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King Canute No Match For Rising Tide of Taxes

Author: Victor Vrsnik 1999/04/05
Even a king's ransom isn't enough to silence all members of the corporate sector from railing against high taxes.

Captains of industry John Roth from Nortel, and David O'Brien from Canadian Pacific, recently spoke out against Canada's excessive tax burden. Both lamented Canada's inability to stay tax competitive with the U.S. , where both firms are losing talented Canadian professionals.

Influential leaders of industry may sympathize with the 'over-tax' sentiment, but few are stepping up to the plate to speak against it. More likely they are queuing up for the spoils of high taxes: corporate welfare.

Ottawa's appalling record of picking the winners from the losers through business subsidies does not entirely inspire confidence. As of last year, only 15 percent of repayable government loans totaling in excess of $3.2 billion have been repaid.

The government lavishes business with subsidies and tax breaks to remind the corporate sector of their station, expecting them not to upset the apple cart.

Not unlike many other Manitoba companies, pollsters Western Opinion Research and Angus Reid made-off with a fortune in taxpayer dollars. The media reported that Western Opinion - the Tory's polling firm - walked away with a $100,000 forgivable loan last year. Angus Reid did a little better with a $450,000 forgivable loan. The loan is forgivable providing the company meets certain growth conditions such as targeted employment figures.

Taxpayers are the first casualty of business subsidies and the tax cut movement is second. Government expects taxpayers to suck it up and sacrifice their labour to another company's benefit in the noble pursuit of nurturing business development.

Firms that benefit from business subsidies or special tax breaks are unlikely to stand before the rising tide of taxes. Alone, the appeals of Messrs. O'Brien and Roth will be no more successful than that of King Canute, the eleventh century Viking ruler, who sat on the shore commanding the tide to come no further.

The tax cut movement suffers a blow whenever a business is bought-off by government. The National Post editorial board amplified the point saying that, "the tax cut movement needs vocal advocates from the corporate sector, not weak-willed shills."

To be successful, the tax cut movement depends on the vertical integration of individuals, groups, and businesses to coalesce around the single most important source of plunging incomes and productivity - high taxes.

The movement must raise an army of tax-fatigued individuals from all quarters prepared to fight for fair and equitable taxes. Barring that, the all-powerful government will pick-off and divide representative groups one-by-one with special status, subsidies and tax breaks.

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Franco Terrazzano
Federal Director at
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Federation

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