A quick guide to
fast write-offs

Purposes, business-
mitted man

ons tha ‘many exemp-
eamer. t are denied the wage-

For tax

ek are per
1

One of :
Or, as th them is depreciation—

€ income t.
calls. j C ax department
it—capital cost allowance

—~Oor Write-off.
- And n
the fast write-off. ow we have

ro i
: aus businessman’s point
a TF he ereciation makes
Michine € buys a building, a
tal oe ae truck, that’s a capi-
ie. iture (an addition to

Sets
xpensec and not an expense.

and » Such as rent, wa
deduetey {0° that truck’ can “be
he caleula rom his profit before

OWever, tha

machi
asset chine

co ) depreci
Mes © legs ve Rae

ear and
Obsolesce
n
0% a year, c

(or
be-
through
by, say,
nethods of (There are several
tion Oth calculating deprecia-
Per year , 2" by percentage
allows sen the government
Purposes. 1S method for tax

At 10
Preci a $1,000 machi =
he by $100 the ieee
‘ ee year, and so on,
a St valuable service

hisses...

Sidere depreciation is then con-
dedu N expense and may be
8 Profit before cal-
of the 4 because that

achine j i
0 have bea 1S consid-

e
the cha depar

i grin
ists, make

N used up.

- tment, much to
. 8ccounting pur-
Sit possible to write

es *
Committee ‘al House of Commons
on ond prices. seems
Ms P various cans
Proceeg, *S their investigation
Price ‘i ut Meanwhile the
Steadily. od Continues to climb

0 Statistics Can-
in the Toronto

: : est prices in
anu, 7% high

higher, we Pork ee nae

have fish and 3 high-

@ j n
187, Meteased 179 sin ries

Back
Spec;., &t the .
Wag = Commit peatines of the
Presiq ra by ee
filets we the Grocer aoe’
Ee een acturers of ees
Fe Bae that the Serarne
Conant » CONnsider “income
food 5 sos than price
Ho etices eee of keeping
Pathe, this wo;
| Teal mae tinteligi help seems
| Wa at of €, but the

Steele’s remarks
© companies

eq i : ; » said

Writ Ss ij willing to
e 1

teeg: Nese 1 Profits to under-

diy, throug, ("come guaran-

‘dy compat igher taxes. In-
leyeg Od try to.) WOuld in all
Bes ° maintain profit

they’re in the

& add
Prise, ed to no

Other aad Consumer
erds, any benefit

“onsumer would

y Swallowed

seo get in one
- Nave a gnaw-
2 10), that none
hc Said

» Which represents

off a machine in fewer years
than it takes to wear it out.

This, says the government,
stimulates business by encourag-
ing the purchase of new ma-
chinery sooner than would
otherwise be the case. What this
does, too, is give business addi-
tional profit because it can
charge this exaggerated depre-
ciation as an expense, deductible
from profit. Picture an outfit like
Massey-Ferguson with its inter-
national banks of machinery en-
joying this tremendous write-off.

The latest move (promised last
May and scheduled to be voted
on in Parliament any day now)
is to introduce fast, two-year
write-off, thus permitting mono-
polies gigantic tax exemptions
for expenses which they have
not yet incurred — won’t incur
for years. In other words—in-
stant profits.

This way the monopolies pay
even less of their share of the
tax load — and the people pay
more.

A story carried by Nippon
Steel News in July 1972 describ-
ing the success at Nippon Steel’s
Kawasaki Works in _ chasing
pigeons away with a recording
of crows cawing has had inter-
national repercussions.

More than 200 letters from
over the world have been receiv-
ed asking for phonosheet copies
of the recording, and many reci-
pients have followed up to re-
port they also have met with
success,

re

spending abroad far more

of 25 billion dollars a year.

THE MONEY CRISIS

—\

oly pricing push-

This has two rather obvious effects. First is
that the excess money generated by the U.S.
shows up in other countries and imposes infla-

es there, rather than in the U.S. itself. The

Exchange market anarchy

By EMIL BJARNASON
The second of three articles

Proponents of Nixon’s policies hold that
foreigners lost confidence in the U.S. dollar
because its value was undermined by domes-
tic inflation in the United States. Therefore,
the remedy is to restore confidence by reduc-
ing the rate of inflation. Further, they hold that
inflation is caused by monop
ed by excessive wage gains. Therefore, the
cure for inflation is to stop prices and wages
from rising, by administrative controls.

The irrationality of this approach is imme-
diately apparent when one observes that the
rate of inflation has been consistently higher
in Germany and Japan — the countries with
strong currencies—than in the United States.

This has been and continues to be true in
spite of the fact that U.S. government policy
is the biggest cause of inflation everywhere.
Since the nineteen fifties, the U.S. govern-
ment has been spending more than its income,
largely for military purposes and: subsidies to
monopolies. The difference between income
and outgo has been covered by the printing
of money — inflation, pure and simple.

But simultaneously, the U.S. has also been
than what it re-
ceives from abroad. The difference — called
the balance of payments deficit — is made
up of an excess of imports over exports, gov-
ernment loans and subsidies to friendly or
dominated states, and the investments of U.S.
“international corporations” in foreign coun-
tries. This deficit, more or less steadily grow-
ing, has reached the proportions, under Nixon,

ates anarchy

other is that tremendous accumulations of
U.S. dollars have appeared in foreign coun-
tries. These accumulations, referred to as
Eurodollars, are now estimated at over $75-
billion. At least half of this amount is in
private hands, largely in the hands of foreign
branches of U.S, international corporations.

By the ordinary rules of capitalism, every
holder of money seeks to use it profitably.
If he believes that German marks are going to
rise in value relative to the dollar, simple
business prudence will cause him to switch
to marks. If the rate of interest on money is
higher in France than in England, ordinary
horse sense will lead the holders of money
to transfer it to France. These motives tend
to affect all sneculators simultaneously. Thus
the simple, old fashioned profit motive gener-
in the
market, in the face of all the government
regulation and control which for the past
generation was believed to have overcome
the contradictions of free enterprise.

Nixonomics did not cure inflation in the
USA. The rate of increase in the Consumer
Price Index fell off a bit, but this is decep-
tive. Prices reflected: in the index were held
down, -but the excess money generated by |
Nixon’s policies simply asserted itself in other
areas. Canadian lumber exporters, for exam-
ple, have experienced a 100% increase in the
price received from the U.S. market during
the period of the so-called freeze.

Nixonomics put heavy penalties on imports
into the U.S. and subsidized exports. None-
theless, the trade deficit increased. A country
which had not experienced a commodity
trade deficit for 80 years suddenly found it-
self buying $5-billion more goods than it sold
— precisely in the period of controls designed
to produce an export surplus.

international money

Food corporations ‘innocent’

or awenssssse tee

dairy processors, but not farm-
ers.

The dairymen said a “whole
host”. of new government regu-
lations applying to food quality,
in-plant safety, labelling of pro-
ducts and industrial pollution
has contributed to rising costs.

The arrogance of the food in-
dustry was shown by the presi-
dent of the Canadian Food Pro-
cessors’ Association, L. H. John-
ston, who refused to give mem-
bers’ sales figures to the special
committee.

Lobby Group

This was too much even for
the Liberals and Tories. Allan
Lawrence (PC), said Johnston’s
inability or refusal to divulge
figures makes _ it hard for the
public to take seriously the food
industry’s claims that it faces
“keen competition.” And James
Fleming (L), called the associa-

TRIBUNE PHOTO

tion, which represents most ma-
jor Canadian processors of fruit
and vegetables “just another
lobby group.”

Committee member Grace
MacInnis (NDP) presented the
real picture. During the most
recent fiscal years available, Do-
minion Stores showed profits up
188.0% over the previous year,
Steinberg’s profits: up 47.4% and
Oshawa Wholesale up 24.6%.

The Canadian Grocery Dis-
tributors’ Institute, grouping big
supermarket chains and small
independent food retailers across
the country, when confronted
with the figures, asked the com-
mittee to realize their members
do not ‘make the prices.”

Well, somebody does, but it
certainly isn’t the shopper, who
sees his food bill spiral up every
time he visits the local super-

market.

The Canada-USSR_ Associa-
tion announces that organized
groups in cities across Canada
have responded favorably to the
holding of a conference to pro-
mote Canada-USSR amity.

The conference will be held in
Toronto on the weekend of
March 24-25, 1973, at the Can-
ada-USSR Association Centre,
55 Bloor St. E., suite 404, in the
heart of central Toronto.

“We believe that you share
our conviction that the holding
of such a conference is an ur-
gent need,” says the Association
announcement, ‘‘and that it will
be an advantage for all to meet
together, exchange experiences
and plan united efforts to ex-
tend the scope and effectiveness
of our common purpose.”

The conference takes place in
a period ripe for the extension
of such activities. The signing of
accords between the Govern-
ment of Canada and the Union
of Soviet Socialist Republics,
has created a new climate. More
and more Canadians in English
and French speaking Canada are
indicating readiness to appre-
ciate the value of increasing
understanding and promoting
normal relations between our
two countries.

The organizers foresee in the
conference deliberations and
proposals, the formulation of a
program for future work, adop-
tion of a constitution and elec-
tion of a Council and Executive
Committee.

Association’s Activities

The Canada-USSR_ Associa-
tion was formed more than a
decade ago. At that time, mem-
bers and friends of the Associa-

tion were convinced that the
achievement of normal relation-

ships between the people of
Canada and the people of the
Union of Soviet Socialist Repub-
lics was in the interests of Can-
ada and the cause of world
peace. The conviction has been
confirmed by the signing of ac-
cords between Canada and the
USSR.

Aims and objectives stated by
the Association include extend-
ing and strengthening ties of
friendship and understanding
between citizens of Canada and
citizens of the USSR, and the
provision of information on all
aspects of Soviet life, as well
as the promotion of knowledge
of Canada among organizations
with comparable aims in the
USSR.

The encouragement of cultur-
al exchanges between the two
countries, and making available
to Canadians, Soviet films,
books, and exhibitions, are part
of the work of the Canada-USSR
Association.

+i

a

PACIFIC TRIBUNE—FRIDAY, MARCH 16, 1973—-PAGE 9