Beware of NDP leadership hopefuls bearing policy gifts from Greece
By Gregory Thomas
In his campaign to become the next national leader of the NDP, candidate Brian Topp is proposing a radical program of huge tax hikes. To understand why a serious contender for the leadership of Canada's official opposition would put forward such a destructive program, it's important to consider his world view.
When the Greek debt crisis was unfolding this past summer, Mr. Topp was at the centre of it all, in Athens, admiring the leadership skills of former Greek Prime Minister George Papandreou.
To most of us the summer was frightening; watching Papandreou plunge the world economy into near-chaos – first agreeing to a bailout package from the European Union, then announcing a national referendum on the deal (without consulting the EU or his cabinet), triggering a global stock market sell-off and finally calling off the referendum vote and resigning under pressure. Investors took a 50 per cent loss on Greek bonds, pensioners saw across-the-board reductions in their retirement benefits, while Greek employers and workers prepared for a severe recession.
For Topp, then serving as national president of Canada's NDP, it was business as usual.
In Athens on Canada Day, for the worldwide convention of Socialist International, he wrote home to his blog , that Papandreou "is a quietly inspiring figure." Topp said the Greek leader "opened the meeting with a calm, thoughtful, and determined overview."
"Perhaps his most important words were his final ones," Topp wrote, as he thrilled to the uplifting rhetoric. "We will survive, and we will win."
Everybody knows the next chapter in the story: Papandreou and the NDP's Socialist International counterparts proceeded to default on Greece's debt.
This would all be pretty funny if Brian Topp were not the most likely successor to Jack Layton, poised to become the leader of Canada's official opposition.
In the current fiscal year, the government of Canada expects to collect record revenues. Even so, finance minister Jim Flaherty is forecasting a $35 billion deficit on account of spending that has soared 31 per cent since his government took office in 2006. And Flaherty is forecasting spending to increase a further 13 per cent over the next five years, before revenues overtake spending and we finally enjoy a balanced budget.
Like most of his colleagues in Socialist International, Brian Topp believes the solution to the worldwide debt crisis (a crisis caused by over-spending) is higher taxes.
In his policy paper released in late November, Brian Topp promises that, as Prime Minister, he will hike the top federal income tax rate from 29 per cent to 35 per cent, double the taxable capital gains rate from 50 to 100 per cent, tax stock options like employment income and boost the federal business tax rate from 15 per cent to 22.12 per cent.
He explains his $18 billion tax grab, saying our current tax rates are "benefits given to people who don't need them." Apparently in Mr. Topp's world, any money you earn is rightful property of the government and any amount they let you keep is a gift for which you should be grateful.
For now, the people Brian Topp claims to really want to squeeze – 173,570 people earning over $250,000 – (less than the population of Barrie, Ontario) already pay $29 billion dollars in federal income tax each year. Or put another way, they are the 0.7 per cent of all taxpayers who happen to provide 20 per cent of all federal income tax revenue. In comparison, 12 million Canadians (52 per cent of taxpayers) pay $6 billion in federal income taxes – only 4 per cent of the total.
Topp's solution is to target the people who already pay $29 billion each year in federal income tax and take another $3 billion from them.
And what would he do with that $3 billion tax grab? Topp says the money "would then be available for productive investment."
Many of us could probably be classed as sceptics on that point: if you needed to find a truly productive investment for that money, you might be tempted to leave it in the hands of the people who earned it, rather than turn it over to the president of the NDP, the former prime minister of Greece and all the big brains in Socialist International.
Gregory Thomas is the federal and Ontario director of the Canadian Taxpayers Federation.