The rich say boosting the capital gains tax will hurt productivity, but it’s just not true. Time to do a little myth-busting

Posted on June 17, 2024 in Equality Policy Context

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Most academic economists support a higher inclusion rate, partly because it levels the playing field between different types of capital income. But the best motivation is $20 billion in revenue it will raise over five years, to support modest new programs announced in this budget. This will help fund school lunches, affordable housing initiatives, dental care and disability benefits — while still respecting Freeland’s fiscal “guardrails.”

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Child & Family

Ontario expanding jails by several hundred beds to deal with overflowing institutions

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As of September 30, 2023, there was an average of 8,889 people in provincial jails, well over the 7,848-person capacity. Overall, the jails were operating at 113 per cent capacity at that time. Premier Doug Ford pledged in March to build more jails to deal with an influx of inmates, the vast majority of whom are innocent and awaiting trial. Ontario will reopen two intermittent detention centres inside Toronto and London jails that had been closed in order to add up to 430 beds by 2026.


Seniors’ Care Surge will require Smart Policies

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Among the key recommendations: (i) provinces should invest in public home and community care while also considering mechanisms to expand the private provision of these services; (ii) Ontario and other provinces should consider providing a refundable tax credit for senior renters to access retirement homes and supportive services and; (iii) current capacity and fiscal constraints mean that expanding both publicly and privately funded options will be necessary. 


Education

Nigmendra Narain speaks truth about Ontario’s manufactured university crisis

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ON funding $6000 below national average… this scarcity of university funding… has been completely manufactured by a provincial government bent on ‘saving tax-payer dollars’ by downloading costs onto individuals while encouraging public-private partnerships… Ontario’s ratio is currently 34 students : 1 professor. Contrast that with the rest of Canada averaging 23 students : 1 faculty.


Province urged to take time to rethink flawed post-secondary education bill

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Bill 166 is being touted as a potential law to improve transparency and student mental health, and to combat racism and hate on the province’s post-secondary campuses… The provincial government is using a manufactured crisis as an excuse for increased ill-informed ministerial interference… What we do need is a real solution to the real crisis created by government through more than a decade of funding cuts and squeezes.


Employment

International Monetary Fund paints a rosy picture of Canada — maybe the country isn’t broken after all

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The IMF says Ottawa should seek additional revenue sources to reduce its reliance on deficit financing. It suggests raising the federal portion of the GST, as this space earlier advocated in also calling for a higher OAS eligibility age of 67… removing interprovincial trade barriers would boost the Canadian economy by about $80 billion a year… The IMF urges Canada to resume provision of social housing, a field Ottawa abandoned in the 1990s with disastrous consequences.


Years of corporate handouts achieved nothing. It’s time for something different

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… corporate subsidies – either through tax incentives or direct funding and loans – now equal about $50-billion per year. That is slightly over one-half of the total amount of corporate taxes collected by the federal government and almost as much as they spend on health care.  only 20 per cent of these business subsidies aimed at increasing productivity actually boost real income for Canadians. The other 80 per cent are not only ineffective but have to be paid for by either more taxes or by decreasing spending on other priorities.


Equality

The rich say boosting the capital gains tax will hurt productivity, but it’s just not true. Time to do a little myth-busting

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Most academic economists support a higher inclusion rate, partly because it levels the playing field between different types of capital income. But the best motivation is $20 billion in revenue it will raise over five years, to support modest new programs announced in this budget. This will help fund school lunches, affordable housing initiatives, dental care and disability benefits — while still respecting Freeland’s fiscal “guardrails.”


Pierre Poilievre’s vision for Canada: Heaven for the very rich and squat for everyone else

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… the real redistribution in recent years hasn’t been the small bit directed toward benefits for ordinary Canadians but rather the gush of money toward the wealthiest Canadians. In 2021, the richest .01 per cent saw their incomes grow on average by a stunning 30 per cent to $12.5 million a year, while the incomes of 14 million working Canadians actually declined, according to Statistics Canada.


Health

Convenient access to alcohol is going to cost us

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… while alcohol sales in 2020 put $3.2 billion into Ontario’s coffers, they came at a cost of $7.1 billion. That left the province with an alcohol deficit of $3.9 billion. Health care accounted for $2.3 billion. The rest went to servicing alcohol-related criminal-justice and lost production costs. These figures reflect a deficit capped by the limited number of LCBO and Beer Stores, a limit that will soon cease to exist.


Ontario’s health-care system is in crisis. More privatization isn’t the answer

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We know that private, for-profit chains will come to dominate our health-care system if we let them. It’s already happening. That’s a recipe for poorer services, higher costs, and worse outcomes. We could achieve better results for less by removing the profit motive and focusing on community clinics run on a not-for-profit basis… instead of headed and run from a distance by some faceless, profit-maximizing firm.


Inclusion

With disability benefits, governments cannot get lost in complexity

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The purpose of the CDB is to protect people with disabilities from poverty. The application process should strive to make it easy to identify the people who need this protection… Developing this new benefit will no doubt raise difficult questions about definitions of disability, jurisdiction, and how different programs interact with each other… But they are not impossible. They are not an excuse for doing nothing.


Here’s how Ontarians on ODSP are trying to make ends meet

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… the low social-assistance rates in Ontario… are forcing recipients to earn money however they can. Living in what disability activists frequently refer to as “legislated poverty,” these recipients often drain their savings, borrow money from friends and family, or even consider taking their own lives… Programs like the recently unveiled Canada Disability Benefit, or even the Ontario government’s decision to index ODSP to inflation, not only don’t keep pace with the past few years of inflation — they barely address decades of stagnant earnings.


Social Security

Basic Income for a New Model of Canadian Social Democracy

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Basic income is a paradigm-shifting idea on how to ensure economic security for everyone… Now is the time for the democratic left in Canada to develop a workable and comprehensive version of basic income as a key policy instrument, and not a sideline consideration. Canadian social democrats should incorporate the principle of guaranteed, unconditional and universal economic security as a fundamental program for its vision a better society.


Warning signs: Poverty in 2022

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Pandemic-related modifications to EI, the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit, all ended during 2022… Recent investments, such as the Canada Disability Benefit, may help when the money finally gets to those in need some time in 2025, but the size and reach of the benefit is too low to have a significant impact on poverty rates.   


Governance

Doug Ford has bungled affordable housing and now Ottawa is rubbing his nose in it

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The federal government now says it will send funding directly to municipalities, cutting Ontario out of the equation entirely… Why can the two levels of government come together to build subsidized factories, but not subsidized housing? … Ultimately, the friction over funding may have less to do with personalities than priorities. In Ford’s Ontario, unaffordable factories count for more than affordable housing.


We are rich Canadians and we support higher capital gains taxes

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Ottawa wants to raise taxes for Canada’s ultra-rich. Rich people like us want that, too… with 1 per cent of the country’s residents holding over a quarter of all wealth. We need higher taxes to level out this rising wealth inequality… to fund new spending on priorities like Old Age Security, clean economy, medical care, child care, and housing, but it doesn’t go far enough to address class distortions… we’d also like to see a “super wealth tax,” an inheritance tax, and progressive property taxes