Smitherman Proposes a New Tax Grab

In its today’s issue, The Globe and Mail reports that George Smitherman, the Liberal who is determined to win the position of Mayor of Toronto, has proposed a new employment initiative.

His good intentions this time are directed toward solving the city’s problem with the youth unemployment. Yes, that’s a real problem, because the rate of unemployed among the people aged 15 to 24 was about 16 per cent in July (which is a drop from the high December rate of 18.5 per cent).

However, if we look closer at his noble proposal, we would find out that his idea is nothing more than meddling in the affairs of the Toronto’s businesses, which will hardly resolve the issue.

For starters, Smitherman wants to create a $10-million city fund, which will supposedly be used to subsidize companies willing to hire young people. The fund would not be financed directly by the city, the money for it will collected through imposing new tax on Toronto’s businesses specifically for that purpose. He will also force companies and firms doing work for the city, like transit companies, Toronto Hydro and the police, to hire younger workers.

Do we need to spell it out that this will turn into another money-grabbing scheme with very little practical effect?

First of all, since it is a sizable fund, they will need people to run it. As with every government enterprise, that will bring to the city payroll a whole new flock of bureaucrats with questionable qualifications. After they cover all of their expenses, there could be not much money left for the companies that need to be subsidized. With the eHealth fiasco under his belt, it is hard to imagine that Smitherman would appoint any frugal and responsible public servants to run the fund.

The esteemed candidate for Mayor plans to get the money by increasing the commercial property taxes, which will affect all businesses. However, the subsidies will go to the select businesses that hire younger people. What if a business requires highly skilled workers, who need to be trained for years before getting the job? If they are not in the “youth age bracket” the company will end up paying the tax with no chance to get anything back. That is nothing more than a punitive tax supposed to finance a not very bright social engineering scheme. For those of us who had the amusing opportunity to grow up in Eastern Europe under communism, that resembles the so-called “bachelor tax”, which forced single people to pay from 12% to 25% of their income (the amount grew up with the age) in order to support families, although nobody knew where the money was going eventually.

And the last laughable part of Smitherman’s plan is that he will make big unionized companies conducting business with the city hire more young people. If I didn’t know him very well, I would have thought that this promise was an attempt at humour.

The majority of those companies are heavily controlled by their unions. Unions are so obsessed with seniority when considering employment that it’s not funny. They will fight to the last drop of blood to keep even the worst worker if he or she had worked for the company for long time. In my contact with unionized companies I have seen many of them where the stubborn unions have blocked the hiring of capable young people just to keep their older members under protection.

Smitherman should know that, he must have seen it when he worked for his mentor and supporter Dalton McGuinty, who cost the province of Ontario hundreds of millions of dollars wasted to appease the labour unions. I am sure that he knows it, and all that charade’s purpose is to win the young people’s votes. After he wins he will go into the old and tried politician’s amnesia.

Those “wonderful” goody two-shoes progressives will never learn that getting involved in a business with the purpose to make it better for society (from your twisted point of view) has always ended up in disaster.

So, to summarize it, Smitherman is a sophisticated man (even if we ignore his  education). He offers a sophisticated tax grab that will make the progressives happy and of course those ignorant greedy capitalists who are taxed to death would never know how parting with their money greatly benefits the society.

What a contrast with Rob Ford “The Buffoon” who can’t come up with any intellectually elevated scheme, other than simply stating that we should stop wasting money and end the “gravy train.”

If Ford only manages to cut the City Hall’s expenses, that will bring some real money as opposed to Smitherman’s youth employment fund that would probably squander much more than the proposed $10,000,000.

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