You should not be forced to own Enmax


The Financial Argument

There is a very important reason I should be able to choose.  It is not morally proper that I be forced to own Enmax, from a financial perspective.  Let me deconstruct that proposition.

Morally justified because there is a right and a wrong, from a financial perspective, because there is a risk and return analysis that can be applied to me and everyone in the City of Calgary from billionaires to single mom taxpayers.  So I appeal not to an ideology or belief, but rather a hard-headed analysis of risks and returns which can measure the rightness, or in this case the wrongness of the action, that can be applied to everyone affected.

As taxpayers we are forced to own Enmax.  Can that be true?  Or have I overstated the case with emotive and loaded language to emphasize the point.  Nay I say, I have not overstated, neither is the language more emotive than appropriate, or loaded with an inapt tone.  For we are indeed forced to own Enmax – because the capital used to acquire the ownership was taxed, and taxes are in all cases and in all circumstances ‘forced’ to be paid.  To suggest otherwise is to support an argument that runs something like this:  I choose to pay taxes because I prefer that choice to confiscation of my property, or I choose to pay taxes in Calgary because I choose to live in Calgary.  Support for these arguments is foolish and begs the question in such a way as to embarrass the proponent.

Now let me turn to the financial analysis:  The moral assessment from a financial perspective.  If Enmax loses money or needs cash, then my taxing authority will take money from me and you and give it to them.  We have all the risk and they are compulsory.  The benefits in the form of dividends or cash yield from ownership, are filtered and allocated by the City officials and committees responsible for spending the dividends (if, as and when they are declared and paid). I might or might not receive any of the benefits.  There is an asymmetrical risk and return profile in this ownership model; each of us has with certainty the risk (indirectly through our taxed support) and only some probability of receiving the returns (remotely and collaterally, we only benefit if the City chooses to spend the dividends on something we use or want).

And this risk/return analysis, as I have said, applies to billionaires and the poorer sort.  And curiously, the financial magnitude of the asymmetry, the unfairness quotient, is much greater for the poorer sort than the richer.  The New Testament, the rich man in the temple is much less affected than the proverbial poor widow with only one coin to put in the poor box.  To use the modern liberal jargon, the financial effect is regressive.

Other parts of the Enmax blog series:

What would life be like if Calgary sold Enmax?.

What would selling Enmax mean? Perspective 1

What would selling Enmax mean? Perspective 2

The canary was dead: to begin with

Image: Flickr CC 401(K)2012, Taxes

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