Wheat from the Chaff Blog

Here’s a story that I have yet to find in the Vancouver Sun or the G and M. [Update: I did find this story in the National Post, but it was half the length of the Toronto Star article.] This is not the sort of thing that low-tax corporate media outlets want you to know; the gist of the story is that federal and provincial business taxes are actually quite low, even in comparison to the United States. Of course, racing to the bottom with Mexico may not be the greatest idea, either.

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Canada scores well in tax report: Canada ranks behind Mexico, and far ahead of the U.S. in KPMG report

thestar.com (Toronto Star Online, May 13, 2010)

Canada ranks second to Mexico and far ahead of the U.S. on a list of tax-friendly countries for business, according to a new report.

In general, businesses in Mexico pay 40.1 per cent less tax than those in the U.S. Taxes in Canada are just over one-third, or 36.1 per cent, lower.

At the other end of the spectrum, corporate taxes are 81.4 per cent higher in France than the U.S., according to the report released Wednesday by accounting firm KPMG.

Lower corporate tax rates can be a huge competitive advantage when companies decide where to set up shop, said Greg Wiebe, managing partner in KPMG tax practice in Toronto.

“Business has the ability to set up manufacturing, distribution plants, and offices anywhere in the world depending on where it makes sense. Having a competitive corporate tax rate hopefully allows you to attract more business and investment into the country which creates jobs,” Wiebe said.

“We’re a small country and have a relatively small economy. We need to take advantage of anything we can to attract business into this country.”

While Mexico remains in the number one spot with the lowest total taxes, changes to the tax systems in Australia, Canada, and the Netherlands moved them higher in the ranking, conducted every two years.

The report tallies up the cost of income tax, capital, sales, and property taxes, as well as miscellaneous local taxes and statutory labour costs, in 95 cities across 10 countries. The U.S., the largest economy in the world, is used as a baseline.

While personal income taxes and sales taxes are still higher in Canada, payroll taxes have been reduced, capital taxes have been phased out, and corporate tax rates have been falling in recent years. Canada’s federal and provincial corporate tax rates are approaching 25 per cent. The U.S. federal tax rate for business starts at 35 per cent, and state tax rates vary.

Canada ranked third in the 2008 survey.

The introduction of the HST in Ontario and British Columbia is likely to enhance Canada’s standing in the coming years, Wiebe said. “The HST is quite a business friendly way of applying a sales tax.”

Among the ranking of cities, Vancouver comes out on top, and ahead of Monterrey and Mexico City. Seattle, its natural U.S. counterpart, ranked at 18.

Montreal and Toronto rounded out the top five, again showing a big tax advantage over U.S. cities in the eastern corridor, such as New York City, which came in at 27, Philadelphia at 14, and Boston, which captured the 13th spot.

Lower health care costs and provincial taxes in British Columbia helped boost Vancouver to the top of the list, Wiebe said.

Vancouver was also deemed the most attractive city, tax-wise, for manufacturing and corporate and information technology companies.

For research and development, Montreal ranked as the top Canadian city, taking the No. 2 spot behind Melbourne, Australia. Sydney, Australia; Vancouver; and Manchester, U.K. filled out the top five.

Australia moved up to the top spot from fifth place in the 2008 survey, as a result of a new refundable tax credit for research and development.

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Almost as fascinating as the article were some of the letters posted by the Toronto Star readers. Here’s one:

Strange Report
I was always under the impression that taxes are lower for businesses in the US than in Canada. I would be interested in knowing exactly how these findings were put together as it is probably laden with bias.

In other words, all the reader has ever heard from the media is that businesses are over-taxed. So, any contrary point of view, even from a respected international accounting firm like KPMG, must be immediately suspicious. I suspect such skepticism would rarely follow a more traditional “taxes are too high” story, no matter how self-serving it might be.

What is “politics”? According to Chp. 2 of Sheldon Wolin’s Politics and Vision*, it’s certainly not an intellectual conception he shares with Plato.

Plato’s vision of politics is of the Good: the right and just principles that are common to all rational beings, and that ought to govern their political community. It is a philosophical conception, in the sense that his vision is derived from reason, yet practical because it reflects a serious attempt to imagine a real and tangible Good Society. But Plato’s quest for a tabula rasa, on which society is to be reconstructed with the help of a philosopher king (as in The Republic) or a philosopher-legislator (as in The Laws), always points to the same conclusion: “absolute power yoked to absolute knowledge” (p. 45). To be sure, Plato does not aim for a totalitarian solution. Far from it. Plato is repeatedly concerned with the excesses of power. His solution is a search for the Forms, eternal verities which transcend time, place and historical convention. With knowledge of the Forms, and the leadership of Rational people suffused with a “deep longing of the purified soul” (p. 52), Plato argues that the corruption of power will be overcome. In Wolin’s words, it is the assuring logic of all Rationalists: “when political power is joined to knowledge it loses its compulsive element” (ibid).

Wolin disputes this vision of politics. According to Wolin, politics is defined as the activity of citizens within a given geographical area who work (or struggle) to resolve common problems under the condition of scarcity (of resources, status and authority). It is fundamentally a vision of conflict (p. 11). From this perspective, there is no real sense of politics in Plato’s writings, precisely because Wolin’s politics is a communal activity that does not aim at Truth. Plato contributes little to issues like political participation, because such concerns imply a need for consent and conventionality that have little time for the Universal Good. Against Plato, Wolin argues that any political “agreement that issues from participation is not intended as a symbol of truth but as a tangible expression of that sense of belonging which forms a vital dike against the forces of anomie” (p. 58). And beyond legitimization, politics “involves a judgment concerning claims, all of which possess a certain validity” (ibid). In other words, it is a balance of competing “opinions” that leads to “tentative stabilities within a situation of conflict” (p. 60).

Wolin rebukes others, like Leo Strauss, who laments that “agreement may produce peace but it cannot produce truth” (quoted in Wolin, p. 57). Plato, Strauss and others have refused to see politics for what it is: an activity that is necessary in and of itself, and which can’t be transcended. Arguing otherwise, says Wolin, is simply “fatuous” (ibid). As such, political philosophy cannot ignore judgments of conciliation and compromise. It must be about conciliation and compromise, and the communal nature that frames these “tentative stabilities”. A “political judgment, in other words, is ‘true’ when it is public, not public when it accords to some standard external to politics” (p. 58). Moreover, any idea of transcendence leads to a “hollowing out of political content”, and makes the issues of political obligation, political community and the existence of competing interests “dangerously irrelevant” (p. 48). Dissent and contrary political views, from Plato’s logic, can only be seen as untruth, and untruth is mere steps away from a totalitarian solution.

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I find myself very sympathetic to Wolin’s critique of Plato. It certainly mirrors my own reading of Plato (particularly The Republic), and reflects the shock I had when I first read Plato’s prescriptions for a new and better world. Two concerns do surface, however. First, Wolin never satisfactorily explains the irreducibly pluralistic nature of politics. It’s posited with a few examples, but there is no systematic discussion to buttress his point of view. Perhaps we shall see more about this later. Similarly, I am somewhat disenchanted with Wolin’s conception of power. So far, it seems very simple and clear-cut; power is explicit decision making on behalf of particular interests over others. It seems much like the first level in Steven Lukes’ three levels of power. Maybe later we will see a greater concern with non-decision making and the covert shaping of desire… and discourses of truth.

I have a rather ambiguous opinion of Cormac McCarthy’s The Road. On one hand, it’s a beautifully phrased novel, full of powerful images and rich language. On the other hand, the plot is rather pedestrian, and the author’s defiance of writing conventions is tiresome.

There’s no doubt that McCarthy is a gifted writer. Many passages are profoundly beautiful and show McCarthy’s daunting command of language. He is a fabulous painter of words, utilizing an often inventive terminology. For example, the boy is described in an impressively figurative manner: “Knobby spine-bones. The razarous shoulder blades sawing under the pale skin” (p. 218). Quite often, individual words surprise and enrich: “rasping”, “viscera”, “dentil”, “macadam”, and so on. In an age of anti-intellectualism, where so-called “big words” expose a person to abuse like glasses do in a Khmer Rouge nightmare, McCarthy’s breadth of vocabulary is impressive, perhaps even inspiring. Finally, the relationship between man and boy seems genuine and real, and moves beyond the easy nihilism for which McCarthy is often accused.

Nevertheless, there many disappointing parts to the novel. The plot is predictable and surprisingly linear: look down at a town or house; search town or house for food; discover amazingly well-preserved food stores just in time to avoid starvation; avoid grisly cannibals when necessary; climb to the top of the next hill and consider the depravity of man (or at least flat caricatures of depraved beasts); repeat sequence at least four times. The plot seems awfully amenable to a screen play, almost as if The Road was written as a novelization of a movie. McCarthy’s well-known aversion to grammar rules also grates, and I personally think it overwhelms the linguistic and emotional side of the book. I don’t really care about the lack of apostrophes or quotation marks; I get the rather bludgeoned symbolism about the artificiality and fragility of society. But the apparently random use of sentence fragments becomes incredibly annoying. I spent much of my time filling in the subject or the predicate, or both. Such undue effort led me to skip-read much of the novel, only occasionally slowing down to savour an occasional passage. Are such rules of writing really so imposing? McCarthy seems to be saying yes, but it’s a bit like arguing the colour scheme of traffic lights is fascist, when such conventionality is really about moving on to more important things. In the end, the fragments and other broken rules seem like gimmicks, and convince me that McCarthy should have spent more time on plot development rather than the arbitrary rules of grammar.

So The Road leaves me perplexed; maybe it’s his Pulitzer Prize for the novel, and maybe it’s because other people lavish such praise on his book. If Oprah loves the novel, it must be good, no? Yet for me, it has the whiff of pretentiousness. McCarthy is a great writer, no doubt, but beating up sentences and punctuation does not replace good old fashioned story telling.

I pulled myself into a discussion of multiculturalism and had a surprisingly civil discussion with another respondent. I say “surprising” because it was in the online discussion forum for Maclean’s magazine, a place I normally avoid. [The extremism of the current editorial board has really taken its toll on a once venerable institution.] I suppose I was fascinated with this person’s belief that multiculturalism (and especially his rather relativistic notion of it) is the dominant political value in Canadian politics, an increasingly common belief that nevertheless goes against any serious reading of Canadian politics and history.

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[The other person] … Canada is more influenced by America than any non-Christian groups. Shall we start expelling them?

And just look at what the Internet has done to free expression and the invasion of foreign ideas. I don’t think people realize that Muslim’s use the Internet. Is it time to start filtering foreign websites?

Are Francophones to be skimmed off? Atheists and agnostics too? Increasing godless Ontario?

As Canadians we can only define our culture by what it is not. We are a country of immigrants that has changed significantly decade-over-decade, generation-over-generation and if you think asking immigrants to accept our culture will stem the tides of change, you are being very naive.

[My first response] I couldn’t disagree more. Canada is a liberal democracy, and that entails many substantive traditions and obligations. There are many things that we ARE. The Charter is a good place to start, though by no means the only point of reference. At Canada’s core is a moral and legal injunction to respect individual freedom and autonomy. We are also a society that is said to respect the rule of law and equality before the law. Thus, multiculturalism is not the core of Canadianism; indeed, it was an afterthought in the Charter process, and its position in Sec. 27 has a lexical ranking clearly below the individual freedoms and legal entitlements that come in the sections before it.

If newcomers, like both of my parents, can live within these obligations, then there is no problem. If they can’t, then Canada is not a place for them. And if we can’t ask for newcomers to respect these boundaries, then we are a society for which there is little to defend. And to think this is acceptable is what I think is naive.

[The other person] Fair enough. We can apply some cultural definition through our adaptations of British (and French) basis of law and sense of social contract, but socially speaking we are a society constantly in flux, which is why we went from excommunicating homosexuals from many aspects of society 50 years ago to allowing them to marry today, for example.

You say multiculturalism isn’t a core of Canadianism, ranking below individual freedoms and legal entitlements, but I would say that such freedoms and entitlements inevitably lead to multiculturalism by their very nature because it provides in law protection to minority groups from the rule of the majority (J.S. Mill would like it I am sure), resting heavily on the most important word in the Charter; ‘reasonable.’

The point I was making was against the rather disgusting bigotry directed towards a group of people who for the overwhelming part meet our societal obligations the best they can, with each generation meeting them better than the one before.

[My second response] I’d argue that Canadian multiculturalism is a fairly recent phenomenon that has its roots in the rise of “identity politics”, changing post-war immigration patterns and the struggle by many non-Brits and Francophones (including Ukranian and German Canadians) to battle the arrogance of “biculturalism”.

On the other hand, the liberal democratic principles I mentioned earlier have been around much longer, and many scholars argue that the Charter is just an extension and codification of long-held principles and beliefs (much of them inherent in British common law). As such, the changes in recognition that you rightly point out do not represent a fundamental change in our society, but a long overdue and logical extension of the universal promise inherent in liberal democratic societies and constitutions.

I do agree that bigots are never far from view, and often target those who have met or surpassed the “bar”. However, bigotry can work both ways. When I see certain Muslim families arrive on an annual basis to register their kids in our public distance ed. school, I am overwhelmed. The mothers (I think) arrive in a full burqa, they walk in the back, and they are mute [and thus moot]. The fathers control the registration. And I almost never see daughters.

It is obscene. It is the worst form of bigotry I can imagine. Unlike head coverings and religious symbols, which do not block interaction, the burqa is a portable wall of separation.

What is worse is that nobody says a word (out loud). I would lose my job if I objected.

And while I’m sure some would argue this is a “choice”, I recall those lines from Martin Luther King’s “Letter from a Birmingham Jail” – perhaps the best promulgation of Western values in the last 50 years:

… Any law that uplifts human personality is just. Any law that degrades human personality is unjust. All segregation statutes are unjust because segregation distorts the soul and damages the personality. It gives the segregator a false sense of superiority and the segregated a false sense of inferiority. Segregation, to use the terminology of the Jewish philosopher Martin Buber, substitutes an “I it” relationship for an “I thou” relationship and ends up relegating persons to the status of things. Hence segregation is not only politically, economically and sociologically unsound, it is morally wrong and sinful. Paul Tillich has said that sin is separation. Is not segregation an existential expression of man’s tragic separation, his awful estrangement, his terrible sinfulness?…