October 17, 2013
Bullish on the real news in the Monashee
My Valley Sun
From the edge of the pond join the discussion

Online Community News for Lumby, Cherryville, Rural Coldstream and Highway 6
We update this website on a regular basis. We are eager to receive your news, events, advertising and letters by email at:
Copyright 2011 My Valley Sun   Disclaimer
A conflict
of interest
taxes and the economy...
March 22, 2012
MVS took the prepared summary from a presentation by Dr. Ross Hickey a UBCO economics professor and handed it off to well known economist Dennis Milligan for a comment. Milligan is a longtime expert in alternative economics and particularly how money is created, while Dr. Hickey was sponsored by the Okanagan Shuswap Greens. Both men present insights as to what’s not working in our economy as well as offering up a few solutions, But there are differences - we call this contribution of ideas and critique - a conflict of interest.
A thoughtful contribution of ideas about the economy
What's Good about Taxes?
A prepared statement about a
presentation by Dr. Ross Hickey

This past month, 150 people occupied the Schubert Centre in Vernon to hear UBCO economics professor, Dr. Ross Hickey, present strategies for fair taxation.  "The very rich have been getting very richer over the past 30 years", he said. "At the same time, their tax rates have dropped from 43% in 1981 to just 29% today."

Their share of income is at pre-depression levels of the 1930s. Incomes of the top 100 CEOs in Canada increased 27% in one year from 2009 to 2010. Incomes of the average Canadian worker rose a mere 1.1% in the same period.

"That's bad for equity and bad for growth" Dr. Hickey stated. "Failure to reverse this trend will lead to greater crime, social unrest,and public insecurity. Furthermore, there is no relation between our economic productivity and low tax rates", he said.

"An unfair tax system is unproductive."  But it's not enough to target a few high priced CEOs, Dr. Hickey maintains. To spread the tax burden fairly, Dr. Hickey recommends broadening the tax base on consumer items.

"This may seem unpopular but it will capture more revenue from big spenders. However, it will only work if the increased burden on the poor is offset by substantial increase in transfers to low income earners. At the present time, government transfers and tax credits for things like home purchase and renovations largely benefit high earners. The poor can't buy into those".

"The average total rate of all federal, provincial and municipal taxes combined is 40% for those earning above $30,000. For those earning below $30,000, it's 80%. We know that income is related to success in education, which is related to employment. Over taxing the poor disables them from getting a good education; it leads to poor health, poor social outcomes, and poor labour skills that cost society more in the long run", he said.

"Canada's measure of inequality after paying taxes is much worse than the UK and Sweden".

Dr. Hickey noted, "Even though it's quite similar before taxes. Their tax system encourages equity. Coincidentally, their productivity is higher and their measures of social wellbeing are higher."

Dr. Hickey also recommends returning to a more progressive tax system.

"We must create more tax brackets with higher tax rates for higher incomes. We don't want to discourage people from working but we do want to have a system that is fair and provides sufficient revenue for education, health care, housing, daycare and other social programs."

Critics argue that higher taxes will encourage the rich to move away. While that may happen in a few cases, Dr. Hickey states that the rich are not as mobile as critics suggest. "Besides, they also appreciate the good things that good taxes provide".

"Taxpayers must tell politicians they want a fair tax system", he said. "They must stop saying taxes are bad. Taxes are the price of a productive, civil society. Taxpayers must insist on a fair price.

Putting People into the

Dennis Milligan comments on Dr. Ross Hickey’s
presentation called "What's Good about Taxes?"

Dr. Hickey is living proof that the solutions we so desperately need to our economic problems are most unlikely to emerge from within conventional economics. Most of his suggested strategies simply echo the Davos dervishes as they spin in their billion-dollar colloquia; first raise taxes, then cut programs and finally, sell all our hard-earned public assets to private corporations. They miss the point that our unbearably high rate of taxation is necessary because of impossible debt loads and the debilitating cost of servicing that debt. Simply put; if there was no debt owing to private banks, taxes could be reduced by as much as two-thirds.

A fast growing number of the 99% are suggesting unique solutions from outside the box, using something seldom encountered within the rarified atmosphere of academia. It’s called ‘common sense’. It’s an old concept but it can work miracles. Let’s put it to work in the context of money and debt. Here’s how it would look:

All law in Canada is built upon the solid foundation of our Constitution. According to Canada’s Supreme Court, the Constitution belongs not to any government, but to the people. It can only be amended by public referendum and is ‘ultra vires’ – illegal – unless so approved.

Section 91 – ‘Powers of Parliament’ – charges our elected parliament with the exclusive right to create the money of the nation, so that constitutionally, banks should be borrowing from our government and not the other way round.

When this constitutional duty of Parliament passed into the hands of private bankers, our government subjected to borrow capital to run the country from the private banks at high and erroneous compound interest rates. This process unfolded through the creation of the Bank of Canada Act, which created a publicly owned bank but controlled by the private sector.

Our Bank of Canada needs to become a direct responsibility of our elected Finance Minister and run as a department of the treasury and not controlled by a private board of directors.

In one move we would could correct things and begin borrowing from ourselves and any interest charged would return to Canadians as the legal shareholders. No debt – no taxes.

In short; our nation does not have to be in debt, at all; yet the present fraudulent debt-money system consumes two thirds of our creative energy and industry, requires us to buy three homes in order to live in one and work three times harder than would otherwise be necessary.

According to StatsCan’s latest figures, the interest we pay on the debt that this fatally flawed system has created, now amounts to $160 million a day. It’s a debt that cannot and will not ever be repaid in full, yet we accept austerity programs for an entire nation, while allowing a few investment bankers to walk away with billions in bonuses.

Monetary reform is therefore the first move we should be planning - and is a good place to begin removing the burden of constantly growing debt from our own shoulders, as well as of those generations who follow us.

But – some will say – we still need to levy some form of taxation to fund new public assets and services. That may well be, but we should be taxing where the big money is, not pursuing an impoverished public. We should begin by looking at a No-exclusion Financial Transaction Tax (NFTT); one-tenth of one percent (0.1%) on every transaction handled by any kind of financial institution. It follows that the most taxes would be borne by those with the most money in circulation. No one would need to calculate how much, or from whom.

Such deductions would be automatic, and would be tallied and remitted to the federal treasury daily. The cost of adjusting computer programs would be negligible and more than offset by the gradual removal of all corporate and personal taxes; a ‘perk’ the bankers themselves would share The Canada Revenue Agency would focus their future efforts on checking and auditing financial institutions.

Directors or senior partners of firms found guilty of malfeasance or fraud would face harsh penalties and serious prison time. Funds would be divided between government treasuries with Ottawa retaining 50%, provincial governments sharing 40% and municipalities sharing 10%; the latter two governments’ shares based on the latest census population figures. Funds to provinces – and via them to municipalities – would be remitted on a monthly basis and given total public transparency via official Treasury websites.

The Depository Trust and Clearing Corp. (DTCC) and their newly acquired EU counterpart EuroClear are responsible for clearing and processing every kind of investment instrument from around the world. More than 95% of their market is estimated to be made up of speculative trading rather than genuine investment activity. It’s one huge gambling casino - but every one of those transactions passes through the hands of a national bank at some point and it is there at the domestic level they should be taxed.

DTCC and EuroClear annual reports, together with the statistics of the Canadian Payments Association covering our domestic transactions, indicate that the potential Canadian value of this suggested tax source would be roughly 5% of an astronomical $3 quadrillion. With a minimum of two transfers for every transaction – one deposit and one withdrawal – an NFTT of 0.1% would yield, with the addition of our internal domestic transactions, approximately $300 to $350 billion a year; enough to allow for the incremental reduction and eventual removal of all other taxes at every level of government.

Agencies such as the UN and WTO would plug potential Forex or investment loopholes by enforcing international cooperation. The cost of non-participation or attempted circumvention by a rogue nation would be the loss of currency convertibility in the global market. That has always proven to be a powerful weapon of persuasion. 

Thus on one point alone do I agree with Dr.Hickey; we must stop saying that taxes are bad.


Economic Equation is community-based media and we help to improve the quality of life in the communities we serve by providing meaningful online news programming that informs, involves and inspires.

Support Local News
Subscribe - Advertise
Contribute - Purchase
Help us make more stories like this happen...
A store that supports
community-based media
Visit the BullMarket and
BullMarket - Support MVS