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Taxing the wealthy Some might be tempted to see levies on bank bonuses and the rich as "sin taxes." As in, it was a sin to be a banker in the financial crisis, and now, amid raging unemployment and rising poverty, it's a sin to be wealthy. It's not, of course, but it is a sin not to pay your fair share.

One of the controversial bits of President Barack Obama's tax proposal - it's a plan to slash the deficit by a further $3-trillion (U.S.) over 10 years - is a tax hike that would raise $1.5-trillion and would be largely aimed at the wealthy.

It's dubbed the "Buffett Rule," in honour of the Berkshire Hathaway chief who called on the administration to force rich people, like him, to pay more in tax.

"This is not class warfare, it's math," Mr. Obama said, a comment aimed at Republicans who have slammed his proposals. Also in the plan are changes to Medicare and Medicaid, and more than $1-trillion in savings as the fighting in Afghanistan and Iraq subsides.

"The deficit reduction plan comes a week after - and is intended in Obama's word to help 'pay for' - the Administration's $450-billion jobs package," said Peter Buchanan of CIBC World Markets. "Though passage of the plan in its current form is improbable, it could conceivably serve as the point of departure for talks aimed at achieving the longer-term fiscal plan that eluded debt negotiators in early August."

The President pledged to veto any plan that cuts Medicare, for example, but doesn't force the rich to pay more.

Other countries, such as France and Spain, have also moved to increase the tax take from the wealthy in an effort to raise revenues and slash their deficits.

There's no question such a move plays well among the people. But is it really all politics aimed at showing the masses that the rich will be treated no differently? No. Alone, it's not going to make a huge dent in the deficit, but it is a fair measure.

Bankers were rightly slapped in an effort to help pay for the bailouts that kept the financial system afloat during the crisis, and to ensure risky behaviour stopped. For the wealthy, there's no question that they shouldn't pay their fair share because of low ceilings on tax rates for dividend earnings and capital gains, areas where the poor can't take part for obvious reasons.

Mark Cuban, for one, appears to agree with Mr. Buffett, saying on his blog today that getting rich and paying taxes is the most patriotic thing one can do.

"Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a cheque you have to write," the owner of the NBA's Dallas Mavericks said.

"Your second thought will be 'what a great problem to have,' and your third should be a recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you."

It's not a sin to be rich, but it is a sin not to pay your fair share. Mr. Buffett has said he pays a lower tax than his secretary, and is paying just slightly more than 17 per cent of his taxable income, far below that of others. He stirred this pot, and I take him at his word. Mr. Obama said today that was wrong, and that his secretary shouldn't pay more.

Seven 'critical' days Greece's Prime Minister George Papandreou sees these as seven "critical" days for Athens, so much so that he called off a trip to the United States. I'm not sure how he'd describe the last 18 months, or what he hopes to accomplish in seven days, but there's no question that Greece, and thus the entire euro zone, is near a crisis point.

Greece's Finance Minister Evangelos Venizelos pledged again today that his country will post a primary surplus next year, comments that came just before talks with the European Commission, International Monetary Fund and European Central Bank, the so-called "troika," over more cutbacks.

The review ended with a statement from the finance ministry calling the talks "productive and substantive," saying the meeting will pick up again tomorrow, though news reports from Athens quoted finance officials as saying the parties were "close to an agreement.

As The Globe and Mail's Nicolas Johnson reports today, the 17-member euro zone is heading into its 11th hour in a particularly weakened state. Euro zone finance ministers failed to come up with anything new at a weekend meeting in Poland, while German leader Angela Merkel's power was eroded again with another loss in a regional election.

Greece is desperate for another €8-billion in bailout money, and today's review could help out in that regard, though the European finance ministers punted that decision to October. No matter what happens, it's questionable whether Athens can convince the markets that it's not going to default. Remember, at first it said it didn't need a bailout either.

"The lack of any headway at the Ecofin weekend meeting in Poland, along with a swift dismissal of advice from U.S. Treasury Secretary Timothy Geithner, merely serves to highlight the simmering tensions among European politicians as they try to balance the competing demands of political unpopularity at home against the need to reassure financial markets," said CMC Markets analyst Michael Hewson.

"The decision by Greek PM Papandreou to delay his trip to the U.S. this week highlights the concerns surrounding Greece and further austerity measures demanded by the troika, who return to Athens today and are due to meet Greek cabinet ministers to assess whether the new measures agreed will be enough to warrant the next tranche of bailout money."

Maybe God could recreate Greece in seven "critical" days, but Mr. Papandreou can't. The euro zone still can't get its act together, which is something Athens needs to avert a bankruptcy, and which is beyond the Greek Prime Minister's control.

"First, the agencies charged with overseeing Greece's progress toward fiscal reform include the EC, ECB and IMF, and they have concluded that Greece is underachieving on implementing fiscal reforms with talks resuming today," said Derek Holt and Karen Cordes Woods of Scotia Capital.

"That led to expedited Greek efforts to work toward achieving additional austerity through Sunday meetings, but we're back to the same pressure scenarios that have always marked how the crisis is being managed. Greece is being warned not to count upon the next €8-billion payment which has been delayed until mid-October while its progress is being evaluated, which is just about the time that Greece says it runs out of money."

While many observers expect a default, others believe its partners in the euro zone won't allow Greece to collapse.

"How will this Greek debt crisis be resolved?" said Grant Amyot, a political studies professor at Queen's University. "It's either by a default or by Greece's European partners coming to its rescue once again. The euro is a not just matter of economic calculation, it's a matter of political commitment by the member states of the European Union. I don't think they will let Greece go under."

Markets sink You just knew that the warm and fuzzy feeling left last week by Angela Merkel and Nicolas Sarkozy wasn't going to last long.

The German and French leaders, under pressure as the euro zone's debt crisis spirals out of control, said some nice things about supporting Greece, which buoyed markets. But those were words of support, not actual support, and investors realized that today after a key weekend meeting of euro finance ministers ended with nothing concrete.

Global markets sank today in response, with the Dow Jones industrial average and Toronto's benchmark S&P/TSX composite following Asian and European markets lower as investors believe Greece is headed toward a default that will ripple across the global economy, the banking system in particular.

"It's certainly been a tough start to the new trading week with markets selling off hard across the board, amidst these resurgent fears that the Greek default could now be imminent," said sales trader Ben Critchley of IG Index in London.

"With €769-million of interest due to be paid by Athens tomorrow on bonds already issued – plus that conference call between Greece and the Troika still to come tonight – there's no surprise at all that risk appetite has evaporated, and it's not just the financial stocks that are suffering."

Yes, and oui Air Canada is promising to improve its bilingual services after being faulted in an audit by the Office of the Commissioner of Official Languages.

The watchdog said today it launched its first full audit of Canada's biggest carrier to evaluate services in both official languages on flights, at airports and in call centres. It made 12 recommendations to the airline.

"This audit highlights some positive observations and reveals some situations that require improvement to ensure that Air Canada complies fully with the Official Languages Act," commissioner Graham Fraser said in a statement. "The corrective measures we propose can be applied fairly easily – in fact, Air Canada has integrated most of them into its new action plan and is committed to implementing them."

The agency said Air Canada will set out an "accountability framework" for official languages by the end of this year, develop a three-year "action plan" and raise awareness among its staff.

A lifeline for train plant? The Derby train factory run by Canada's Bombardier Inc. , Europe's largest, has been thrown a lifeline and may survive, if only just, The Globe and Mail's Eric Reguly reports today from London.

Britain's Department of Transportation has been working overtime to speed up the award of contracts that might keep Derby ticking over.

Two look promising. The first would see Bombardier build 57 electric-powered carriages for the passenger fleets used on the CrossCountry franchise, which extends from Scotland to England's southwest. The contract would be worth perhaps £120-million and Bombardier is already involved in the feasibility study.

Netflix: 'I messed up' The chief of Netflix Inc. says he "messed up" with a recent price hike that prompted investors to walk out of the movie.

Reed Hastings is going to make up for it by splitting the businesses, dividing its DVD mail service from its movie-streaming unit. But they won't be separate publicly traded companies. Rather, the DVD unit will become a subsidiary.

Netflix stock plunged last week after the company slashed its outlook for subscribers, which followed a price change and boosted monthly costs markedly.

"It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes," Mr. Hastings said in a blog on the Netflix website. "That was certainly not our intent, and I offer my sincere apology."

He said the company came to realize that streaming and DVD by mail are becoming "two quite different businesses, with very different costs structures."

Another big company splits Tyco International Ltd. is following in the footsteps of other major companies with a plan to make the sum of its parts worth more than its whole.

The security products and services company said today it is splitting into three separate, public traded concerns.

"All three companies will have industry-leading positions in large and fragmented industries and enhanced capabilities to serve their distinct customers," chief executive officer Ed Breen said in a statement.

"Importantly, the new standalone companies will have greater flexibility to pursue their own focused strategies for growth -- both organic and through acquisitions -- than they would under Tyco's current corporate structure. This will allow all three companies to create significant value for shareholders."

In Economy Lab A new paper by Philip Cross, Statistics Canada's chief economic analyst, has found that while trade flows have bounced back in other countries, Canada is an exception. The Globe and Mail's Tavia Grant reports.

In International Business UBS kicked off an internal investigation into the catastrophic failure of its risk systems after rogue equity trades cost the Swiss bank $2.3-billion (U.S.), raising pressure on top management, Catherine Bosley of Reuters reports from Zurich.

In Globe Careers Top Employers: As chief executive officer of Capital One Canada, Rob Livingston understands how important it is to recruit talented people early in their careers – and to keep them around. Nick Rockel reports.

In Personal Finance At what age and how should you start teaching your child about the value of money, asks Shelley White.

Is your kid money smart?

From today's Report on Business

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
AC-T
Air Canada
-0.15%19.61
CM-N
Canadian Imperial Bank of Commerce
+1.3%50.72
CM-T
Canadian Imperial Bank of Commerce
+1.13%68.67
NFLX-Q
Netflix Inc
-1.01%607.33

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