Lessons from Canada
I just got back from a short trip to Canada, the land of government health care and tight bank regulations, where business is booming. From my hotel room in downtown Toronto, I could see construction cranes everywhere. The Globe and Mail had a fascinating report on a construction company manager in Winnipeg who was learning the language of the Cree tribe and creating a new apprenticeship program for First Nations people in large part because he was facing a serious labor shortage.
Yeah, that's right: in Canada, they can't find enough construction workers to fill all the jobs. And there's a good reason (which has nothing to do with zoning or taxes or fees on developers): The banks in our neighboring country to the north have always been more tightly regulated, so they didn't have the same meltdown we saw here in the USA.
Then I came back and read that Meg Whitman, candidate for governor of California, wants to eliminate the capital gains tax in the state. I like the Huffington Post headline: "Meg Whitman tax plan: she stops paying hers."
There are two types of people in the world, the rich and the rest of us, and the rich quite often don't work for a living. Whitman, for example, doesn't have a day job. She pays the bills with the money she makes by investing the billion dollars or so that she racked up working at eBay.
Actually, she probably doesn't invest much of it herself these days; she hires someone else to do that. Which means she doesn't do anything at all to earn the money that comes in each week.
That income is called capital gains and the HuffPo estimates that she's bringing in enough that she'd probably owe the state about $4 million a year in taxes at current rates. If she gets elected, and manages to repeal the capital gain tax, she won't pay any taxes on that money at all.
Which means the state will be even more broke or that the rest of us suckers, who actually go to work every morning, will have to pay more to make up for it.
I suppose next she'll want to deregulate the banks.