
which makes them insist that the
country can afford to keep up
with the Jones' to the south?
No one in his senses believes
any more in the ability of
government to manage the
numerous activities which it
attempts; at least not so long as
the "Club" attracts so many
• unsuccessful members. Vide the
deficits piled up by the C.N.R.,
Air Canada, the paranoic
standard set by what goes for
`education,' including the new
temple of, educational research
at $60 million, all of which has
failed to produce any noticeable
improvement in student ability,
even it it has transported
numerous `teachers' to a
standard of living to which they
never aspired in their wildest
dreams. What about the blank
cheque for Medicare; something
which the wealthy United States
cannot afford. The vote -catching
' 1P over-:- the --farce of an Old Age Pension for
well-to-do" (2.1 and 2.38); all; even thoseawho do not need
. wet1-,tcf,:do.persons (2.4Q); . •• it. And"theirtbriadnittittrate its' •
integrity, the' confiscation of
$176 million for purposes other
than that for which it was given.
In the face. •'of such callous
disregard for probity, how can
one be expected to agree that
the government's "need is so
great?" When our necks have
been hung with all the foregoing
millstones?
supineness -in the face of these
two massive threats, and their
undermining effect of the
economy, which makes the
White Paper's call to us to create
still more wealth .a cause for
rebellion.
CANADA'S RESOURCE
INDUSTRY
Canada is primarily a resource
country. Her real , wealth is
indigenous. • Does the Paper
mention Development? No. Is -it
clear to the government that
Canada cannot generate the
capital needed to develop her
natural resources?. Apparently
not. The government does not
realize that ° after we have been
forced to subscribe to all the
fantasies which Ottawa and
Robarts' whiz -kids have
provided, that we have none left
to buy into Canadian industry or
mining.
The Paper has discovered that
the mineral industry, like the
middle income group, is creating
wealth. It "must bear a fair share
of the burden of taxation"
(5.24). The privileges given that
industry previously, are now
abrogated. For some reason the
Paper feels that this . should
"provide a powerful incentive to
taxpayersto undertake the risk
of opening a new mine" (5.34).
In short the incentive which high
profits provide both to Canadian
and foreign capital alike, is to be
milked until the former • lose
heart and the latter go home.
That high profits entail high
risks is not subscribed to by the
Paper, -which is obsessed only
.with making a buck; a feudal
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"well-to-do" (3.7); "People who
are quite well-off" (3.9);
"well-to-do" '' (3.14). The
litician has had recourse to his
fa orite-- weapon: Divide and
Rule._Pillary .the minority which
accepts the responsibilities of
life; creates the wealth; bleed
them! Then dissipate the
proceeds by rewarding the
majority, and thus ensure your
re-election.
Para. 2.3 of the Paper borders
on `suggestio falsi,' when it
claims that Canadian exemptions
exceed those in the U.S.A. and
other countries. (See Table '3).
However, it is not explained that
tax paid in Canada, for similar
circumstances .in the U.S.A.,
amounts to $608 as against $345
in the U.S.A. In a higher bracket
the differential becomes $1,830
to $958, and so on up the scale.
On average the U.S. tax is half
that levied in Canada. (Globe &
Mail letter. R. H: Smithers.
6/12/69). But Bensot contends
this will keep the tads in Canada.
No brain -drain! Whistling to
keep his spirit up!
THE STIGMA OF
GOVERNMENT WASTE
Para. 1.3 of the Paper reads:,
"The needs of the Federal and
Provincial governments for
money to do useful and
important things is so great that
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CHRISTMAS IS
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WHAT EVER HAPPENED.
• TO INFLATION?
The Paper never even
mentions Inflation, one of the
mot destructive factors of our
economy. Not a word as' to
fighting it. Organized labor, with
its commanding position outside
the law, is to be left in the same
position from which it can and
does threaten the well-being of
the — State if they are not paid for
what they do NOT do, as well as
for what they do do.
Ignored too, is another factor
which ensures the prevalence of
inflation; the universal credit
system, whereby the man in the
street is enticed to mortgage his
salary to obtain some appliance
at a cost which serves to enrich
the lender with his high rate of
interest and your voracious
government with its huge sales
tax. The loan company finds
itself with even more capital •to
loan and thus pauperize more of
the population. It is government
Harbourlite Inn .
CH R1-STMV1AS-
"� ff E
DEC. 25
THE CLOCK.
9:30-1
belief that it is always "Heads I
win, tails you lose."
CAPITAL GAINS: THE
FIVE-YEAR CURSE
insoii's first coming
It is hard to believe that this
Paper and its source material are
entirely rational. For when in
Chapter 3, Capital Gains are
broached" the atmosphere
immediately takes on all the
perversity and hallucinatkon of
Alice's Wonderland."
All the fun of the Fair is to be „
introduced by a "Valuation
Day," chosen in secrecy and
suddenly announced by Mr.
Benson. Five years to the very
day "tax would be due on the
accrued (paper) gains on shares
(held by you) in "widely -held"
Canadian Corporations" (3.52).
(This means: Suppose you have
one share listed on the Toronto
Stock Exchange on `Valuation
Day' as selling for $63. Five
years later, to the day, with -4
percent per annum inflation, this
share may list for $75.60. You
add to your income from other
sources one half of the
increment of $12.60 which- is
$6.30. You pay tax on the
resultant total .income at the
prescribed rate. You therefore
pay capital gains tax not only on
inflation (which is depredation
of your dollar) but also on any
increase in the value of the stock
due to better management or
'some other economic cause.) By
this apparently innocent decree
the 'government can quite• •easily
destroy a shareholder's equity,
since he may have to sell shares
to pay the capital gains tax.,
This hallucinatory treatment
of unrealized capital gains is also
calculated to pauperize the.
retiree, whose sole weapon •
against inflation (4% p.a. and
"Members vote themselves 50%
salary increases" etc.) is through,,
capital gains.
It should be remembered that
it was this same group of people
on fixed incomes which paid for
two World Wars. Now ,. having
had a few years to recoup their
fortunes, they are to be savaged
again, avid their sole remaining
method of keeping abreast of
galloping inflation is to be
removed. The only concession is
a $500 exemption for those' 70
years of age and over, which
compares with American
practice whereby there is no tax
on Old Age Security, for which.
the Canadian will subscribe until
he is buried.
This system of milking the
unrealized capital every five
years will result i in the
destruction of any capital
accumulation by the individual;
the Government will take it all
on the flimsy excuse that it is a
real capital gain. It means
curtains for small business; for
mining. and mineral exploitation;
for persons on fixed incomes.
Speaking academically, what
manner of man could suggest, in
all honesty, that a tax on an
unrealized increment in the
value of a share of stock, ,could
do less than kill the goose that
used to lay the golden eggs. Pit
the certainty of this
giuinquennial curse against the
vagaries of the stock market
values, inflation, supply and
demand, the lottery of
government whim and a hundred
and one other variables, and you
cannot but feel that the brajn
behind this Paper should be
donated to "medical science for
dissection to —"discover what
extraordinary chemical , action
produced such a strange
reaction. Mankind might then
reap some benefit from this
extravaganza.
Perhaps the best thing would
be for Mr. Benson "to go to his
room," forget Carter, remember
the reaction which' follows any
action, and come up with a
proposal which Canada can
afford and which affords Canada
a chance of 'developing.
Meanwhile, we await Benson's
Second Coming, but don't forget
youhaven't begun to deal• with
"Uncontrollable Charlie's". first
coming yet, and he is in the first
flush of a fifty percent salary
raise.
Note: Figures in brackets refer
to paras. in the Paper. Send for
your copy from the Taxation
Dept. Kitchener. Fjee. You've
already paid for it.
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