They Figure Out that The Wealth Comes From and Belongs to the Citizens - On Taxes, Look to Canada

Unlike Obama and too many Democrats who think the Government creates all wealth and owns all money. 

"Obama is our Pierre Trudeau." 

Amity Shlaes, as is her way, is being gracious and generous to Obama. m/r

On Taxes, Look to Canada | National Review Online

By Amity Shlaes

The corporate-tax angle is the focus of the headlines on the story of Burger King’s plan to merge with the Canadian chain Tim Hortons. The difference in corporate-tax rates, the United States’s 39.1 percent and Canada’s 26.5 percent, certainly provides reason for Burger King to act. That is what Warren Buffett’s decision to back the inversion transaction makes clear. But the Burger King story reflects something more than a technical tax wedge. It reflects a wedge, or even an abyss, in our two nations’ understanding of the path to future prosperity.

Consider how Canada got that 26.5 percent corporate rate in the first place. In population, Canada is a small country. Many decades ago, the nati–on followed Britain and applied heavy taxes to fund social programs. In the late 1960s, Canada elected a kind of Barack Obama, a politically oriented law professor, Pierre Trudeau, as prime minister. Trudeau advocated a “just society,” which included universal health care and pushed for Canada’s version of multiculturalism: official bilingualism. The economic consequences of this legacy played out not instantly but over the longer run, especially in unemployment. Persistent inflation and heavy debt dogged the nation. My fellow journalist David Frum has comparedTrudeau’s despoilment to “a malicious child on the beach stomping on the sand castle somebody else had worked all morning to build.”

Over the course of a long recovery from Trudeau, Canada realized it had to act to strengthen competitiveness. Competitiveness meant competitive tax rates — all kinds of tax rates. In 2006, a new Conservative government, led by Stephen Harper and finance minister Jim Flaherty, made taxes the centerpiece of its program: “Taxes will go down for all Canadians,” Flaherty said. At that point Canada taxed capital gains heavily, though even then its capital-gains rules did not punish short-term trades, as we do in the States. But in this period, revenues did not flow as the government hoped. So the government cut the capital-gains rate down to an effective 14.5 percent, below the U.S. rate of 15 percent.

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