Apr 252012
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NDP's Andrea Horwath reclaims social contract.

by Linda McQuaig

It's hard to fight a class war without a billionaire onside. Hence Andrea Horwath's dilemma.

The Ontario NDP leader has thrown down a gauntlet of sorts — demanding, or at least politely requesting — that Dalton McGuinty's Liberal minority impose a new slightly higher tax rate on Ontarians making more than $500,000 a year.

The move is a small toe-in-the-water towards restoring the progressivity that's been stripped out of the Canadian tax system. But it's also a bold unlacing of the stays on the political bodice which has confined mainstream Canadian politicians for the past few decades.

Of course, US President Barack Obama is paving the way.

But it's easy for Obama; he has a billionaire backing him up. It's doubtful Obama would have had the audacity to suggest the rich should pay tax rates as high as their secretaries, had the idea not been suggested by Warren Buffett, one of the richest men alive.

Obama has even dubbed his proposed new tax the "Buffett Rule". So that it's clear this isn't just some idea thought up by the President of the United States; it has the full clout and authority of a billionaire.

Horwath, on the other hand, is out there riding bareback, taking on the most powerful forces in Canada all by herself, showing more boldness than this country has seen in a while.

Horwath is showing boldness that in recent years seemed to belong only to the political right.

Actually, she's showing the kind of boldness that in recent years has largely been confined to the political right.

That boldness – along with enormous financial support from the wealthy ???? has been key to the phenomenal success of the new conservative movement.

Conservatives have managed to peddle policy changes — notably tax cuts for the rich — that offer no benefit to ordinary citizens and in fact undermine public welfare by depriving government of revenue needed for social programs.

They've pulled this off partly by being sneaky, but also by forcefully defending their positions.

This has enabled them to present themselves as tough and principled — even when there's no principle beyond enriching themselves and their allies — giving them an aura of strong leadership.

By contrast, their opponents have often come across as unable or unwilling to articulate the case for progressive policies.

Take, for instance, the issue of progressive taxation — the notion that tax rates rise as income rises. For decades, it had been accepted by all political parties in both the US and Canada as central to the postwar "social contract" — the implicit bargain which stipulated the economy would run on capitalist principles, but that capitalism's harsh effects would be mitigated by social programs protecting the wellbeing of the citizenry.

Starting in the 1970s, the conservative movement set its sights on eliminating the second part of the bargain. Its method was the demonization of taxes.

As the well-funded anti-tax campaign swept over the political landscape, politicians of all stripes cowered or climbed on board, abandoning the fort of progressive taxation as soon as it came under fire, without even putting up a fight.

The campaign was ostensibly against all taxes, but its real goal was reducing taxes on the rich. (And it succeeded. Statistics Canada numbers show that between 1992 and 2004, the actual tax rates paid by the richest .01 percent of Canadians dropped by 25 percent, while the actual tax rates paid by the bottom 95 percent dropped by a mere 1 percentage point.)

Now, into this abandoned frontier rides mild-mannered Andrea Horwath, daring to go where no mainstream politician has gone in a long while.

The guns are out for her. On CTV, businessman Jim Doak described Horwath's tax as "ethnic cleansing" of the rich.

Similarly, Wall Street titan Stephen Schwarzman denounced an attempt by Obama to close a tax loophole for hedge funds managers as "war — it's like when Hitler invaded Poland."

Another possibility is that higher taxes on the rich aren't about war or ethnic cleansing, but about restoring the social contract that used to bind society together.

If Horwath can make that point with boldness and conviction, she might succeed even without a billionaire watching her back.

About Linda McQuaig

Linda McQuaig is a journalist and author. Her most recent book is The Trouble with Billionaires, (co-authored with Neil Brooks). This column originally appeared in The Toronto Star. eMail: linda@lindamcquaig.com

Website: lindamcquaig.com

© Copyright 2012 Linda McQuaig, All rights Reserved. Written For: StraightGoods.ca

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