Higher taxation is back on the table

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TheGlobeandMail.com – news/politics
Published Tuesday, Oct. 25, 2011.    Lawrence Martin

One of the big successes of the Conservatives has been their demonization of taxation.

Old-time Progressive Conservatives weren’t so inclined, but the Stephen Harper breed learned the art from Republicans south of the border. The neo-cons’ anti-tax campaign spooked the opposition parties. When Michael Ignatieff once hinted he might raise the GST, they practically billy-clubbed him to death.

The GST? If team Harper had kept it at Brian Mulroney’s seven per cent level, the big deficit the country faces today would not exist. It would only be a small fraction of what it now is.

Enter Brian Topp, the NDP leadership contender. At the risk of being deported for treason, he came forward last week to advocate for higher taxes. More on wealthy individuals, more on corporations, perhaps even a hike in the GST – something Jack Layton wouldn’t even touch – down the line.

Predictably, Jim Flaherty blew a gasket. The Finance Minister can be surprising at times, an example being his recent Kennedy era-like call for students to pursue careers in the public service. But the moment the NDPer’s words hit the airwaves, Gentleman Jim’s knees started jerking. He scoffed at the notion of more taxes on the rich, saying it wouldn’t bring in significant new revenues. He sounded like their courtier.

Mr. Topp wasn’t trying to suggest a levy on the well-to-do would cure the deficit. He was speaking about social justice. He was speaking about ludicrous levels of executive compensation, about the craziness, as Warren Buffett put it, of zillionaires paying lower tax rates than their secretaries, about loopholes and havens wherein the rich hide their fair share, about corporations whose tax rates get lower and lower and who do not invest the proceeds.

Social justice is not a phrase to which modern-day Conservatives are winsomely attracted. But they might do well to pay heed. Both here and abroad, the climate is changing.

Mr. Topp spoke out after U.S. President Barack Obama brought forward a tax-the-rich scheme in the United States. The tax breaks of the affluent class are becoming an issue everywhere. Debts and deficits, which were accrued in good part because of ideologically inspired tax-cutting, have reached threatening levels. As the global downtown drags on, the ever-growing income gap between haves and have-nots is being showcased. Economic nostrums such as deregulation are increasingly being called into question.

The Milton Friedman foundation, from which the past three decades of economics have taken their cue, is on shaky ground. It took a long run of economic anguish through the 1970s to trigger the last great change in the economic belief system. It is far from certain, but the long run of wreckage being witnessed now may result in another great turn, one that would favour a party like the New Democrats.

As the official Opposition party, the NDP for the first time has a megaphone. When the party speaks of social justice, it no longer speaks from the margins. Interim leader Nycole Turmel is not a strong performer, but in Mr. Topp, in Thomas Mulcair, in Peggy Nash and others they have an impressive set of leadership candidates who are unflinching. Throughout the recent downturn, the Conservatives have had the great cover-all rationale working for them, it being that Canada isn’t doing as badly as other countries. They trumpet the splendid economic fundamentals, many of which – an example being the regulation of the financial sector – were put in place by previous governments.

While the country is doing better than others, the New Democrats have no shortage of ammunition. A society in which the gap between the wealthy and the rest is continually widening is a retrogressive, not a progressive, society.

In contrast to their southern neighbours, Canadians have a history, until recently at least, of accepting higher taxation levels as the price for a more just and egalitarian society. Mr. Topp and his fellow travellers must remind them of that.

The Conservatives will whack them hard as they did the Grits, but it will be more difficult this time. The zeitgeist is no longer with them.

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