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Tempus Fugit Memento Mori - Time Flies Remember Death
When Conservatives 'flip flop and fly' on election day they die!
by StFerdIII
Flip Flop and fly – oh girl I die! So goes the old song. Harper, Prime Minister of the Socialist Dominion of Canada, will be singing this after losing the next election. When ballot season gets hot and heavy, the enemies of Harper and the so-called ‘Conservative’ party of Canada, will coyly remind the electorate of the flip flop and fly policy changes by Harper and his trusted band of populists. In fact somewhere between 12-15 flip flops can now be counted and we are only in the first year of the Conservative reign in the socialist back-patting, mirror-looking nirvana of Canada. How many more flips will flop between now and the election?
Yes we all know that being in opposition entails being opposed to the government of the day. It demands statements in support of this or that idea that runs counter to the government’s position. Or so the experts tell us. In fact good opposition parties have a plan; a stratagem on attaining objectives; principles and policy statements that reflect their program. They might even [gasp!] agree with the government on sundry issues. Sadly most politicians, parties and opposition members reflect none of the above. The flip-flop then becomes the policy of choice – saying whatever they feel like in opposition tends to come back to haunt them once in power. A rudderless ship just drifts along.
Thus the oldie but goodie, ‘I was against this idea before I was for it’ becomes the daily diet of political gamesmanship and one that the public grows weary of pretty fast. Some flops and flips are acceptable but only on minor issues. If politicians – especially conservative ones who maintain that they are honest, well disposed towards business and the taxpayer and conscious of ‘duty’ – engage in exchanging flops for flips on the big issues they will soon find themselves out of office or marginalized in elections. Major issue flippers become very soon election night floppers.
In the age of google and youtube.com you have to be a ruthlessly arrogant populist to suppose that making and breaking promises is either not important, or politically reparable. Some broken promises can work out well – especially if they cause big business; big oil; ‘greedy capitalists’; or ‘the rich’; pain and ignominy. Nothing will help your poll numbers more than some good old fashioned anti-market, anti-investor class Marxist populism and associated empty-headed rhetoric.
Raising taxes; imposing ‘sur-charges’ on corporations; implementing more ‘fees’ and costs for big business are the policy choices of the lazy man in power. Such populist anti-capitalist bashing presents, at face value, few problems. Cover it all up with nice wording such as ‘paying their fair share’; ‘equitable taxation’; or ‘funding our values programs’; and your poll numbers should shoot up.
But here is the problem. If on election-day you are running and you have a C for Conservative or R for Republican beside your name than rest assured that union workers, most immigrants, all socialists and Marxist types are not going to vote for you anyways. You also run the suicidal risk of alienating those who disagree with crass populism, and your base support will hardly be impressed by your lack of market friendliness or commitment to freedom in the sense of limiting the leviathan state. It gets even worse if you broke previous promises to enact such mindless populist policy. If this occurs don’t be too surprised that the average voter and media outlet, along with your political base, begins to distrust your every move and either votes against you or stays home on voting day.
These are the issues facing Canada’s conservative version of US Democrat John Kerry. PM Stephen Harper was a welcome change in many respects from the corrupt governments of his predecessors. His pro-US disposition is sorely needed on all issues from the military to the economic. His government’s determination not to cave in to anti-American; eco-marxism; anti-militarism; or other phobias both mental and psychological that afflict the modern EU-styled welfare state is admirable. The fact that he has done very little to encourage an alternative anti-EU welfare state model is however rather obvious. Outside of the paltry increase in military spending [from C$12 billion to $15 billion per year], Harper has shown himself to be a remarkably adroit populist – moving from his pre-power days as a committed true conservative believer in smaller government; a robust and projectionable military; low taxes and less welfare into a populist intent on keeping power.
On some major issues Harper has flip flopped more than a harper seal on thinning ice. The key red flag of the flip flop ice dance has been his ‘conservative’ government’s support of the 2nd highest corporate taxation regime in the world. Canada is over-taxed, over-regulated and over-governed. The Federal government runs huge surpluses which is a form of over-taxation. A popular and economically important form of incorporation to avoid the 39% corporate income tax, called an ‘income trust’ was to be kept sacred by Harper. Income trusts pay their net profits as dividends to shareholders thus avoiding the high corporate tax which is in effect a double taxation of income. On page 32 of his party’s handbook just 10 months ago, Harper promised not to tax these trusts. This promise was reversed on Halloween and the ‘conservative’ government will tax income trusts the same way that other corporations are over-taxed. It is not a smart move.
Income trust corporate forms were vital for smaller capitalized firms to access capital at good rates, creating jobs, stimulating the economy and attracting domestic and foreign investors. The government’s problem was that these trusts disperse their profits to shareholders who then pay a dividend tax. For other forms of corporate organization the government taxes every dollar twice – net income is subject to an effective 39% tax rate – and dividends are taxed when they are distributed. This double taxation of income is very attractive to governments. So income trusts, which tax a dollar only once, had to go and this broken promise was sold by somehow linking the increased taxation to ‘the welfare of senior citizens’. The hypocrisy of this populist sloganeering is apparent when one considers that $20 Billion of investment value was erased thanks to the breaking of the ‘conservative party’s’ promise, much of that decline hitting invested seniors hard.
Now this same government is proposing taxing or shutting down all loopholes regarding overseas tax havens. The rationale is that too much corporate tax is ‘being avoided’. Much like the income trust issue, this misses the key driving force of allocating capital from a high taxed jurisdiction to a lower taxed one. The punishing high rates of effective corporate income tax in Canada which according to many reports from Canadian think-tank institutes to KPMG, is about 48-49% of net income, force firms to look for avenues to increase shareholder wealth. For politicians this obvious policy gift is too tempting to resist. Why reform the tax system when simply bashing ‘evil’ corporations and subjecting them to continued confiscatory levels of ruinous taxation will increase government revenues and political poll approval levels?
The Harper conservatives in opposition and most of their key members in times past were small-government, low-taxed conservatives. Now they are big government populists. Much like the Republican party in the US, the Harper populists will pay a price at the polls. The US Republicans were hammered on a range of issues – most of them stemming from the fact that they had long ago stopped acting like conservatives. When that happens, the base stays home, the independents go elsewhere and the media feasts on broken conservative promises. Expect the same in Canada to follow during the next election cycle.
