As Trump boldly fires up American success, Canada stumbles along weakly

by
Conrad Black

Canadians should not be complacent about our tax rates and structure, nor about the state of our social services

The year ends with Canada in an oddly satisfied state of mind, politically. The United States is about to pass a tax cut and simplification bill that will excuse a majority of Americans from personal income tax altogether, enable 80 per cent of income tax payers to file their returns on a post card, reduce the top personal rate to 37 per cent and the corporate rate to 21 per cent.

No attention should be paid to Democratic claims that it is a giveaway to the rich — most middle class and lower class families would see significant tax relief under the plan. Predictions of deficit increases are also bunk. The main source of pessimism, the Congressional Budget Office, has not predicted anything accurately since the Eisenhower administration, and is basing its gloom on GDP growth at half what the Federal reserve predicts.

If the Fed is right, the annual deficit will be eliminated in less than three years and the national debt will start to shrink as a share of GDP. GDP growth should be four per cent, generating nearly a trillion dollars of additional production and transactions with minimal inflation next year.

This will effectively end the annual narrowing of the gap between the United States and China as the world’s two largest economies. It will reinvigorate the ethos and esprit of capitalism and bury the self-serving Obaman defeatist nonsense that one per cent annual economic growth and an ever-rising percentage of the population on some form of state benefit is the new normal. It will be the past abnormal.

Usually, this level of American economic activity backs very favourably into Canada. To some extent this positive influence may be mitigated by comparatively disadvantageous Canadian tax rates, which normally torques up the departure to the U.S. of a regrettable number of highly educated and prosperous Canadians. It is also possible that trade disagreements could somewhat mitigate the overflow of American prosperity into this country. The level of corruption and highly publicized violence in the United States can be relied upon to dissuade many Canadians who might otherwise contemplate moving, but avarice should not be underestimated as a motivation and life is very agreeable and not overly taxed for at least 70 per cent of Americans

full story at http://nationalpost.com/opinion/conrad-black-america-is-rising-again-canada-must-act-to-keep-up

Categorised in: Canadian News