Sunday, January 17, 2010

Kelly McParland: Barak Obama's 'Don't mess with the President' fee

Have you seen this picture of the wacko sculpture in Vancouver, the giant head of Lenin with a teenie-weenie naked Mao on its hairless dome, teetering along like a tightrope-walker? For some reason it made me think of Jim Flaherty.

I know, that's weird, but what can you do? The reason they call it the subconscious is because it's beavering away down there where you can't see it, and then things like this pop up.

Maybe it's because, like the teenie-weenie Mao figure, the Finance Minister doesn't seem to be completely in control of things at the moment, especially when it comes to bank taxes and the aftermath of the recession (assuming this is indeed the aftermath, and no just some cunning cul-de-sac along the way.)

I was thinking about bank taxes because introducing them is what President Obama has been up to. He doesn't call them taxes, mind, but a "financial crisis responsibility fee." I love that term. Financial Crisis Responsibility Fee. It's like, whenever they brought a U.S. body home from Iraq, they could have called it a "Wrong Call on the War Oopsie". Just to take the edge off.

The FCRF is President Obama showing New York's banking barons he can play silly games just as well as they can. Those smart-asses on Wall Street want to take his trillions, shore up their bottom line, then turn around and award themselves mega-bonuses in reward for their financial genius, making Obama look stupid in the process? They want to skip out when he invites them to a meeting in Washington, claiming there's a bit of the fog at the airport? Fine -- if he can't tax away their bonuses, he'll tax the whole damn bank. And then he'll call it the Financial Crisis Responsibility Fee, just to make the point -- even if not entirely accurate -- that the fat cats with the bonuses are the ones who caused it all. Let's see them explain that to their boards: "But guys, I needed the money -- my crystal office toilet has a flaw in it."

Obama was just following up on a precedent set by the British government, which concluded that the way to haul its own economy out of the dumpster was to return to the taxation protocols on the 1960s, when the governbment took 95% or so from anyone stupid enough to actually go to work and generate some income. Remember the lyrics from the Beatles song?:

Should five per cent appear too small,

Be thankful I don't take it all.

'Cause I'm the taxman,

Yeah, I'm the taxman.

(if you drive a car, car;) - I'll tax the street;

(if you try to sit, sit;) - I'll tax your seat;

(if you get too cold, cold;) - I'll tax the heat;

(if you take a walk, walk;) - I'll tax your feet.

What it got Britain last time around was a collapsed economy and, ultimately, Margaret Thatcher. Apparently Prime Minister Gordon Brown's government has no institutional memory: It announced an immediate 50-percent tax on bonuses of more than 25,000 pounds (about $42,000), on top of regular income taxes.

It's supposed to be a one-time tax, but so was income tax when it was introduced 90 years ago. According to the New York Times, the tax (Brown didn't have the wit to call it a financial crisis responsibility fee) "represents the most direct attack on bank bonuses anywhere in the world. All banks in Britain - including the London-based subsidiaries of foreign banks - will be affected, whether they took government bailout funds or not."

Which brings us, in a roundabout fashion, back to Mr. Flaherty. Britain is introducing new taxes to deal with its deficit. The U.S. is introducing new taxes to deal with its deficit. Mr. Flaherty -- the little Mao on the tightrope -- says there's no way he's introducing new taxes to deal with the deficit. Nope, not a chance. Ain't gonna do it. Can't make me. Nya-nya-nya-nya -- see, I have my fingers in my ears.

Well, maybe. But no one except Mr. Flaherty and his boss Stephen Harper seem to believe the economy can just magically grow it's way back to good health. As Kevin Page, the Parliamentary Budget Officer, pointed out this week, Canada's population is aging and the boomers are going to be sucking more money out of the economy than they're pumping in. How are they supposed to generate all that extra economic activity, by invest their pension cheques in R&D? Can't see that myself.

The soundings from Ottawa suggest Mr. Harper plans to squeeze spending til it squeals for mercy, before he allows any wild talk about tax hikes. But the squealing starts early in this burg. Every think tank, every women's action group, every subsidized Toronto street performer thinks that curtailing their funds is another indication the barbarians have breached Canada's defences and seized control of the capital. And they make a lot of noise about it.

So Mr. Flaherty may think he can tip-toe along the tightrope forever, saving himself from joining Mr. Obama and Mr. Brown in taxland, but it's a perilous trick, and most of the crowd are betting he can't pull it off.

National Post

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