CANADA

_ Tories’ tax reform
favours the wealthy

By MARK SYDNEY

When just about the only person
in Canada (other than the Tory
government) to flatly endorse the
Dec. 16 federal “tax reform pack-
age” is John Bulloch, Canadian
working people, and especially the
poor, should know they are really
being shafted.

Bulloch, president of the right-
wing Canadian Federation of
Independent Business, praised a
tax package which he clearly
understood suited Canadian cor-
porate interests to a tee.

The general federal corporate
tax falls to 28 per cent; the small
business tax rate drops.to 12 per
cent; while the rate for manufac-
turers drops to 23 per cent by 1991.

For ordinary Canadians the pic-
ture is not as rosy. Although
Finance Minister Wilson claimed
that the “average household” will
pay about $500 a year less than it
did prior to the introduction of the
new package, mainly through new
tax credits, the impression of fair-
ness he gives is entirely misleading.

First, the package stands the
principle of progressive taxation
— the more you make, the more
taxes you pay — on its head. Wil-
son’s principle appears to be the
more you make, the bigger tax
break you get. In other words, the
are rich rewarded, the poor are
penalized.

A family of two wage-earners
and two children, with a combined

‘income of $30,000, it is claimed,
will reap a net savings of $490
thanks to the new package. Mean-
while, a similar family with a com-
bined income of $70,000 will save
about $1,100.

In percentage figures, the bigger
tax break gained by the high-
income famly is even more reveal-
ing. According to Nate Laurie of
the Toronto Star, Wilson’s tax
reduction for those in the $75,000
range is equivalent to an increase in
income of 1.7 per cent. For the
$30,000 a year family, the increase
is about 0.7 per cent.

The supposed $490 saving is
also, as NDP leader Ed Broadbent
pointed out, a “cruel hoax.” Not
only progressive, but even conser-
vative economists find the Wilson
rhetoric hard to swallow. Com-
menting on CBC radio after the
package was presented, a Van~-
couver economist with the char~
tered accountants firm, Price~
Waterhouse, pointed out that even
with the “saving,” the average
Canadian working family will be
paying about $1,000 more in fed~
eral taxes tharit did in 1984 when
the Tories took over.

The rich are also rewarded
through the phasing out of the 10
existing income tax brackets to just
three brackets — 17 per cent on
the first $27,000 in taxable income;
26 per cent on the next $27,000,
and 29 per cent on all taxable
income above $55,000.

The 29 per cent is a drop from 34
per cent. As Terry Hunsely, execu-
tive director of the Ottawa-based
Canadian Council of Social De-
velopment noted, this change
means sizeable tax breaks for peo-
ple with taxable incomes over
$55,000. The main beneficiaries of
this “tax reform” will be wealthy
Canadians who get most of their
income as salaries.

Although Wilson claimed that
the changes will “reduce by one-
half the number of profitable cor-
porations that pay no tax,” about
60,000 profitable corporations will
still not be paying one cent in taxes.
Asked why in the House, all the
finance minister had to say was
that many are “companies that
have lost money in the past.”

There is no doubt that banks
and financial institutions will have
‘to pay more under the new pack-
age.
around is about $4 billion over the
next five years. Yet no one should
shed any tears: prior to the
“reform,” financial institutions
paid less percentage-wise on their
financial statement income than
any other sector of Canadian
business — slightly under 15 per
cent — and reaped windfall prof-
Its.

To enable the financial sector to
make up the expected shortfall,
- Canadians can look forward to
seeing the cost of insurance
policies — and along with them,
probably bank service and other
charges — go up in 1988. In other
words, any possible increased
income accruing to a Canadian
family from tax breaks will proba-
bly be swallowed up by higher pri-
ces and charges in other areas.

The new corporate taxes are
expected to bring $5.5-billion in
additional taxes into the federal
coffers over the next five years.
Meanwhile, corporate tax loop-
holes are estimated to cost the fed-
eral government several times that
much every year.

Furthermore, over the next two
years, corporate taxes paid to the
federal government will in fact
decline in absolute value, while the
amounts raised through personal
income tax will continue to rise. As
a ratio of one to the other, personal
income taxes will be higher as well.
In 1988, according to the federal
Department of Finance, personal
taxes will bring in slightly over $2
billion, while federal corporate
income tax will bring in half a bil-
lion dollars, or a ratio of just over
four to one. In 1989, personal
income taxes will bring in about $2
billion, while corporate income
taxes will fall to about $400 million
or an even higher ratio of over five
to one. Individual working Cana-
dians will be paying the federal
government five times more than
wealthy corporations.

Even in 1992, according to the
government’s own figures, per-
sonal income taxes will still bring
the federal government 50 per cent
more than will corporate taxes.
Furthermore, the lion’s share of
those personal taxes will be paid by
low and middle-income families,
thanks to the cuts in taxes on
higher incomes mentioned above.

This is not a tax package Cana-
dians can really look forward to.
And looming in the wings is a sales
tax on all goods and services
— including food — which the
Mulroney government is expected
to introduce as part two of this
“tax reform.” The Tory tax
schemes will reduce the living
standards of working Canadians,
while letting the big business and
the wealthy off virtually scot-free.

6 e PACIFIC TRIBUNE, JANUARY 13, 1988

The figure being tossed —

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choice.

media.

Canadians to be polled
on cruise testing

TORONTO — The Canadian Peace Pledge Campaign is call-
ing on peace groups across the country to get ready in advance
for actions on the days the Cruise missile tests will be resumed.

_ According to PP spokesperson Sheena Lambert, the cam-
paign is asking peace groups to hold street ballots, putting up
polling stations on the test days to ask passers-by whether they
favour Cruise testing on Canadian soil. On the ballot will be one
single question: ‘‘I think Canada should stop testing the Cruise
missile, and start testing what it can do for world peace.’ There
will be a Yes box and a No box so the voters can indicate their

The peace groups will be asked at the end of the day to call in to
the PP office with the results, which will then be released to the

Peace groups are urged to prepare the action now, said Lam-
bert, because the Canadian government gives only 48 hours
notice before the test gets underway.

Kashtan to step down
as CP general secretary

=

TORONTO “The times
favour change, and the Com-
munist Party is trying to be in tune
with the times,’’ William
Kashtan, general secretary and
leader of the Communist Party of
Canada, told a press conference
here Jan. 4 explaining his decision
not to stand for re-election to the
two posts at the party’s next con-
vention.

There have been some tre-
mendous changes in the world
and in Canada during his 22 years
as leader of the Communist Party,
said Kashtan. Two treaties have
just been signed, with very oppo-
site significance. One, between
the USSR and USA, will lead to
the destruction of medium-range
missiles and to greater world sec-
urity. The other, the free trade
deal between Reagan and Mul-
roney, could well be Canada’s
death warrant:

The USSR is going through
some very great changes. Peres-
troika and glasnost, which our
party welcomes, have broadened
the perspectives of revolutionary
development; there is more
openness in the USSR. ‘‘What
Communists and Canadians in
general are seeing is a new image
of Socialism, a different image
than they saw in the past,’’ he
said.

Federal Election Looms

Also, with a federal election
looming either this year or next,
“the Communist Party needs a
younger person as leader, a per-
son with more energy, to advance
policies,’ the CP leader, 78, told
the press.

“It is time to make changes,”’
said Kashtan. For these reasons,
he recommended to the party
executive, and confirmed by the
party Central Committee, that he
not seek re-election. Kashtan also
recommended — and the CC
concurred — that George Hewi-
son, currently labour secretary of
the Communist Party, and labour
columnist in the Tribune, be con-
sidered as his replacement by the
27th Convention of the Com-
munist Party, which meets at the
end of May.

WILLIAM KASHTAN

No Policy Changes

“What I proposed, and which
the Central Committee agreed
to’’, said Kashtan, ‘‘were
changes in personnel, not
changes in our policy. Our policy
is based on the Road to Socialism,
the program of the Communist
Party, and the draft policy that
will be discussed and adopted by
the 27th Convention.”’

Stepping down as party leader
and general secretary, the CP
leader continued, does not mean
an exit from Canadian politics or
from activity at the highest level
within the party. “‘I still hope to

play a role as far as my strength

and ability permit,’’ he said.

The Central Committee, at its
meeting last December, concur-
red with this assessment, and re-
commended that William
Kashtan be named chair of the
CC, a post that the party conven-
tion in May will be asked to
create.

Party Getting Younger

Queried about his years of
leadership, Kashtan said they
have been very rewarding. ‘‘I saw
my main task as keeping the party
united, keeping it going’, he said.
“The party is now getting
younger. For a period we seemed
to be at a dead end ... at a
standstill, but that has changed’’.

What is happening within the
Communist Party at present, said
Kashtan, ‘‘is merging of the youth
and older people’’. During his
period of leadership, he said, the
party has fought against free
trade, for peace and peaceful
coexistence, on the national ques-

tion for recognition of the rights of
the people of Quebec, for eco-
nomic policies that will benefit the
working people, for Canadian
independence and sovereignty,
for a sovereign and independent
trade union movement.

Pioneering Policies

“Time and again, we (the
Communist Party) have been

pioneers on questions others are —

not yet prepared to fight for’’, said
Kashtan. Many of the issues the
party once campaigned for as a
lone voice in the wilderness have
since been accepted by the Cana-
dian people, ‘‘unfortunately we
are not yet the beneficiaries of it,
but we take a long point of view’’,
he said.

Kashtan told the media that the
Communist Party is really within
the mainstream of Canadian polit-
ical thinking. ‘‘Our view appears
to be like that of the majority of
Canadians — we are opposed to
the policies of the Mulroney
government.”’

Free trade, he said, is not sim-
ply the economic sell-out of
Canada to the U.S. by the Tories,
but the political sell-out of Can-
ada as well. Our country’s
sovereignty and independence
are at stake. ‘“This is why we and
others oppose the deal’’, he con-
tinued. “The signing of the ag-
reement Jan. 2 doesn’t close the
door; the battle against free trade
will continue and. is going to
widen’’.

50 CP Candidates

Free trade will be a major issue
in the coming federal election, in
which, Kashtan said, the Com-
munist Party will be fielding at
least 50 candidates. ‘‘A growing
body of Canadians,’ he .con-
tinued, ‘‘will compel the Tories to
withdraw it, or face defeat at the
polls.

“It is important that the party
run candidates because there has
to be a voice that is clear and
loud” in support of the genuine
interests of Canada and the Cana-
dian people, Kashtan said. ‘‘We
are concerned about developing
alternative policies, which are
certain to prevail’’.

— M.S.

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