Either He Lied or He is a Moron. Neither is Good
By Gord Gekko
web
posted June 1997
If you happened to catch an interview with NDP MP Nelson Riis (Kamloops)on
"The National" during the election, you might have seen him
rail away at corporations that get away with murder, that murder specifically
being that they pay no tax while ordinary Canadians bare the real burden.
Riis specifically picked on a company called Silcop Ltd, a company that
has 570 stores, such as Mike's Mart, Becker's and Mac's, across Canada.
Said Riis on the program, "Their sales were $600 million last year
and their profits were $800-million, and they paid no income taxes at
all."
Like the people who always mess jokes up because they repeat it only half
correctly, Riis got some parts a little wrong.
For instance, Riis rattled their profit off at $800-million. Not bad,
right? Wrong. Silcorp actually had a profit of $8.7-million. Riis was
only off by $791.3-million.
What Riis actually did get right was the fact that Silcorp didn't pay
taxes last year, and won't likely until 2001. The company came out of
bankruptcy protection just last year and was given tax breaks in a bid
to help it survive.
The company made $8.7-million on sales of $634-million, but didn't pay
taxes because it had lost $100-million between 1989 and 1992. I'm sure
Riis wishes he could tax losses to.
As explained in a Toronto Star article, the company is currently renovating
stores and hopes to increase their profits. Who wins out?
First, the employees. Of course, to socialists like Riis, companies like
Silcorp don't have employees, just white males in suits.
Second, how about people who own stock in the company. Riis, and people
like him, like to portray the average stock holder to be Conrad Black,
but the fact of the matter is most Canadians own stocks. Do you have a
pension? You own stocks, where do you think that money comes from? As
the story pointed out, people counting on their pensions might be happier
if Silcorp doesn't go under if their fund owns Silcorp stock. (I wonder
if Riis owns stock?)
Riis, and the NDP, called for a minimum corporate tax because they believe
that corporations pay nothing. The money derived from those taxes would
be used to try and create jobs and increase social program spending.
Hopefully last month's little piece on corporate taxation dispelled the
myth of companies dancing away paying no tax.
According to Statistics Canada, Canadian corporations earned less than $14-billion in profit after taxes in 1996. By comparison, the GST, by itself, pulled in $17-billion.
What the New Democrats forget is that corporations pay anywhere between
32 and 41 per cent of pretax earnings. A minimum corporate tax would simply
be another reason for companies to layoff workers, assuming some of the
smaller don't go under.
What would have happened to Silcorp with a minimum tax? Who knows, but
there is a good chance that the 6 000 employees of Silcorp would have
joined 1.5 million other Canadians wondering why all this great social
spending didn't get them another job.
So why did Riis misquote Silcorp's actual profit by nearly $792-million?
The first reason might be that he simply lied in an attempt to save his
party from once again not having enough seats in the House of Commons
to be recognized as an official party.
The second reason might just be more dangerous. Riis may simply be a moron,
the type of person who simply refuses to acknowledge facts. Riis thinks
that businesses should be taxed more to provide social programs to those
in need, forgetting that businesses that close down effectively add more
people to those lines. Riis, worried that Canadians are tired of being
reamed for more money, looks to a group he believes has endless pockets.
Those endless pockets, derived in a manner that Riis apparently doesn't
understand, is the ticket to his socialist paradise.
Riis, by training, is an educator, but has been the New Democrat spokesperson
for Small Business, Regional Expansion and Parliamentary House Leader
for the Federal Caucus (in which capacity he served on the Board of Internal
Economy). For five years he acted as Deputy Leader of the Federal Party.
He currently serves as the spokesperson for Finance, Taxation and International
Financial Institutions. With this type of experience, looking over the
real numbers, how could he come to the conclusion that businesses are
getting off so lucky?
It can only be that Riis is a moron. 