A Primer On Trump's Mendacity

You probably don't need this, but it is an incisive analysis of the multitude of lies that permeated Trump's State of the Union Address.

Seeking Some Substance - Part 1

In yesterday's Star, Christopher Hume had occasion to call Prime Minister Trudeau the princeling practitioner of the politics of appearance. In light of an alarming shortfall in revenues that is crippling our services thanks to the government's anemic corporate tax policies, that struck me as a particularly apt description.

Indeed, that element of his persona was very much on display for the world to see last week at Davos, where Mr. Trudeau had some stirring words :

"Too many corporations have put the pursuit of profit before the well-being of their workers … but that approach won't cut it any more," Mr. Trudeau told the elite gathering at the chic ski resort of Davos. "We are in a new age of doing business – you need to give back."

Apparently, however, that sternness of tone seemed more designed for public consumption than real-world application. If that is not the case, one has to wonder why Canada appears to be very soft in the corporate taxation department:

In a joint investigation with Corporate Knights magazine, the Star last month revealed the government has never collected a lower proportion of its taxes from corporations than it does now.

In 2016, Ottawa collected $3.50 in income tax from individuals for every $1 it collected from businesses.

The foregone tax revenue is significant:

The Star/Corporate Knights investigation revealed that Canada’s 102 largest corporations collectively avoided $62.9 billion in income taxes over the past six years. On average, that’s $10.5 billion less per year than if they paid the official corporate tax rate.

It’s also an average of $100 million missing from the public purse per company, per year.

So what is to be done about it?

Well, first off, they can start by emulating other countries that have thus far recovered $500 million in unpaid taxes thanks to revelations from the Panama Papers.

The Panama Papers have proved a treasure trove for some countries, with Spain recovering the most unpaid tax so far. Its national revenue agency announced in November a $156-million windfall from taxpayers with hidden funds. Most of that — $128.4 million — came from voluntary disclosures, where the taxpayers came forward themselves following the leak to declare previously unreported income.

The Australian Tax Office said last month it has collected $49 million thus far as a result of the Panama Papers revelations. Australian tax officials snapped to action following the leak, executing 18 search warrants in just a one-week span in September 2016, at one point seizing 170 kilograms of silver bullion and coins.

Even Ecuador, which historically has had problems collecting tax from its citizens, says it has recouped $82.6 million.

Perhaps, not surprisingly, Canada has recovered nothing:

The Canada Revenue Agency maintains it will be at least another 2½ years before it will have an idea of how much it might recoup.

The stark contrast is fuelling criticism of the CRA's effectiveness at catching offshore tax cheats, and comes in the wake of a CBC investigation last month that found few, if any, of the criminal convictions the agency cites in defence of its record actually have anything to do with offshore tax evasion.

In fact, that investigation revealed that small businesses are the most likely targets of CRA wrath:

... Canadians convicted of tax evasion over the past two years are far more likely to be tax protesters or small business people who failed to declare all of their income.

And to make their statistics look better than they are, the CRA

counted each article of the law as a separate conviction.

For example, in the case of New Brunswick-based George's Heating and Plumbing, the agency counted two charges against the business as separate convictions, in addition to the convictions of five employees for having treated personal expenses as business expenses. While they were all part of the same case with the same court file number, on the CRA's list they counted as seven of the 78 convictions.

There is every reason to believe that the hands-off approach to corporate malfeasance, perfected during the Harper years and instilled as an operating ethos in the CRA, is alive and well; the current government apparently has no intention of changing that.

More evidence of this mindset, as well as the ongoing offshore tax evasion being widely practised by Canadian corporations, and what can be done about it, will be addressed in Part 2 of this post.

UPDATED: Infrastructure Crisis

While I think it is widely known here that Canada has a massive infrastructure deficit to the tune of $123 billion, people are perhaps less aware of the dire situation in the United States, where over 54,000 bridges are literally crumbling.

Why is this newsworthy? Well, in addition to the very real daily risk of injury or death, the American problem also offers a massive opportunity for the notorious public-private partnerships that, while lining the pockets of investors, rarely accrues to the benefit of the tax-paying public.

First take a look at this news report:



A dire situation, no doubt, but one which the Trump administration apparently sees as rife with opportunity:

As President Donald Trump delivers his first State of the Union address Tuesday, pay close attention to his next big priority—an infrastructure plan—which, over time, could eclipse the trillion-dollar giveaway to the rich in the GOP’s just-passed tax plan.

“[The GOP-passed] tax cuts have slowly opened the door to Wall Street, construction giants, and global water companies, who see enormous potential for profits,” wrote Donald Cohen, president of In the Public Interest, an anti-privatization advocacy group. “Some states and local governments have turned to expensive private financing, a.k.a., ‘public-private partnerships,’ and learned the hard way. Private financing often means higher tolls, parking rates, or water fees, lower labor standards, and less public control over decision-making once a project is up and running.”

Informed sources suggest that the Trump will reduce infrastructure budgeting:

... the plan will all but force states and local governments to privatize or even sell off infrastructure. Tax cuts have slowly opened the door to Wall Street, construction giants, and global water companies, who see enormous potential for profits. Some states and local governments have turned to expensive private financing, a.k.a., “public-private partnerships,” and learned the hard way. Private financing often means higher tolls, parking rates, or water fees, lower labor standards, and less public control over decision-making once a project is up and running.

And of course there is no guarantee that any of the private money will be directed toward the crumbling bridges where, unless tolls are imposed, profits would be hard to come by. Schools, water infrastructure and roads offer much greater opportunity.

Lest Canadians feel smug, remember the study that has been commissioned by the Trudeau government into privatization of our major airports.

The virus of neoliberalism is resilient and continues to spread. Unfortunately, there appears no vaccine on the horizon to rid it from our political systems.

UPDATE: The Washington Post has a penetrating analysis of the scam about to be perpetrated by Trump. Here is a brief excerpt:

Let’s be clear on what this kind of public-private partnership isn’t. In normal circumstances, the government decides it needs a new bridge, so it hires Joe’s Construction to build it. But the bridge still belongs to the government; we just have to pay maintenance costs. In the kind of “partnership” the Trump administration wants more of, the government decides it needs a new bridge, so it gives PriveCo Equity Partners a gigantic tax incentive to build the bridge, which the company now owns — and which will charge tolls on in perpetuity. Taxpayers could shell out nearly as much in tax incentives to the private company as we would have spent to just build the bridge, and then on top of that you’ll have to pay tolls to cross it — forever.

Robert Reich On The Universal Basic Income

More and more jobs are fated to disappear, thanks to monoliths like Amazon squeezing out other retail, thanks to autonomous vehicles close to becoming part of the mainstream, and for a host of other reasons. Economist Robert Reich offers a partial answer to those losses, one that I doubt will ever be implemented in the United States:

Be Careful What You Wish For

As you likely know, Jeff Bezos is currently searching for a second headquarters for his company, Amazon. And much to the delight of Ontario Premier Kathleen Wynne and Mayor John Tory, Toronto has made the final cut of 20 cities being considered. Whoever lands the company is promised upwards of 50,000 well-paying jobs as well as bragging rights as a destination city. However, there is a dark side to this ostensible corporate munificence.

Recently, John Starkman wrote a cautionary piece:

Amazon derives its success because of its deliberate Darwinian culture that encourages combativeness and pits employees against each other. It is a fundamentally ruthless and predatory company.

Indeed, if you click on the link embedded in the above excerpt, you will wonder whether the term 'cutthroat environment' does justice in describing the working conditions at Amazon.

It would seem that Amazon cares only about Amazon. It also appears to be a very bad corporate citizen:

The IRS is pursuing the company for allegedly owing $1.5 billion in unpaid taxes, the European Union in October hit the company with a $294 million tax bill, and last month Amazon had to pay $118 million to settle an Italian tax probe.

In response to this article, the always thoughtful Star readers have offered their own insights, two of which I reproduce here:

Thank you, Eric Starkman, for speaking the unspeakable. No, we definitely don’t want Amazon in Canada. The jobs it might bring are not respectful to workers and Jeff Bezos has made it clear he’s not interested in paying taxes and contributing to the communities in which he makes his billions — $2.8 billion in one day and a net worth of more than $100 billion.

His contributions to charities, which only came after public shaming, are a pittance compared to the amount of money he is putting in his own pocket and hiding in offshore accounts.

He has made public statements that “the mission of Amazon is to become not the number-one retailer in the world, but the only retailer in the world. Imagine what that would do to small business. Yes, we would still be able to buy products, all from Jeff, but it would change the fabric of our society. What would our streets be like if there were no small businesses? No more storefront windows to look at, no opportunity to browse, no way to touch the clothes before you buy, no advice from someone who is knowledgeable?

And what would happen to all the people who no longer had an opportunity to put their creativity into their livelihood? I believe this is a greater threat than Walmart and other big-box stores, which have already had a huge negative impact on small business.

And do we really want to put all that power in one individual? Remember, we all vote with our pocketbooks and how we vote makes a difference. I for one am going to think long and hard before I put any more money in Jeff Bezos’s pocket. I hope you do the same.

Robin Alter, Toronto

The history of Amazon’s rise as a powerful online monopoly and its practices are largely unknown to people. What the average person knows about Amazon is an internet retailer that provides cheap goods with fast delivery. However, cheapness and speed come at a cost.

Amazon is not a retailer like any other we have seen before. It is a vast 21st-century digital monopoly that has skilfully manoeuvred around the U.S. antitrust laws and, with a predatory pricing system, spread its tentacles far and deep. Amazon accounts for more than 40 per cent of online retail sales in the U.S., with more revenue than the next top 10 online retailers combined.

Any move that Amazon makes has a long-term strategic element, with the idea of extending its power with little regard to the interest of citizens of the community. No city like Toronto, with caring neighbourhoods and communities, should want an Amazon headquarters in its backyard. The interests of those who advocate for an Amazon headquarters in Toronto are not necessarily the same as the interests of ordinary Torontonians and businesses. People of Toronto should carefully study both sides of the argument and decide.

Ali Orang, Richmond Hill

The allure of a wealth of high-paying jobs is a siren call few can resist. However, as the saying goes, be careful what you wish for. Given what is now known about Amazon, it is advice apparently well-worth heeding.

More Empty Rhetoric

Those of us capable of casting a critical eye on the Prime Minister are well aware of his capacity for rhetorical flourish. Unfortunately, that flourish is often an end in itself. Concrete action and legislative initiatives rarely follow. And frequently that rhetorical capacity escapes him when he has no answer to the question. There were several examples of this last week in Davos. Today's post deals with one of them.

At a press conference in Davos, Switzerland, Thursday, Trudeau suggested that laid-off Sears workers, many of whom had counted on their company pensions for their retirement, fall back on employment insurance and the Canada Pension Plan.

Asked by Globe and Mail bureau chief Bob Fife what his government would do about the fact Sears left its pensions underfunded while doling out millions in bonuses to execs, Trudeau gave a vague response.

"Canada continues to support people going through difficult times," Trudeau said. "Obviously pensioners who face uncertainty need to be supported, need to be reassured. That's why Canada has measures like the Canada Pension Plan, like employment insurance benefits — a broad range of ways we can support people who are facing unexpected downturns or layoffs."

"So nothing is going to happen to Sears," Fife responded.

A followup question was posed, which you can watch below starting at about the 2:25 mark:



The Prime Minister says that the Sears situation doesn't have any easy answers. How about a legislative fix to provide pension protection during bankruptcy proceedings, Mr. Trudeau, so that this sad situation doesn't happen again and again and again?

In Service To The Environment

If you watch this Pepsi 'ad' to the end, you'll see why.



There is a petition you may want to take a look at here.