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

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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

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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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