Liberals Winning at Class Warfare

"If class warfare is being waged in America, my class is clearly winning" --Warren Buffett

His net worth is greater than most countries. Global capitalism has obviously served Warren Buffett well. But the irascible billionaire has never been shy about castigating his fellow corporate elite and pointing out embarrassing facts in his annual shareholders' letters.

His latest blast highlighted, among other things, the record-low levels of income tax paid by U.S. corporations.  In 2003, corporate income taxes accounted for just 7.4 percent of U.S. federal tax receipts, compared to a post-World War Two peak of 34 percent.  And that was before the latest round of President Bush's tax breaks.

In the polarized politics of our province, the B.C. Legislature has long been seen as place where the representatives of the workers do battle with the representatives of the bosses. Voters may yearn for an administration that governs for everyone, but they keep electing governments that love to fight.

Usually it's the NDP that is accused of class warfare.  However, it's been the province's right-wing coalitions -- Social Credit and now provincial Liberals -- who have been the most successful implementers of class-based policies. 

Never mind the common good

Let's not even talk about the Liberal government's relentless "poor bashing" that masquerades as welfare assistance. In area after area of public policy, this government's actions seem based not so much on what is best for the province as a whole but on what will be advantageous to corporate supporters.

Take, for example, employment standards. Changes in B.C.'s Labour Code were no surprise after the 2001 election; every new government tinkers with the legal framework governing union activity.  And maybe it was to be expected that pay equity legislation, introduced by the NDP, would be quickly scrapped -- even though similar laws are standard in most provinces.
 
But who except corporate class-warriors would have expected a $2 reduction in the minimum wage for new entrants to the workforce? Where in the government's 2001 election platform did it propose eliminating state regulation of child labour? When did voters decide that the Employment Standards Act, which protects non-unionized workers, would be gutted in the name of "flexibility"?

Government's treatment of its own workers shows the same sort of class-based policies.  The highest income earners in the health care system, physicians, were awarded fee increases averaging $50,000 apiece. People who cleaned the operating rooms and washed the surgeons' scrubs found their jobs contracted out. The new workers earned one-half to two-thirds what the old ones did.

Tote up the tax breaks

The salaries of deputy ministers were bumped up by 25 to 32 percent, putting the new pay levels at $134,300 to $203,500 a year, plus performance bonuses of up to 10 percent. Heads of crown corporations and senior managers in the health and education systems saw similar increases. But the jobs of nearly one-third of all direct government workers were simply eliminated.

However, like the Bush administration in the U.S., the B.C. government's class-based ideology is most clearly revealed by its tax policies. Personal income taxes were cut for everyone in 2001 -- but far more for high-income earners than those at the bottom of the heap. And any small gains by low income earners were quickly wiped out by increased medical premiums, sales taxes, liquor and cigarette prices, and a host of increased fees for government services--tuition, drivers licenses, campground fees, etc.
 
Most revealingly, tax bills paid by corporations plummeted. In 2000, corporations paid $1.5 billion in provincial income and capital taxes; that was only 6.2 percent of total government tax receipts -- already less than the record low U.S. federal take highlighted by Mr. Buffett. Three years later, in 2003, the provincial government had slashed corporate taxes by half.  Corporations paid just $771 million in income taxes; that's a miniscule 2.8 percent of government tax revenues.

Maybe Warren Buffett should relocate to British Columbia.  The government here seems even more inclined than the Bush administration to help billionaires win the class war.

Paul Ramsey is a former NDP MLA and Cabinet Minister.  He now teaches at CNC and is a Visiting Professor in the Political Science Program at UNBC.