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Saving you money – Protecting your rights - Untangling spin

Taxpayers' anger simmers after botched hockey bailout

Friday, September 5, 2008
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Advice to the federal cabinet: watch out for oversized taxpayers threatening to leave the country and hold those high-end handouts

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By: Linda McQuaig Linda McQuaig

  If there's one lesson Ottawa should learn from its hockey bail-out debacle, it's that ordinary Canadians aren't very sympathetic to the plight of these big guys. For months, we heard about how NHL hockey teams would have no choice but to pack up and leave if the Chretien government didn't cut their taxes.
  So the government, never good at resisting a plea for help from the strong and the powerful, gave in. But it immediately ran into a wall of protest from Canadians enraged at the thought of tax cuts for millionaire hockey-club owners and players.
  This could be seen as a practice-run for the upcoming budget. Like the hockey owners, business leaders have been pushing vehemently for tax cuts, and threatening to leave if they don't get their way. And like the hockey owners, these well-heeled business types arouse little sympathy among hard-pressed Canadians struggling to make it on their own in the global economy.
  The Business Council on National Issues has been calling for major income tax changes, such as eliminating the high-income surtax and reducing taxes on capital gains. The BCNI's proposals would result in massive savings for high-income earners.
  Calculations done by the Canadian Labour Congress show that, under the BCNI proposals, someone earning $250,000 a year would save almost $11,000 in taxes.For the extremely rich, the benefits of the BCNI plan would be even more generous. The proposed change on capital gains taxes alone would, for instance, save Royal Bank chairman John Cleghorn $200,000 on his 1999 tax bill. And Matthew Barrett, former chairman of the Bank of Montreal, would be able to cut his tax bill by close to $1 million.
  Needless to say, the savings would be an awful lot smaller for those at the lower end of the income scale. In fact, for someone earning $25,000 a year, the total annual tax savings under the BCNI plan would be - are you ready? - $3. That's right - a toonie and a loonie. Go buy yourself a bag of chips, and keep the change.
  And for those with incomes below $20,000, the BCNI's plan would offer ... well ... nothing. Sorry, we'd love to help but, you know, hard times - low productivity, the global economy - we'll get back to you.
  If Ottawa thinks it can get away with this sort of thing in the upcoming buget, it might be wise to remember recent polls by Ekos Research showing that only 3 per cent of Canadians favour tax cuts for high income earners.
  Or if it wants a more vivid illustration of the point, it might do well to just think back to the hockey bail-out fiasco. The Bay Street boys clamouring for tax relief now aren't that different than the hockey boys clamouring for tax relief last month - except they don't wear helmets and have lots more teeth.

Linda McQuaig is an economic journalist and author of many books, including Shooting the Hippo and The Wealthy Banker's Wife. She currently writes a biweekly column for the National Post. This commentary used by permission of Linda McQuaig and CBC radio.

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