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Even the Federal NDP Has Some Good Ideas… Really, I Am Not Kidding!

Dominion Tax Law | Calgary, Toronto, Vancouver Even the Federal NDP Has Some Good Ideas… Really, I Am Not Kidding! |

So I am pretty hardcore as a fiscal conservative and pro-entrepreneurship, pro-business economist-type who sees the proper budgetary restriction as “Lets figure out how to balance the budget yesterday, through a combination of spending cuts and tax increases, and then lets see if we can get the overall (HST/GST + income) tax rate down below the FIP…” kinda guy (see BNN interview re the “FIP”). I am also resolutely socially liberal. Partly because I see personal liberty as being the fundamental goal of a free and democratic society, but I also believe that if you have no money because the government took it all, then you are not free.

 

I also do my homework, like reading through individual leadership candidates’ policy platforms and party and convention platforms. These platforms are not really all that interesting except as a barometer of the people in the party and what they seem to care about. The NDP is having their convention this weekend and I thought I would, just for giggles, read their policies and the proposed changes to those policies. Soooo, yeah this is what I do on Friday nights for fun, but I learned some things.

  • The NDP is really annoyed about tax havens. Probably because they do not understand how they actually work to the benefit Canada’s manufacturing exporters, but anyway, that is a discussion for another day…
  • The NDP is really annoyed about some railway to Churchill Manitoba that was privatized and apparently abandoned. So they want that fixed ASAP. Who knew?
  • They really do not like defined-contribution pension plans. But strangely enough they are also really upset about the Sears bankruptcy and its impact on Sears’ pensioners. If they had had a defined-contribution pensions, the Sears pensioners would still have their pensions… so that makes no sense.
  • The NDP really hates the new Canadian Infrastructure Bank, which is apparently the spawn of the devil for promoting public-private partnerships in infrastructure.
  • A lot of people in the NDP really seem to want to create Weimar Republic levels of inflation by having the Bank of Canada PRINT MONEY to pay for raised deficit spending rather that borrow the money in the market… Yeah, for real – no giggles! There are at least 3 different resolutions promoting this REALLY VERY BAD IDEA.
  • The NDP really hates rich people, stock options and capital gains.
  • They also do not like automation and Artificial Intelligence. They want it taxed, discouraged and monitored.

 

So generally speaking, a bunch of absolutely barmy left-wing nonsense. Overall the NDP’s current policies are a pile of relatively innocuous and benign left-wing nonsense, so none of this amounts to a big change. Also one has to acknowledge that these are just the resolutions to be debated, and so a lot of them will end up not passing as they are too radical. But the policy resolutions do give an indication of what the party diehards want to see. Please note the whole Leap Manifesto seems to be omnipresent but distinctly not on the agenda. The party voted to talk about it after the last election. Apparently that is an ongoing discussion.

 

But also strangely enough, they have some policies buried in the policy resolutions that are actually good ideas. There are only really three that are worth mentioning: a) Postal Banking; b) strengthening co-operatives; 3) cutting taxes on the poor.

 

The first one has long been a pet-rant of mine. In Japan where I lived, worked, taught and studied for over 10 years, the Yubinkyoku or “Post Office Bank”, is an important social institution offering basic banking services. No fancy stuff, just savings accounts, bank cards, bill paying, term deposits, cheap money transfers to other parts of the country and the like.

 

The Japan Postal Bank also supports and great deal of shopping-by-mail because you can pay for things at the post office and have them delivered cheaply and efficiently. It is therefore the foundation stone of many small rural Japanese communities and provides banking to the elderly and the poor for very reasonable fees. So yeah, I like the fact that the NDP has consistently proposed the creation of such a postal bank in Canada. It would be a good way to support rural and remote communities, particularly with regard to cutting the cost of getting basic foodstuffs and other goods to such communities. It would also make banking more accessible to low-income people and cut the heart out of the payday-lenders, cheque-cashing services and the rest of the “alternative finance” vultures. Overall, a good idea. It would be expensive as the Postal Bank would likely bleed money like a stuck pig, but overall still a good idea. I would rather indirectly subsidize the poor, the elderly, as well as rural and remote communities this way than any other.

 

The second good idea that the NDP has in its resolutions relates to co-operatives. They also like the sharing economy, but they also want higher taxes. You can’t tax sharing, so that makes no sense, but the pro-co-operative thing does. Co-operatives are just another form of doing business. More informal than corporations or partnerships or trusts, but if there are any barriers to co-operatives at the federal level I agree that they should be removed, and co-ops should be treated and taxed appropriately in a non-discriminatory manner. I agree with this because I believe that entrepreneurship should be encouraged regardless of its format, and that people should be making their decisions on how to solve problems based on what works for them, not what works for the government. If people want to work together to solve problems, the government should get out of their way. This is an oddly pro-market way of looking at it that would give most NDPers the willies… So I agree with the objectives of the policy, not just the reasons, which is just that the NDPers seem to really hate corporations and private business.

 

Lastly, although there is only one policy resolution on the issue, again it is a long-standing pet-rant of mine; the NDP has proposed ending income taxes on those living below the “low-income-cut-off” or LICO. LICO varies from city to city and over time as it real reflects not just relative but absolute poverty. Right now in most Canadian cities for a one-income family of 4 the LICO is about $40k. But in Canada we tax the life out of low income people! Do not get me started on the personal credit of only $10k federally plus a spousal amount of only $7k, or the fact that the working poor hit a high effective marginal tax rates in excess of 75% at relatively low levels of income because of the claw-backs of benefits once income starts to get even close to the LICO.

 

I agree with the NDP policy of reducing taxation on the poor, but again for opposing reasons. For me, much of the rhetoric on the left is about “Robin Hood” economics, or stealing from the rich to give to the poor. But virtually none of that thinking focuses on the fact that Robin Hood was a rational reaction to the Sheriff of Nott taxing the poor to death… so how about we stop with the Sheriff of Nott and then maybe we do not need the Robin Hood thing quite so much? How about trying that for a change? So the logical thing to do is to raise the personal credit to $16k nationally, and allow that entire amount to be transferred from a non-working spouse, and increase the “kiddy credit” amount to $6k per kid up to two kids. That would put the first tax dollar coming out at about $44k of income, which is above the LICO everywhere. Now that is a tax policy everyone can get behind. It would also be expensive, but it would provide a clear incentive for people to work, and it would not trap working people in poverty.

 

So mostly I think the NDP are dreamers, but there are some of their policies that are worth looking at.


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