Canada Needs Its Own “IRS Scandal”

While Canada is abuzz with the “Duffy Scandal,” the American news has been making a big deal about the “IRS scandal.”In this case, the IRS targeted groups with “conservative”-sounding names for special scrutiny.

Canada needs to have a scandal like this.

One of the most interesting parts of the IRS scandal is how the outrage is not divided along the lines of partisanship, as expected. Not only “right-wingers” are unhappy. Even diehard Obama-loving “leftists” like Chris Matthews, who would normally leap to defend “their guy” at any opportunity, are displeased.


Another high-profile leftist, Jon Stewart, is also extremely annoyed.


Why would leftists care if some goofy right-wing organization received extra scrutiny at the IRS?

The answer to this question is very important. The existence of the modern welfare state depends on the American public’s tolerance of the IRS’ privacy and property invasions. If this tolerance is ever substantially compromised, the massive state apparatus itself would be in jeopardy.

This is why Canada needs its own “IRS scandal” with the Canada Revenue Agency. The CRA is the most feared government agency in Canada. It is a huge part of our lives. People who yearn for big government know that the CRA must be perceived as “fair.” Otherwise, the modern welfare/warfare system would be threatened.

A big “unfairness” scandal at the CRA would really damage the image of Canada’s federal government. If a few cases were exposed where the CRA demonstrated systematic unfairness, those cases would be seen as representative of the agency’s activities. A large part of the public would doubt the wisdom and justice of the government. Their tolerance of the CRA would be diminished.

Some may recall the CRA bribery scandal. As far as scandals go, this probably didn’t do Canada much good. The “scandal” was about “corrupt auditors” taking bribes to help people pay lower taxes. As a scandal, it assumes the validity of the CRA rather than posing a challenge to it.

The CRA exists to extract wealth from Canadians with the threat of force. To the extent that scandals, large or small, call into question the validity of the government’s incredible taxing power, they are good.

That the only security men can have for their political liberty, consists in their keeping their money in their own pockets, until they have assurances, perfectly satisfactory to themselves, that it will be used as they wish it to be used, for their benefit, and not for their injury.

Lysander Spooner

European Union Wants to Tax Heavy Crude from Oil Sands

The European Union is falling apart. It is desperate for money. The bureaucrats in Brussels will tax anything they can.

Now the EU wants to modify its fuel quality directives, so that refiners who use oil that is “too dirty” (according to bureaucrats) must pay a tax.

Joe Oliver, the Natural Resource Minister of Canada, thinks this amounts to specifically targeted tax on Canadian oil-sands product. He says Canada will sue the EU at the World Trade Organization if they implement the changes, because the oil-sands crude isn’t any “dirtier” than many other crude imports which are not subject to the tax.

Firstly, let me note the hypocrisy when an official from Harper’s government whines about tariffs, while Harper’s government loves tariffs. “Oh yeah, taxing our stuff is bad; taxing your stuff is okay.” Typical government knavery.

On a more general level, yes the EU fuel quality directives and its associated penalties are bad for the economy. They are bad for Europe and bad for Canada. They reduce production of the taxed good and divert resources to government approved fuels. The government is in principle incapable of knowing to what extent a given quality of oil should be used.

Oil sands production is “dirty”, sure. The industry has a lot of flaws. Really, the CO2 emissions aren’t even a big deal, although that’s what everyone focuses on. But the environmental situation is still very screwed up, because Alberta is essentially a mini-petro-state. Property rights and laws of tort can rarely protect the environment because virtually all the pollution takes place on government land.

Even so, that is true of most oil. There is very little “clean” oil where you just turn on the tap and get light, sweet, succulent crude with minimal impact on the earth. Most of it is heavy and sour and difficult to get. Due to inept government regulation and interference with property rights, its production is environmentally problematic. So the European tax seems to be not just destructive, but arbitrary.

If the WTO agrees with Canada that the fuel directives constitutes an unjustified tax, they can’t force them to change it. It just means the Canadian government can put their own tariffs up to retaliate. That is bad for everyone. It would be better to just accept one dumb tax over which one has no controlnthan implement another dumb tax to go along with it. If the Canadian oil producer finds it harder to sell its oil, that’s already bad enough. Why should the Canadian consumer also be punished? It makes no sense, and only a politician or a shyster would advocate this.

Read more at Market Wire

Mourn for the Lost Penny

Every Canadian hated pennies. Even homeless street beggars hated getting pennies. If someone dropped a penny, they wouldn’t even bother to pick it up. Every Canadian seems happy that the penny is gone.

Sadly, Canadians do not realize how this loss is truly a tragedy, because it unequivocally shows how the government and the Bank of Canada have abused the monopoly over money. If you go to the BoC website, you can see that since 1914 the Canadian dollar has lost 95% of its value.

This is the inevitable result of the age-old credo of monetary cranks and inflationists. Mises wrote:

A very popular doctrine maintains that progressive lowering of the monetary unit’s purchasing power played a decisive role in historical evolution. It is asserted that mankind would not have reached its present state of well-being if the supply of money had not increased to a greater extent than the demand for money. The resulting fall in purchasing power, it is said, was a necessary condition of economic progress. The intensification of the division of labor and the continuous growth of capital accumulation, which have centupled the productivity of labor, could ensue only in a world of progressive price rises. Inflation creates prosperity and wealth; deflation distress and economic decay.

All this time, rather than having pennies lose value until they must be eliminated, pennies should have been increasing in value. We should have been able to buy more stuff with pennies today than 50 years ago. That is how a free economy with a stable money supply works. Money is saved and invested into more production. Workers create more goods, and so the monetary unit can purchase more stuff. Instead, the Canadian government and its central bank have distorted the economy and redistributed wealth by means of monetary policy. Monopolies are always bad, and a monopolization of money is the most dangerous of all.

The death of the penny should be a blaring wake-up call to Canadians. The Bank of Canada should be shut down, the government should abolish legal tender laws, and Canadians themselves should decide what their money should be. Otherwise, expect to someday bid farewell to nickels, dimes, and even loonies as the government continues its destruction of our currency.

— Read more at the Mises.ca

Economic Ignoramus Stephen Poloz to Replace Carney as Bank of Canada Governor

So far, we don’t know much about Mr Poloz on a philosophical level.

Based on the little we do know, I think he is a bad choice. He has a PhD in economics, so he likely knows very little about economics.

We also know he has spent most of his life as a bureaucrat. Most of his career has been “public service” (cough cough) at the BoC and Export Development Canada. I’m sure he made lots of friends in the export industry there. Friends who will really appreciate a subsidy in the form of monetary inflation.

Back in late 2008, he wrote a commentary on the financial crisis. In essence, he appeals to animal spirits, like all Keynesians who are baffled by economic law. He blames it on nothing more than a change in psychology following the 9/11 attacks. Everyone had a “live for the moment” attitude, he says, and ultimately this created the housing bubble.

The first sign of failure in economic analysis is a reliance on nonscientific pop-psychology. He completely fails to identify the source of bubbles and account for why business cycles occur. The culpability of central banks is nowhere challenged. He pleads agnostic about the ability of economists to understand the cause of bubbles at all. He does not understand the Austrian theory of the business cycle.

Based on these facts, I can safely conclude he is an Keynesian/inflationist/mercantilist. Sort of like, well, all central bankers. He may prove to be better or worse than Carney. Only time will tell.

Ultimately, it matters only a little who is the head of the Bank of Canada. The system as such is the problem, and not so much the individual people in charge.

— Read more at BoC’s website — 

Harper: Free Trade is a Tax Break for China

Harper was criticized the other day for wanting to increase taxes on various imported consumer goods.

There is no defense for raising taxes ever. This is even more important when Canada will be soon in recession. So what is Harper thinking? He rightly pointed out that the Liberals had voted against budgets in which there were some tiny tax cuts. Okay, sure, the Liberals lack any principled objection to higher taxes. What was his rebuttal to their criticism on the tariff issue?

“What the Liberal Party seems to stand for, Mr. Speaker, is that somehow we should give tax breaks to emerging economies like China.”

OMG, my brain just exploded from the unbelievable stupidity of that statement. I love a good cheap shot at a Canadian political party as much as the next guy, but Harper’s statement is just dumb.

So not taxing imports is a tax break to the countries from which we are buying those imports. So a free trade policy is a tax break for our trading partners.

That is incoherent, protectionist nonsense. First of all, the importer pays the tax, not the exporter. So China is not getting the tax break, per se. It is the one importing Chinese stuff.

But then this is kind of like saying it’s a “tax break” if the government taxes anything less than 100% of your income. The meaning of “tax break” is clearly being twisted. A “tax break” is meant to be a means of reducing a tax liability that already exists. The absence of a tax is not a tax break. Adding new taxes is not the same as taking away tax breaks. The underlying philosophy revealed in Harper’s words is that the government rightfully owns everyone else’s wealth, and letting people keep anything is a tax break. The whole notion is economically utterly perverse.

The case against protectionism is logically irrefutable. Harper, like virtually all politicians, is a mercantilist who thinks protectionism is good (for his friends), meaning he is no ally of capitalism and free trade. He is a classic Canadian crony prime minister.

— Read more at CBC News. —

LOL Justin Trudeau

Ok, so it is very possible that Justin Trudeau is an annoying, spoiled brat who hungers for power. Let us be charitable and see if we can find anything good about Justin Trudeau.

Now the leader of the Liberal Party, Trudeau spent his first day in the House of Commons attacking Harper over proposed tax hikes on imported goods, including iPods. That’s good! Of course, the NDP was also attacking Harper over these tariffs. Obviously the opposition is purely political. After all, just a few years ago the NDP was in favor of iPod taxes (and the Conservatives were opposed — politics makes me sick).

If Trudeau devoted himself to arguing against raising taxes, that would seriously be great. I would probably become a fan. Unfortunately, that will never happen. Trudeau actually loves taxation in general, because it is that on which the Canadian system of West-to-East transfer-payments depends. He must realize that the tariffs he is arguing against will in no small part pay for stuff in Quebec.

Speaking of which, people seem unclear of where he stands on the separatism issue. The Tory attack ad makes him seem to favor Quebec separation, but Trudeau had said he would only favor Quebec independence if “Harper succeeds in imposing his values on Canada,” or something.

I find that interesting. Firstly, since Trudeau blames Canada’s problems on Alberta, I am sure he would love to punish Alberta if he had an opportunity to impose his values on Canada. Would he then favor Alberta separatism if Albertans objected to his values? Of course not. Secondly, if Harper’s values are so bad for Canada (and they are), wouldn’t that justify Alberta independence as well? Again, Trudeau would say no — because even with Harper in charge, he would not want to jeopardize the essential status quo of the Canadian power structure, which depends on the extraction of wealth from any “have” provinces like Alberta (but they won’t be for long, because its government is quickly grinding them to ruin).

Basically, Justin Trudeau is a hypocrite and a jerk. I suspect he would happily argue in favor of tariffs doing so would benefit him politically. I also suspect he would never seriously support Quebec’s secession if the issue came up in real life.

Everyone should support free trade. It’s not even a question. But everyone should also support the freedom to choose separatism, because it is the ultimate check on centralized power.

Yet power-hungry politicians always want more territory under their dominion, not less. Trudeau really doesn’t support separatism at all. He wants a united Canada so that Ottawa can continue subsidizing the politically connected elite. He would never really support the independence of Quebec beyond a few oracular assertions, because then Quebec would actually have to cut its spending.

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