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The Progressive Economics Forum: Doubling Contributions To The Tax Free Savings Account: Even Nastier Than Income Splitting

The Harper government gives five reasons why Canadians ought to be happy with its proposal to double the maximum contribution to the Tax-Free Savings Account. Examine each of its points more closely, however, and it’s clear that the TFSA carries far higher risks than rewards — for individual Canadians as well as for the economy as a whole.

Let’s unpack the government’s arguments one by one:

1. The TFSA helps people save

The evidence certainly doesn’t support this statement. TFSAs first saw the light of day in January 2009 at a time when the savings rate had already been climbing (Read more…)

Accidental Deliberations: Monday Morning Links

Miscellaneous material to start your week.

- Janine Berg writes about the need for strong public policy to counter the trend of growing inequality. And Gillian White traces the ever-increasing divergence between worker productivity and wages in an interview with Jan Rivkin: White: Some say that the decrease of collective bargaining has played a role in creating the gap, how true do you think that is?

Rivkin: There are a number of causes, one is the underlying shift in technology and globalization. Another is systematic underinvestment in the commons, which is a set of shared resources that every business needs (Read more…)

Accidental Deliberations: Saturday Morning Links

Assorted content for your weekend reading.

- Bryce Covert weighs in on the IMF’s latest study showing a connection between stronger trade unions and greater income equality: While it can be hard to say for sure whether the decline in unionization is a direct cause of growing income inequality, they found that it is a “key contributor” to steep increases in income at the top, which holds true even after they controlled for other factors such as shifts in political power, labor market trends like the growing power of Wall Street and deindustrialization, and top marginal tax rates.

The authors (Read more…)

Accidental Deliberations: Thursday Morning Links

This and that for your Thursday reading.

- Jacob Hacker and Paul Pierson link inequality and climate change as massive problems which are generated by political choices (and thus amenable to correction through the political system): Rising inequality is no more natural than global warming. And just as with global warming, our biggest fear should be that it becomes increasingly self-reinforcing — not because of some “natural” economic process, but because economic power begets political power, which can be used to further increase economic advantage. Look around, and the evidence that this is a real threat abounds. To cite just (Read more…)

Political Eh-conomy: Stagnant wages for over 80% of Canadian workers

Are wages in Canada stagnant or growing? The short answer is another question: do you live in an oil boom province? There’s a fairly common meme that while Canada, like the US, saw wages stagnate, this is no longer true. Indeed, overall wage growth has picked up since the last crisis.

“Stagnant real wages” is yet another US talking point imported into Canada without checking the data pic.twitter.com/Z6fg2G4uMZ

— Stephen Gordon (@stephenfgordon) December 29, 2014

The baggage that comes with this meme is that we here in reasonable, responsible Canada shouldn’t care about all those things that the US and (Read more…)

Accidental Deliberations: Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Lee-Anne Goodman reports on studies from both the Parliamentary Budget Officer (PDF) and the Broadbent Institute (PDF) showing that enlarged tax-free savings accounts stand to blow a massive hole in the federal budget while exacerbating inequality. And PressProgress documents and refutes the pitiful response from the right.

- But then, I suppose we shouldn’t expect the Cons’ actions on TFSA to differ from their usual mismanagement. And Scott Clark and Peter DeVries write that the Cons’ tax baubles in general have accomplished nothing useful, while Ricarda Acuna notes that Alberta (as the exemplar (Read more…)

Accidental Deliberations: Tuesday Morning Links

This and that for your Tuesday reading.

- Nora Loreto rightly challenges the instinct to respond to tragedy with blame in the name of “responsibility”, rather than compassion in the interest of making matters better: Blame is the projection of grief, sadness or fear. It is the projection of our own inadequacies; of our own feelings of, “oh god, that could be my kid” wrapped up in “thank god I’m a better parent than that.” It pretends that all things are equal, that all family situations are equal and all children are essentially the same.

But it’s malicious. Blame, (Read more…)

Accidental Deliberations: Sunday Morning Links

Miscellaneous material for your Sunday reading.

- Al Engler argues that it’s long past time to start raising taxes on the wealthy to make sure that Canada can fund the level of social development we deserve.

- Kevin Drum writes that we shouldn’t be satisfied with a temporary dip in inequality caused by the 2008 recession when longer-term trends suggest matters will get worse. And Lynn Parramore interviews Lance Taylor about the demand-side implications of exacerbated inequality: LP: Thomas Piketty’s work on inequality has generated enormous interest.  How does your analysis of how the rich grow richer differ from (Read more…)

Accidental Deliberations: Saturday Morning Links

Assorted content for your weekend reading.

- Danyaal Raza highlights how Canadians can treat an election year as an opportunity to discuss the a focus on social health with candidates and peers alike: Health providers are increasingly recognizing that while a robust health care system is an important part of promoting Canadians’ health, so is the availability of affordable housing, decent work, and a tightly knit social safety net. Upstream-focused clinical interventions, like the income security program available where I practice, are increasingly meeting that need – but no such program works in a vacuum.…Thinking differently requires speaking differently. (Read more…)

Accidental Deliberations: Friday Morning Links

Assorted content to end your week.

- Nicholas Kristof discusses how U.S. workers have suffered as a result of declining union strength. And Barry Critchley writes that Canada’s average expected retirement age has crept over 65 – with that change coming out of necessity rather than worker choice.

- Alex Andreou rightly slams the concept of “defensive architecture” intended to eliminate the poor from sight rather than actually addressing poverty: “When you’re designed against, you know it,” says Ocean Howell, who teaches architectural history at the University of Oregon, speaking about anti-skateboarding designs. “Other people might not see it, (Read more…)

Accidental Deliberations: New column day

Here, on the Cons’ attempt to spin an election narrative out of a fictional bogeyman rather than protecting or helping Canadians.

For further reading…- The National Academy of Sciences offers a comparison of death rates from multiple causes in Canada and elsewhere, while Statistics Canada has more detailed data. And it’s also worth a reminder as to the large number of deaths caused by inequality.- In contrast to the real risks we face and accept every day, even the Cons’ attempt to fabricate a paper trail around terrorism resorts to labeling arrests as failures or dangers (rather (Read more…)

Accidental Deliberations: Thursday Morning Links

This and that for your Thursday reading.

- Jeffrey Sparshott discusses new research into how automation stands to displace workers and exacerbate inequality, while a House of Lords committee finds that 35% of the current jobs in the UK could fall prey to exactly that process. And Szu Ping Chan reports on Andy Haldane’s warning that a vicious cycle could prove disastrous for everybody: Mr Haldane warned that robots could soon replace workers en-masse.

“Intelligent robots could substitute for lower-skilled tasks. If the capacity of the machine brain approached, or surpassed, the human brain, higher-skilled jobs could also be at (Read more…)

Accidental Deliberations: Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Garfield Mahood and Brian Iler discuss the challenge facing charities as compared to the special treatment of businesses in trying to advocate as to public policy: (T)he solutions to many of society’s problems do not need more research and the criticism-free public education that the CRA permits. They cry out for advocacy and changed law. Unfortunately, the CRA only allows NGOs to spend 10 per cent of their income on policy advocacy and law reform. Thus a charity has to be substantial in order to be large enough to fund meaningful advocacy.

In (Read more…)

Accidental Deliberations: Tuesday Morning Links

This and that for your Tuesday reading.

- Tessa Jowell writes that we need to treat inequality as a disease which can be cured through effective public policy, but the Star points out that the Cons have instead gone out of their way to make it worse. Fair Vote Canada interviews J. Peter Venton about the toxic effect of inequality on our political system. And Sean McElwee notes that in the U.S. at least, the right has managed to turn the middle and working classes against exactly the type of redistribution which best serves their interests.

- Yanis Varoufakis (Read more…)

Accidental Deliberations: Saturday Morning Links

Assorted content for your weekend reading.

- Cameron Dearlove laments the fact that Canada is failing to recognize and replicate other countries’ successes in using the social determinants of health to shape public policy: Today we know that social and financial inequities — particularly the experience of poverty — has a greater impact on our health than our healthcare system, genetics, even lifestyle choices. For a society facing spiking healthcare costs, the social determinants of health (things like housing, food security, social inclusion, early childhood development, employment, and working conditions) arguably present the greatest public policy opportunity since the creation (Read more…)

Accidental Deliberations: Friday Morning Links

Miscellaneous material to end your week.

- Simon Wren-Lewis nicely describes the austerity con (coming soon in extreme form to an Alberta near you): ‘Mediamacro’ is the term I use to describe macroeconomics as it is portrayed in the majority of the media. Mediamacro has a number of general features. It puts much more emphasis than conventional macroeconomics does on the financial markets, and on the views of participants in those markets. It prefers simple stories to more complex analysis. As part of this, it is fond of analogies between governments and individuals, even when those analogies are generally seen (Read more…)

Accidental Deliberations: Wednesday Afternoon Links

Miscellaneous material for your mid-week reading.

- Jacques Peretti discusses how corporate elites rewrote our social contract in a concerted effort to the inequality we’re fighting today – and suggests it’s well past time to push back in the name of moral economics: Politicians have now, as then, conspired in their own diminishment — outsourcing foreign policy to Washington, saying there’s nothing we can do about global capitalism.

But it’s not up to them, it’s up to us to be uncompromisingly moral at a moment when the criminal immorality of 30 years of misguided economic policy has been revealed.

The (Read more…)

Accidental Deliberations: Tuesday Morning Links

This and that for your Tuesday reading.

- Both Richard Bilton and Matthew Yglesias discuss Le Monde’s reporting on HSBC’s active participation in widespread tax evasion. And James Bloodworth rightly argues that we should see tax avoidance as socially unacceptable even if governments fail to do their job in ensuring that everybody pays their fair share: Indeed, who wouldn’t want to be tax efficient?

The answer very much depends on what sort of society you want to live in. Were the question phrased more honestly – i.e. bearing some relation to what the consequences of being ‘tax efficient’ are (Read more…)

Accidental Deliberations: Sunday Morning Links

This and that for your Sunday reading.

- Scott Santens links the themes of health and equality by suggesting that we treat a basic income as a needed vaccine against poverty and all its ill effects.

- Erika Eichelberger and Dave Gilson highlight how U.S. corporations are siphoning money offshore to avoid paying their fair share of taxes. And Kate Aronoff warns us that the mindless extraction of profits is producing environmental and financial crises alike: Between debt and our slowly roasting planet, we’ll be lucky to walk away from the next 25 years with just one crisis. There (Read more…)

Accidental Deliberations: Saturday Morning Links

Assorted content for your weekend reading.

- John Hood discusses how the privilege of the political class makes it difficult for elected representatives to understand, let alone address, the problems of the precariat. And Lawrence Mishel and Will Kimball document the continued connection between the erosion of unions and income inequality.

- Lizzie Dearden reports on one proposal to rein in corporate abuses, as Ed Miliband intends to crack down on tax cheats and the jurisdictions which harbor them. And Carol Linnitt suggests that Canada’s public corporations should be required to disclose their political expenditures.

- But unfortunately, the Harper (Read more…)

The Disaffected Lib: What Neoliberalism Has in Store For You

click to enlarge

From Le Monde, a timely explanation of how disastrous neoliberalism continues to thrive despite an endless string of economic disasters and what it holds in store for you even as you continue to vote for those who practice it.  Hint. Neoliberalism is class warfare and it’s being waged in our own Parliament against us.

Even neoliberal proponents recognize that it is a crisis-ridden system. In his popular book Why Globalisation Works, Financial Times columnist Martin Wolf writes: “Between 1945 and 1971, in what might be called the “age of financial repression”, there had been only thirty-eight (Read more…)

. . . → Read More: The Disaffected Lib: What Neoliberalism Has in Store For You

Accidental Deliberations: Monday Morning Links

Miscellaneous material to start your week.

- Paul Mason discusses the effect a guaranteed annual income could have on individuals’ choices about labour and employment: A true, subsistence level basic income would close to double [existing social spending in the UK]. But it is imaginable, in the short to medium term, if you factor in the benefits.

The first would be to eradicate low-paid menial work. Why slave 10 hours a day with mop and bucket for £12k when you get £6k for free? Corporations would rebalance their business models towards a high pay, stable consumption, low-ish profit world, and (Read more…)

Accidental Deliberations: Sunday Morning Links

This and that for your Sunday reading.

- Doug Saunders observes that Syriza’s strong election victory may signal a sea change as to whether austerity is inevitable, while Adnan Al-Daini notes that the financial sector can no longer take for granted that its profits will be placed above the interests of actual people. Which means that Joe Oliver may get even more lonely lecturing Canada’s provinces that the economic beatings will continue until morale improves.

- Speaking of whom, Canadians for Tax Fairness highlights how Oliver has long known that the Cons’ income splitting plans represent nothing more than a (Read more…)

Accidental Deliberations: Thursday Morning Links

This and that for your Thursday reading.

- Jim Stanford reminds us that any drama as to whether Canada’s budget will be balanced this year is entirely of the Cons’ own making through pointless tax slashing: Running spending cuts since 2011 now total more than $14-billion a year. Canadians experience real consequences from those cuts every day: shuttered veterans’ offices, deteriorating statistical data, questionable railway and food safety, ridiculous waits for statutory benefits and more. Federal government employment has plunged by 47,000 jobs since 2011 – explaining much of Canada’s lousy job-market performance. These sacrifices were not necessary. Worse yet, (Read more…)

Accidental Deliberations: Tuesday Morning Links

This and that for your Tuesday reading.

- Will Hutton writes about the connection between inequality and the loss of any moral or social purpose in public life: Britain is beset by a crisis of purpose. We don’t know who we are any longer, where we are going or even if there is a “we”. The country is so passionately attached to past glories because there are so few to celebrate in the present. The crisis is compounded since we have been told for 30 years that the route to universal wellbeing is to abandon the expense of justice (Read more…)