Article content continued

The one big thing we know they are doing, the cut in the small business rate, is terrible policy, in as much as it will make worse the very problem the July proposals were supposed to address: the enormous gap between the small business rate and the top personal and corporate rates, and the incentives for incorporation and other tax planning to which it gives rise. As before, tax policy will continue to reward businesses for staying small, while punishing them for growing. Only now the penalty will be that much larger.

But it seems clear the harm to Liberal fortunes goes well beyond the particulars of the Finance proposals, or the tongue-tied plutocrat behind them. Rather, there is a hollowness at the heart of this government, a fundamental falseness, which the episode has exposed. The ritual, almost obsessive-compulsive invocations of the sorrows of the middle class were always made up, as made-up as the party’s pose as soak-the-rich populists, and with the same objective: to inoculate Trudeau, and latterly Morneau, against the charge of being entitled trust-fund millionaires, with no concept of the struggles of ordinary folk. Look at us, they seem to say, attacking our own!

Photo by THE CANADIAN PRESS/Nathan Denette

The small business tax changes were supposed to be a part of that campaign. Instead, they may well have blown it up. It wasn’t just that so many of those who were targeted, or felt themselves targeted, were not among the rich, or did not feel themselves to be so. It was the obvious contradiction between Trudeau/Morneau’s zeal to curb the use of tax shelters by others, less wealthy than themselves, and the equal zeal with which they have availed themselves of their own: not only the family trusts in which the fortunes of both are held, but the numbered corporations and other shelters to which the monied have access.