One necessary skill a good politician must have is the ability to describe an idea or a policy in such way that it appeals to a large group of people. Usually this involves heavy doses of salesmanship and at least a modicum of dishonesty. The most successful example of this that I can think of has been the Right's amazing and ongoing ability to conflate all taxes as being pure evil so that ordinary people believe that raising taxes on the wealthy is unjust and will hurt everyone. There have been two main arguments that conservatives have used. First, one day you might be extremely wealthy, and so you wouldn’t want to pay high taxes, would you? This argument is too dumb to even bother with. The second point is that taxing rich people even at a reasonable clip would hurt the economy, leading to recession and high unemployment. You might lose your job because the Weston family (Net worth: $16 billion) has to pay a few extra million in taxes.
The economic theory behind the second argument is commonly referred to as trickle-down economics, and it has been debunked and ridiculed by most credible economists, notably Nobel prize winner Paul Krugman. The evidence against this theory is about as clearcut as anything can be. Governments all over the world have lowered taxes on capital - rich people and corporations - for 40 years. What little real economic growth we’ve had has gone almost entirely to these wealthy people, while real wages for middle and lower income people have dropped dramatically. The top 1 percent now own almost half of the world. This concentration of wealth has led to housing bubbles, cuts to government services, stagnant aggregate demand, political instability, environmental degradation and a host of other problems. Trickle-down economics has been an unparalleled disaster.
Which brings me to the Liberal government’s recent budget. Capital gains - which are the profit you make when you sell a capital asset such as a stock or a piece of real estate that you don’t live in - are 50 percent tax exempt. This means that if you make a thousand bucks on a stock, you are only going to be taxed on 500 bucks. At a 20 percent rate, this means you would pay 100 bucks, or 10 percent overall. The Liberals, success hating communists that they are, raised the inclusion rate from 50 percent to 66.7 percent, but only on any gains in a year that exceed $250k. Based on last years tax returns, the government said this increase would affect 0.13 percent of taxpayers (about 40,000 people) but it would raise $19 billion over the next five years - this should tell you a lot about who this change will affect. The reaction by the business community and their media mouthpieces was filled with anger and dire warnings about how bad this would be for Canada's economy; in other words, they trotted out the same old trickle-down argument they've used for decades. I guess we have to admire their consistency, right?
But sensing that perhaps they needed a better talking point, the galaxy brains at the National Post came up with the example of people who inherited a vacation home from their parents and now need to sell it and thus will realize a huge capital gain. This seems like a fairly infrequent occurrence but lets do the math. If the home was sold for a $500k profit, under the old inclusion rate an Alberta resident would pay $83,347, or a tax rate of 16.67 percent. Under the new formula, the tax would be $103,012 ($19,665 higher), for an effective rate of 20.67 percent. But now compare this to an actually working self-employed person in Alberta who nets $50k for the year -which is below the average wage in Canada. This person would also pay an effective tax rate of 20 percent. The difference is they are left with only 40k to live on, while the cottage owner walks off with nearly 400k in after-tax profit. So all this tax raise does is it brings the tax on investments closer to the rate working people pay - but again, only after $250,000 of gains, an amount 80 percent of Canadians can only dream about.
Pierre Poilievre is a skilled politician. He has refused to address the new capital gains taxes directly, saying only that they are an "attack" on small business, which isn't true at all - small business owners can make up to $1.25 million in capital gains tax free, with an additional $750k at a 33 percent inclusion rate. He also wrote that "Trudeau and his wealthy friends won't have to pay a cent more," which is likely also false but consistent with Poilievre's strategy of turning everything into a referendum on Trudeau. But what Poilievre hasn't said is if he will reverse this change if he wins the next election - but don't worry, he will. His evasiveness on this subject is consistent with all his other positions. For example, Poilievre says he will cut Trudeau's "out of control spending" but won't give details on where the cuts would come from. He says he will "fix" immigration but won't say exactly what that means. Poilievre has also promised to cut taxes on working people, but again without a single iota of detail on what that might look like. (The only firm promise he's made is that he will eliminate the carbon tax, despite the fact that 80 percent of households get back more in rebates than they pay.) Poilievre is careful to couch everything he says to appeal to working class voters, but in such a way that he can't really be pinned down on anything.
Meanwhile, it's the Liberals who have actually done things that help workers. Minimum wages let unskilled workers stay afloat when there is a labor surplus. The Liberals are for minimum wages and have raised the federal rate once and are talking about doing so again. Poilievre has voted against the minimum wage multiple times and was against raising it. Unionized workers earn about $5.14 more per hour than non-unionized workers, and the Liberals are decidedly pro-union. Poilievre has repeatedly advocated for ‘right to work’ ( a completely fraudulent name) legislation that would make it far harder to form unions. The Liberals have also cut the middle income tax bracket rate from 22 percent to 20.5 percent, although by eliminating certain deductions like the child sports credit, that cut became more or less a wash for many families. Perhaps most importantly, the Liberals brought in the Canada Child Benefit. While it is not technically a tax cut, it works the same way, putting up to $7400 per child in the pockets of working families. The CCB was specifically implemented to help single, working moms afford daycare, and according to the government's data, it has lifted 1 million people out of poverty in this country.
Despite all this, Conservative support among working class voters is sky high. Part of this is due to Trudeau, who comes off to many as a disingenuous, entitled pretty boy. But it's mostly due to a classic bait and switch strategy. In their book Let Them Eat Tweets, the authors Jacob Hacker and Paul Pierson coined the term 'plutocratic populism' to describe the US Republican Party. Stupid and silly culture war feuds on social media about gender pronouns and kooky university professors are used to attract popular support to a party that really only has policies that help rich people and corporations. Poilievre is using this same formula by positioning himself as a champion for ordinary Canadians - “the have nots versus the have yachts” as he likes to say. He blathers about "wokism" and how Trudeau is in league with the "globalists" and other elites who have betrayed the working class. But who are the elite? In Poilievre’s brain, its university professors, scientists, government workers, the media and other politicians - not himself. Who’s missing from this list? Business elites. Who has more wealth and power in Canada than all of other elites combined? Business elites.
I think the next election is Poilievre's to lose, so he will get a chance to put his money where his mouth is. Will he enact impactful policies that help middle- and lower-income Canadians? The track record of Trump, Boris Johnson and others who have sung this same tune isn't encouraging. Neither is Poilievre's own record, especially his deluded notion that balancing the budget will magically fix our economy. If you understand basic math, you can figure out that there is no way to significantly cut taxes and eliminate the current budget deficit - it isn't possible.
Meanwhile, Poilievre will keep stoking working class anger and resentment about trivial nonsense that doesn't have even the slightest impact on most people's lives. For 40 years, conservatives have been fooling people into voting against their own economic interests. Why would they stop now?
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