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Tag: liberal government

  • Polish president refuses to appoint 46 new judges

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    Polish President Karol Nawrocki refused on Wednesday to appoint 46 new judges, escalating his confrontation with the liberal government of Prime Minister Donald Tusk.

    In a post on X, he accused the judges nominated by the government of questioning Poland’s legal and constitutional order and of listening to “bad whisperings from the justice minister.”

    “If the appointment is the prerogative of the president, he can also refuse this appointment,” he wrote.

    Nawrocki also threatened not to appoint any new judges during his entire five-year term of office, the Polish news agency PAP reported.

    The dispute comes amid an attempt by Justice Minister Waldemar Żurek to reverse changes to the legal system introduced by Poland’s former right-wing government led by the nationalist Law and Justice (PiS) party.

    The PiS was persistently at odds with the European Union, which saw the independence of the judiciary as being under threat, until 2023 when Tusk’s liberal government took the helm in Poland.

    Although Nawrocki, a critic of the EU, is officially non-partisan and not a PiS member, he opposes the efforts to reverse the previous judicial sector reforms.

    Government spokesman Adam Szłapka said Nawrocki had overstepped his powers by rejecting the appointments.

    The former head of Poland’s Constitutional Tribunal, Andrzej Zoll, also described the president’s confirmation of judges as a formality. The head of state had no right to review the nominations, Zoll told the Onet news portal.

    Meanwhile Justice Minister Żurek demanded that the president justify his refusal to appoint new judges. Such a decision should be an administrative act that can be challenged in court, he said according to PAP.

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  • A wish list for Carney’s fall budget – MoneySense

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    But things changed in the second quarter as Canada’s economy weakened. This has put the spotlight on the weakness of Canadians’ income and savings in the face of change. It also provides an important opportunity for the November 4 federal budget to protect financial well-being in the months ahead.  

    The income gap reaches a new high

    The income gap, which is the difference in the share of disposable income between households in the top 40% and the bottom 40% of income distribution, is a common measure that makes the news. It was at a record high of 49% in the first quarter, with a slight reduction in Q2, and has been increasing every year since the pandemic. 

    Interest rates have had a lot to do with this. Fortunately, for the first time since 2022, household interest payments declined by almost 5% in Q1. Disposable income, therefore, increased for those indebted households. 

    Then the U.S. tariffs entered the economic picture. Lower-earning households tend to suffer the most during periods of uncertainty and this is holding true now. Statistics Canada reported declining average wages, mainly due to reduced hours of work in Q1. Those working in mining and manufacturing, professional and personal services were particularly affected. 

    For the lowest-income households, income grew at a faster-than-average pace (+5.6%) in the second quarter. But on closer inspection, this was actually due to an increase in government transfers including Employment Insurance (EI), social assistance, and retirement benefits.  

    Unfortunately, tax collections—the very source of these payments in the future— will decline too. The Parliamentary Budget Office projects a lower nominal GDP (which measures the size of the tax base), averaging $12.9 billion less annually from 2025 to 2029. This too is due to the impact of tariffs.

    The government plans to increase taxes for some as well as penalties and fines and resulting interest charges to bolster its revenues. However, a more positive, proactive approach is to make income- and wealth-building easier. That starts with getting back to the basics.

    Diversification of investments matters    

    Despite a good start in the first quarter of the year (Q1), Canadians’ financial well-being was affected by the impact of tariffs imposed in the second quarter (Q2). Consider the following investing trends:

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    1. Lower-income households tend to earn interest income. Net investment income dropped the most for low-income households. The decline in investment earnings (-35.3%) more than offset the decline in interest payments (-7.1%). Second-quarter outcomes were similar.
    2. Higher-earning households have more diversified portfolios, holding more equities. These produce more tax-efficient capital gains and dividend income. These households’ net worth grew as the value of their financial assets increased by 7.1% in Q1—close to three times the rate of inflation—and 9.6% in Q2. These families also had limited growth in mortgage debt (+1.9%).
    3. As a result, by the end of the second quarter, the wealthiest 20% of households had accumulated almost two-thirds (64.8%) of Canada’s total net worth, averaging $3.4 million per household. The bottom 40% of households accounted for 3.3% of total net worth, averaging $86,900.  
    4. As a special wealth-builder category, homeowners experienced lower borrowing costs and lower inflation and this resulted in more savings as debt reduction in Q1. Still, personal net worth declined for younger Canadians and those without investment portfolios, because real estate values also declined.

    Income Tax Guide for Canadians

    Deadlines, tax tips and more

    The wealthy will be OK, others need help

    What can we learn from this? The wealthiest households can continue to increase their net worth, even if incomes are interrupted or don’t keep up with inflation and debt servicing costs are threatened by unemployment, incapacity, or retirement. That’s because their investment earnings and capital appreciation make up for the income gap.  

    Where are the opportunities for lower-income households? There are two. In the face of the same issues, it is critical to be able to continue to save consistently. Second, it is important to earn more tax-efficient investment income.

    This is where government policy comes in. It seems to be an easy ask for some to pay more tax, but that can result in brain drain, reduced incentives work or innovate, and the flight of capital. The real opportunity in the next federal budget is to help all Canadians build both income and wealth, against the backdrop of economic uncertainty, and to do so with the help of knowledgeable professionals.

    Building income and capitala six-part plan

    Tax and financial literacy is elusive but critical to the prosperity of Canadians. Having the knowledge, skills, and confidence to make responsible financial decisions enables people to plan ahead and deal with increasingly complex systems that are a barrier to accessing income supplements through tax refunds, credits, and social benefits. 

    To that end, here’s my six-point wish list. Perhaps you’d like to add to it?

    1. Protection for interest earnings. Periods of high interest rates to combat inflation are particularly damaging to average households that earn interest income. If this monetary policy is necessary, protect those fragile savings from both inflation and taxes. Bring back the $1,000 investment income deduction, eliminated in 1987, to do so.  
    2. Deduction for professional help. Canadians need help with their tax and financial literacy. They won’t get that interacting with online help alone, no matter how good it is. Especially at a time the Canada Revenue Agency (CRA) is pushing for increased digitization, helping individuals better understand basic tax planning—what comes first, an RRSP, a TFSA or FHSA, for example—can bolster lifelong wealth-building habits and help to diversify their investments. To remove barriers to professional help, make income tax preparation and financial planning costs tax-deductible.
    3. Waive CRA penalties and interest from auto-filing. Even though the federal government is touting automatic tax filing for 5.5 million of the lowest-income Canadians by 2028, in reality, navigating both tax and digital complexity underlying this initiative may be unattainable for most targeted filers. Imagine the repayment nightmare for years to come (remember CERB?) if these tax returns are incorrect. The CRA should be empowered to permanently waive interest or penalties resulting from honest errors in automatic tax filing processes. 
    4. Help young people start saving. Young workers are most susceptible to job loss but have the most to gain from increased compounding time in their investments. By enabling matching grants for start-up savings for the first five years after post-secondary education, similar to the grants available for registered education savings plan (RESP) and registered disability savings plan (RDSP) savings, sound saving habits could be encouraged with a New Graduate Savings Plan.   
    5. Recognize community service as a tax deduction. Younger Canadians aged 15 to 24 are most likely to volunteer, while those over age 65 volunteer the most hours. Keeping track of volunteer hours is not much more onerous than keeping track of dollars donated to charity. The resulting tax savings could help with community wealth creation. The Liberals had proposed a Health Care Workers Hero Tax Credit in their party platform. This should be extended to those who volunteer to help others with tax preparation and financial planning, by expanding the charitable donation credit. 
    6. Change retirement savings options. Most people know that the Canada Pension Plan (CPP) alone will not fund their retirement, even with the higher premiums workers and their employers are now paying. Rising CPP premiums squeeze out cash flows needed to fund a tax-free savings account (TFSA), which ensures a tax-free retirement. Required matching premiums also make it difficult for employers to give raises or increase staffing. One way to improve cash flow for more private savings is to increase take-home pay. Governments should encourage TFSA savings by making contributions tax deductible for both employees and employers who contribute to their employees’ accounts.

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    Read more about tax planning:



    About Evelyn Jacks, RWM, MFA, MFA-P, FDFS


    About Evelyn Jacks, RWM, MFA, MFA-P, FDFS

    Evelyn Jacks is President of Knowledge Bureau, a world-class financial education institute where readers can take micro-credentials in Financial Literacy, the Fundamentals of Income Tax Preparation, and earn career-enhancing Specialized Credentials, all online.

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    Evelyn Jacks, RWM, MFA, MFA-P, FDFS

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  • What the DeSantis and Newsom Debate Really Revealed

    What the DeSantis and Newsom Debate Really Revealed

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    The best way to understand last week’s unusual debate between Governors Gavin Newsom of California and Ron DeSantis of Florida is to think of them less as representatives of different political parties than as ambassadors from different countries.

    Thursday night’s debate on Fox News probably won’t much change the arc of either man’s career. DeSantis is still losing altitude in the 2024 GOP presidential race, and Newsom still faces years of auditioning before Democratic leaders and voters for a possible 2028 presidential-nomination run.

    What the debate did reveal was how wide a chasm has opened between red and blue states. The governors spent the session wrangling over the relative merits of two utterly divergent models for organizing government and society. It was something like watching an argument over whether the liberal government in France or the conservative government in England produces better outcomes for its people.

    “The way the debate will be heard is the nationals of each country cheering their guy on,” Michael Podhorzer, a progressive political strategist and a former political director for the AFL-CIO, told me.

    The sharp disagreements between the governors pointed toward a future of widening separation between red and blue blocs whose differences are growing so profound that Podhorzer has argued the sections should be understood as fundamentally different nations.

    As Podhorzer and other analysts have noted, this accelerating separation marks a fundamental reversal from the generally centralizing trends in American life through the late 20th century. Beginning with the New Deal investments under Franklin D. Roosevelt (such as agricultural price supports, the Tennessee Valley Authority, and Social Security), and continuing with massive expenditures on defense, infrastructure, and the social safety net after World War II (including Medicare, Medicaid, and federal aid for K–12 and higher education), federal spending for decades tended to narrow the income gaps between the southern states at the core of red America and the rest of the country.

    After World War II, in a dynamic that legal scholars call the rights revolution, the federal government nationalized more civil rights and liberties and limited the ability of states to constrain those rights. Through Supreme Court and congressional actions that unfolded over more than half a century, Washington struck down state-sponsored segregation and racial barriers to voting across the South, and invalidated a procession of state restrictions on abortion, contraception, interracial marriage, and same-sex relationships, among other things.

    But both big unifying trends reshaping the economy and the rules of social life have stalled and are moving in the opposite direction. Podhorzer has calculated that the convergence in per capita income between the South and other regions plateaued in 1980 and then started widening again around 2008. And, as I’ve written, the axis of Republican-controlled state governments, the GOP-appointed majority on the Supreme Court, and Republican senators wielding the filibuster are actively reversing the rights revolution that raised the floor of personal freedoms guaranteed in all 50 states.

    On issues including voting, LGBTQ rights, classroom censorship, book bans, public protest, and, most prominent, access to abortion, red states are imposing restrictions that are universally rejected in blue states. As Newsom argued in an interview with me a few hours before he went onstage, “This assault on our rights and the weaponization of grievance” is designed to “bring us back to … the pre-1960s world” in which people’s rights depended on their zip code. Under DeSantis, Florida has been a leader in that process, creating policies, such as limits on classroom discussion of sexual orientation and gender identity, widely emulated across other red states.

    Thursday night’s debate revolved around the differences between Florida and California, though the Fox moderator Sean Hannity hardly presented an accurate picture of the comparison. Both states have their successes and failures. But Hannity focused his questions entirely on measures that favor Florida (such as unemployment rate, violent-crime rate, and homelessness numbers) while ignoring all the contrasts that favor California (which has a much higher median income, far fewer residents without health insurance, and, according to the CDC, much lower rates of teen birth, infant mortality, and death from firearms, as well as a longer life expectancy). Hannity essentially joined in a tag team with DeSantis to frame the debate in terms familiar to his Fox audience that blue states are a chaotic hellhole of crime and “woke” liberalism; when Newsom pushed back against that characterization, or challenged DeSantis’s approach, Hannity often cut him off or steered the conversation in a different direction.

    The narrow focus on California and Florida made sense in a debate between their two governors. But those comparisons can obscure the bigger story, which is the expanding divergence between all the states in the red and blue sections.

    Podhorzer has documented that gap in an array of revealing measures. He divides the nation between states in which Republicans or Democrats usually hold unified control of the governorship and state legislature, and those in which control of state government is usually divided or frequently changes hands. That classification system yields 27 red states, 17 blue states (plus the District of Columbia), and six purple states. By these definitions, the red states account for just under half the population and the blue states just below two-fifths, while the blue states contribute slightly more of the nation’s GDP.

    Podhorzer’s data show that on many key measures, blue states as a group are producing far better outcomes than the red states.

    In new results provided exclusively to The Atlantic, Podhorzer calculates that the economic output per capita and the median family income are both now 27 percent higher in the blue section than in the red, while the share of children in poverty is 27 percent higher in the red states. The share of people without health insurance is more than 80 percent higher in the red states than in the blue, as are the rates of teen pregnancy and maternal death in childbirth. The homicide rate across the red states is more than one-third higher than in the blue, and the rate of death from firearms is nearly double in the red. Average life expectancy at birth is now about two and a half years higher in the blue states. On most of these measures, the purple states fall between red and blue.

    (Podhorzer also groups the states by their voting behavior in federal elections, which results in 24 red-leaning states, 18 blue ones, and eight purple states. But the comparisons between the two big sections don’t change much under that definition.)

    On most of these measures, Podhorzer calculates, the gap between the red and blue states has widened over the past 15 years. He attributes the expansion mostly to the kind of policy differences that DeSantis and Newsom debated. The difference in health outcomes, for instance, is rooted in disparities such as the continuing refusal of 10 red states, including Florida, to expand Medicaid eligibility under the Affordable Care Act (which every blue state has done). As other economic analysts have noted, with their higher concentrations of college graduates, blue states—and the large blue metropolitan areas of red states—are benefiting the most from the nation’s transition into an information-age economy.

    As DeSantis and Hannity did in the debate, defenders of the red-state approach point to other measures. Housing costs are typically much lower in red states than in blue, as are taxes. Those are probably the central reasons many of the blue states, despite their stronger results on many important yardsticks, are stagnant or shrinking in population, while several of the red states, especially those across the Sun Belt, have been adding middle-income families. Lower housing costs are also one reason homelessness is less of a problem in red states than in blue metros, especially along the West Coast.

    But the relative superiority of either model is probably less important to the nation’s future than the widening separation, and growing antagonism, between them that was displayed so vividly in the debate.

    Most experts I spoke with agree that there is now no single difference between the red and blue sections as great as the gulf during most of the 20th century between the states with and without Jim Crow racial segregation, much less the 19th-century distance between the slave and free states.

    But the number of issues dividing the states is reaching a historic peak, many of those same experts agree. Although civil rights and racial equity have made up the most important dividing line between the states for most of U.S. history, “the way in which these issues line up today—on everything from abortion to library books to the question of how much power states ought to have over their local governments … I think there’s not been since the founding such a far-reaching debate,” Donald Kettl, a former dean of the University of Maryland’s School of Public Policy, told me.

    To Kettl, the new wave of restrictive social legislation spreading across red states challenges the traditional idea that local variation benefits the country by allowing states to function as the fabled “laboratories of democracy.” “It strikes me as being incredibly dangerous,” Kettl said. “The good old arguments about the laboratories of democracy is that individual states would try different ideas, find out what works, and throw out the ones that didn’t work. We are not talking about that at all. We are talking about an effort to push a particular agenda and to push it as far as possible.”

    David Cole, the ACLU’s national legal director, likewise sees the erosion of a national floor of civil rights and liberties as the most ominous element of the widening red-blue separation. “We are supposed to be one nation, committed to a common set of fundamental rights,” Cole told me in an email. “But we have increasingly become two nations, with substantial rights protections for some, and robust repression for others. Federalism was designed to allow for some play in the joints, some variations among states—but not on the fundamental constitutional rights to which we are all entitled as human beings and U.S. residents.”

    It’s not clear that in the near term anything will close the space between red and blue states. Neither party has many realistic chances to win power in states that now prefer the other side. And particularly in red states, the dominance of the conservative media ecosystem makes it difficult for Democrats even to present their arguments, as the debate demonstrated.

    In the interview a few hours before he went onstage, Newsom told me that the principal reason he accepted the debate was not so much to rebut DeSantis as to reach Fox viewers. “I want to make the case in their filter bubble,” he told me. “We’ve got to get into their platforms.” Though the forum allowed Newsom to assert some positive facts about President Joe Biden’s record rarely heard on the network, any progress in reaching Fox viewers was likely blunted by Hannity’s framing of every issue as proof of the superiority of red over blue. After the debate, Newsom’s aides said they believed he had achieved his mission of evangelizing to Fox’s audience. But in the end, the evening may have validated Barack Obama’s lament during his presidency that it was virtually impossible for Democrats to communicate with red-state voters except through the negative filter that conservative media build around them.

    Podhorzer is among those skeptical that anything will reverse this process of separation in the foreseeable future. He views the late-20th-century trend toward convergence as the anomaly; “the default position” through most of American history has been for the states we now consider the red bloc to pursue very different visions of moral order, economic progress, and the role of government than those we now label as blue. To Podhorzer, the disagreements on display at the DeSantis-Newsom debate were just the modern manifestation of the deep divisions between the free and slave states, or the Union and the Confederacy.

    In the 2024 presidential race, Biden and the leading Republican candidates have each endorsed new national laws that would reverse our separation by imposing the dominant laws in one section on the other. Biden and other Democrats are backing federal bills to restore a national floor of abortion, LGBTQ, and voting rights in every state; Republicans in turn want to impose red-state restrictions on all those issues in blue states.

    Podhorzer believes that the differences between the states have hardened to the point where setting common national rules on these issues in either direction has become extremely risky. “Any compromise on any of these big issues,” he told me, “means half the country will see a loss in some aspect of what they like about the way they live.” From his perspective, courting that backlash might be worth the effort to restore core civil rights, such as access to abortion, nationally. But he warns that no one should underestimate the potential for fierce red-state resistance to such an effort, extending even to violence.

    It won’t be easy for either side to pass legislation nationalizing the social- and civil-liberties regime in their section; at the least, it would require them to not only hold unified control of the White House and Congress but also end the Senate filibuster, which remains an uncertain proposition. The more likely trajectory is for red and blue states to continue careening away from each other along the pathways that Newsom and DeSantis so passionately defended last week. “Without some major disruption, this cycle” of separation “hasn’t played itself out fully,” Podhorzer told me, in a view echoed by the other experts I spoke with. “There are hurricane-force winds in that direction.” Thursday’s gusty debate between these two ambitious governors only hinted at how hard those gales may blow in the years ahead.

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    Ronald Brownstein

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