June 2022
In response to a letter submitted by Barrie-Innisfil MP John Brassard (MP says new luxury tax will ‘devastate’ manufacturing, Letter to the Editor, 9 June), columnist Peter Bursztyn wrote his own letter in response (Reader says luxury vehicle owners should pay more tax, Letter to the Editor, 11 June). Well, here is my response to Mr. Bursztyn:
The rich do pay their fair share when buying luxury items. The GST on a $110, 000 car is a lot higher than that on a $30, 000 car. While I personally don’t see a need for a really big vehicle, I don’t begrudge anyone who wants to own one. Buy what you want, what you need and what you can afford. I own an SUV, a Ford Escape, which I find to be useful in Barrie in the winter. I also own a VW Golf, a more fuel-efficient vehicle, which I drive in the summer.
By the way, I’m all for emitting more carbon dioxide, which is a naturally occurring gas that is essential to all life on earth, and is essential for photosynthesis. The more carbon dioxide in the atmosphere, the greener the planet literally is, not just figuratively. Experts like Greenpeace co-founder Dr. Patrick Moore, who is an ecologist, argue that the Earth is actually carbon deficient.
There are other emissions from burning fossil-fuels that are harmful to the environment, but let’s at least get this idea that carbon dioxide is a pollutant off the table.
Mr. Bursztyn’s comment that the luxury vehicle tax would “…cause a $2.9-billion drop in sales of ultra-luxury goods” is hardly something to celebrate. That $2.9-billion drop in sales could have an impact on the companies selling those “ultra-luxury goods,” which could have an impact on the profitability of the company, potentially resulting in job losses. I don’t think it takes a PhD in Business Administration to figure out that it won’t be the highly-paid executives who lose their jobs, but the more modestly-paid employees at the lower end of the food-chain. Those who don’t lose their jobs may not see raises or bonuses or worse, may see their wages cut. Is Mr. Bursztyn in favour of job losses and salary cuts?
Let’s get rid of this idea that profits are a dirty word. Yes, profits do frequently go to the owners of the company, be they individuals or multiple shareholders, and to the executives, but profits also go to the front-line employees in the form of higher wages, or are re-invested into the company so they can expand, replace old equipment, or invest in the development of new products.
Speaking of shareholders, some of those shareholders are pension plans, Registered Retirement Savings Plans and Registered Education Savings Plans, so even if you don’t directly hold stocks in a company, you may indirectly hold them through your investment plans.
Free-market capitalism allows those who develop a better product to sell more of that product than their competitors, thus making more money and higher profits. Socialism dictates that successful people/companies should have more and more of their money confiscated by the government so that the proletariat can have more, or at least that’s the theory of socialism.
Sure, we all have come across something that has made us say, “Who did they have to kill to afford that?” However, unless the owner obtained that item through criminal activities, including actually killing someone, then I say good for them. I’d probably buy one too if I could afford it.
Mr. Bursztyn also makes note of “People need to understand that multi-millionaires have many ways to avoid income tax. As ‘Oracle of Omaha’ Warren Buffett famously said years ago, he pays less tax than his secretary does. He then admitted this was fundamentally wrong.” OK, who is their right mind would pay more tax than they have to? We all sift through our files and shoe boxes containing receipts at tax time, looking for things that will qualify for write-offs and tax breaks, thus reducing our taxable income. It doesn’t take a high-priced accountant to find these write-offs and tax breaks either. It just takes a competent accountant. Remember, tax avoidance is perfectly LEGAL, as the tax code that allow you to it. It’s tax evasion that’s illegal.
As for Warren Buffet, can Mr. Bursztyn point out to me the articles that indicate what Mr. Buffet has personally done to correct this situation? Has Mr. Buffet made a voluntary payment to the U.S. IRS to cover the short-fall? There’s nothing stopping Mr. Buffet from sending all his money to the U.S. government and applying for welfare.
By the way, no government on either side of the political spectrum will actually take away the tax breaks enjoyed by the rich, because their rich donors enjoy those tax breaks.
As for the “Conservative theme” of cutting taxes, “...often increasing the deficit, the cost of today’s expenditures is kicked down the road — leaving our children and grandchildren with more debt,” does Mr. Bursztyn realize that with the record debt levels at both the provincial and federal levels, foisted on us by both left and right-wing parties, we are already kicking these expenditures down the road? Does he not see that our social services are already suffering because of the tax money that is required on just servicing the debt, also known as paying the interest on that debt, without even reducing the debt level? In Ontario, interest payments on the debt is the third largest budget item, behind healthcare and education.
Basic economics shows us that it’s actually economic growth, not increases in taxes, that gives the government more money to pay for our social programs, pave roads and build schools. Tax breaks to the average citizen will give them more money in their pockets to pay for everything from the necessities, like food and housing, to the extras, like dinner in a restaurant or a new TV. That is of course, as long as a tax increase in another area doesn’t negate the reduction, like the cancellation of the annual car registration fee being essentially negated by the annual increases in the federal carbon taxes.
Speaking of ” Shouldn’t drivers pay for the roads we use?”, I agree. So, does this mean that Mr. Bursztyn agrees that those who drive electric vehicles, the same one who don’t pay the multiple taxes that are charged for every litre of gasoline purchased, should be paying some sort of E/V tax?
By the way, that is going to have to happen when we are all forced to drive E/Vs and the government is going to have to get the money to maintain the roads from somewhere.
Further regarding E/Vs, can we stop calling them “green” just because there is no tailpipe? Production of the battery is very carbon intensive, along with the issue of exactly how the electricity used to charge the battery is generated. Unless it’s from nuclear or hydro generation, the electricity isn’t 100% green.
Can we also dispense with the argument that if you don’t like the high price of gasoline, then maybe you should consider buying an E/V? If paying over $2 per litre of gasoline is a problem, how is buying an E/V, the average of which are in the $60, 000 range, going to help with the household budget? You may save on the back end, but there’s still the issue of the monthly payment on that $60, 000 E/V. How many years are you going to have to amortize that purchase to get the monthly payment down to a reasonable level? Unless the interest rate on your loan is zero, the longer the amortization, the more money you pay overall in interest.
Finally, it’s also interesting to see that many private sector unions threw their support behind the PCs in the last election, forsaking their usual political buddies in the NDP. One political commentator noted that the NDP and the Liberals no longer represent blue collar workers, but instead are more concerned with urban elites, champagne socialists and ideological activists.
It was not out-of-character to see Doug Ford loading masks into the back of his own pick-up truck in Markham, or personally assisting residents in his riding in Etobicoke during a snowstorm last winter. Could anyone imagine Justin Trudeau or Jagmeet Singh doing the same, which is probably one of the reasons blue collar workers can relate to Ford more than Trudeau or Singh? If anything, they would have their butler do it.
Another letter writer Anthony J. Palmer commented that “The Conservatives concern themselves with looking after business rather than the average family.” Does Mr. Palmer wish to claim that the Liberals, and even the NDP is the few instances when they have formed provincial governments, don’t do the same thing when they’re in power? Even the NDP has learnt, sometimes the hard way, that you can’t chase all businesses out of the country.
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The original letter by Barrie-Innisfil MP John Brassard:
Marine operators in Barrie-Innisfil and workers in the boating industry across Canada are bracing for yet another new NDP-Liberal tax that will devastate Canada’s car manufacturing sector, boating sector, and aerospace sector.
Bill C-19 will impose a new luxury tax on automobiles and aircraft valued over $100,000 and vessels valued over $250,000. As the Canadian economy emerges from the pandemic and businesses struggle to recover, only Justin Trudeau would think imposing new taxes on businesses that create and maintain good manufacturing jobs is a good idea.
The Parliamentary Budget Officer estimates the tax, which is set to take effect Sept. 1 pending parliamentary approval, would bring in less than $200 million per year for the five years, but cause a $2.9-billion drop in sales of the vehicles over the same period.
I have met with the National Marine Manufacturers Association (NMMA), local marine operators and the message is the same across Canada — this luxury tax will kill jobs and damage the industry at a time when businesses are already struggling to bounce back from the pandemic.
At a meeting this week, I learned the disturbing results of a four-week study conducted by the NMMA that showed $65 million in lost sales and 69 lost jobs.
They also told me that thousands of jobs are at risk in the industry and along the supply chain because of this new unfair tax are are middle-class jobs, predominantly in rural communities and many are right here in Barrie-Innisfil and in other communities across Ontario.
The NDP-Liberal government has unleashed an avalanche of uncontrolled spending and failed to present a plan to control inflation and make life more affordable for working Canadians. Their answer to the cost-of-living crisis that is hurting families is to impose job-killing taxes that make life even more expensive.
Conservatives have been pushing for substantial changes to Bill C-19 to address industry concerns. I believe it is critically important for the federal government to support Canada’s boating industry that provides 30,000 full-time jobs in the sector in Ontario — 75,000 nationally and contributes $5.6 billion to GDP nationwide each year.
Conservatives will continue to be the voice of the millions of Canadians left behind in Justin Trudeau’s economy who are looking for relief from the cost-of-living crisis with common-sense solutions to leave more money in Canadians’ pockets.
John Brassard
Barrie-Innisfil MP
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The letters by Peter Bursztyn and Anthony J. Palmer:
I must be missing something, but Mr. John Brassard, one of Barrie’s MPs, is protesting an increase in taxes on luxury goods bought by the wealthiest members of our society.
“… New NDP-Liberal tax that will devastate Canada’s car manufacturing sector, boating sector and aerospace sector. Bill C-19 will impose a new luxury tax on automobiles and aircraft valued over $100,000 and vessels valued over $250,000.”
The cars most people buy cost $25,000 to $35,000. To exceed $100,000 you must look at the Cadillac Escalade and Lincoln Navigator, both around $110,000. Sorry, Mr. Brassard, but I am finding it hard to squeeze out a tear of sympathy for folk who might have to emit less carbon dioxide by downsizing a little.
A new Piper Cub or Cessna 172 cost well over $200,000, but neither are made in Canada. The only Canadian manufacturer is Bombardier, which manufactures corporate jets. If you are in the market for a private jet aircraft and cannot afford the new tax, once again, my tear ducts remain dry.
For boats, the proposed tax apparently only kicks in at $250,000. I wouldn’t know how to look up boat prices in that range. My boating is more in line with aluminum fishing boats powered by an outboard hanging on the transom. I’m pretty sure these run well below $30,000.
Mr. Brassard then makes a statement carefully phrased: “The Parliamentary Budget Officer estimates the tax, which is set to take effect Sept. 1 pending parliamentary approval, would bring in less than $200 million per year for the five years, but cause a $2.9-billion drop in sales of the vehicles over the same period.”
The correct way to say this is: “Over five years the tax would bring in less than $1 billion, but cause a $2.9-billion drop in sales of ultra-luxury goods.” Sounds far more reasonable that way.
People need to understand that multi-millionaires have many ways to avoid income tax. As ‘Oracle of Omaha’ Warren Buffett famously said years ago, he pays less tax than his secretary does. He then admitted this was fundamentally wrong.
Taxes on expenditures are harder to avoid. If you want to buy a Bentley Mulsanne, Mercedes Maybach or Maserati Quattroporte in Canada, I see no reason why you shouldn’t pay a little extra in tax. If the rich are not taxed, the rest of us must make up the shortfall.
That seems to be the Conservative theme. When they come into power, they cut taxes — it’s why people vote Tory. But we want good schools, a safe society, decently paved roads and hospitals capable of taking care of us should the need arise. When government cuts taxes, often increasing the deficit, the cost of today’s expenditures is kicked down the road — leaving our children and grandchildren with more debt.
I’m thinking of your government’s removal of the annual car registration fee and reduction of the fuel tax — just in time for the election. Shouldn’t drivers pay for the roads we use? How about subsidizing the price of electricity? But electricity must be paid for; we just pay by increasing debt.
Will you explain to your children and grandchildren, Mr. Brassard, that this debt was enlarged by your party and that you didn’t want to tax the wealthy on their luxury goods?
Peter Bursztyn
Barrie
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I agree 100 per cent with Peter Bursztyn’s comments.
My wife and I, who are both in our 80s and support a disabled son, live on just my Canada pension and our combined social security. We are being asked to pay city taxes and since we live in the annex, in the very south of the city where we do not receive many of the city’s services, in my opinion, we are being gouged and I am not happy with it, but the rich who can afford it are less liable to pay their fair share, since they want to hold onto their gains and can find ways in which they can avoid paying their fair share.
The Conservatives concern themselves with looking after business rather than the average family.
Anthony J. Palmer
Barrie
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Sources: LETTER: Reader says luxury vehicle owners should pay more tax – Barrie News (barrietoday.com), LETTER: The rich aren’t paying their fair share – Barrie News (barrietoday.com), LETTER: MP says new luxury tax will ‘devastate’ manufacturing – Barrie News (barrietoday.com), COVID-19: Premier Doug Ford seen personally picking up mask donation from dental office | National Post, What Doug Ford’s blue-collar victory means for Canada’s progressives – POLITICO, Buffett says he’s still paying lower tax rate than his secretary (cnn.com), Buffett Rule Definition (investopedia.com), https://www.bayshoreyachts.com/, LETTER: MP says new luxury tax will ‘devastate’ manufacturing – Barrie News (barrietoday.com), Trudeau’s new luxury tax on cars and boats is more fake class warfare | Toronto Sun.
