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Estonia’s solution to Canada’s stagnating economic growth

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From the Fraser Institute

By Callum MacLeod and Jake Fuss

The only taxes corporations face are on profits they distribute to shareholders. This allows the profits of Estonian firms to be reinvested tax-free permitting higher returns for entrepreneurs.

new study found that the current decline in living standards is one of the worst in Canada’s recent history. While the economy has grown, it hasn’t kept pace with Canada’s surging population, which means gross domestic product (GDP) per person is on a downward trajectory. Carolyn Rogers, senior deputy governor of the Bank of Canada, points to Canada’s productivity crisis as one of the primary reasons for this stagnation.

Productivity is a key economic indicator that measures how much output workers produce per hour of work. Rising productivity is associated with higher wages and greater standards of living, but growth in Canadian productivity has been sluggish: from 2002 to 2022 American productivity grew 160 per cent faster than Canadian productivity.

While Canada’s productivity issues are multifaceted, Rogers pointed to several sources of the problem in a recent speech. Primarily, she highlighted strong business investment as an imperative to productivity growth, and an area in which Canada has continually fallen short. There is no silver bullet to revive faltering investment, but tax reform would be a good start. Taxes can have a significant effect on business incentives and investment, but Canada’s tax system has largely stood in the way of economic progress.

With recent hikes in the capital gains tax rate and sky-high compliance costs, Canada’s taxes continue to hinder its growth. Canada’s primary competitor is the United States, which has considerably lower tax rates. Canada’s rates on personal income and businesses are similarly uncompetitive when compared to other advanced economies around the globe. Uncompetitive taxes in Canada prompt investment, businesses, and workers to relocate to jurisdictions with lower taxes.

The country of Estonia offers one of the best models for tax reform. The small Baltic state has a unique tax system that puts it at the top of the Tax Foundation’s tax competitiveness index. Estonia has lower effective tax rates than Canada—so it doesn’t discourage work the way Canada does—but more interestingly, its business tax model doesn’t punish investment the way Canada’s does.

Their business tax system is a distributed profits tax system, meaning that the only taxes corporations face are on profits they distribute to shareholders. This allows the profits of Estonian firms to be reinvested tax-free permitting higher returns for entrepreneurs.

The demand for investment is especially strong for capital-intensive companies such as information, communications, and technology (ICT) enterprises, which are some of the most productive in today’s economy. A Bank of Canada report highlighted the lack of ICT investment as a major contributor to Canada’s sluggish growth in the 21st century.

While investment is important, another ingredient to economic growth is entrepreneurship. Estonia’s tax system ensures entrepreneurs are rewarded for success and the result is that  Estonians start significantly more businesses than Canadians. In 2023, for every 1,000 people, Estonia had 17.8 business startups, while Canada had only 4.9. This trend is even worse for ICT companies, Estonians start 45 times more ICT businesses than Canadians on a per capita basis.

The Global Entrepreneurship Monitor’s (GEM) 2023/24 report on entrepreneurship confirms that a large part of this difference comes from government policy and taxation. Canada ranked below Estonia on all 13 metrics of the Entrepreneurial Framework. Notably, Estonia scored above Canada when taxes, bureaucracy, burdens and regulation were measured.

While there’s no easy solution to Canada’s productivity crisis, a better tax regime wouldn’t penalize investment and entrepreneurship as much as our current system does. This would allow Canadians to be more productive, ultimately improving living standards. Estonia’s business tax system is a good example of how to promote economic growth. Examples of successful tax structures, such as Estonia’s, should prompt a conversation about how Canadian governments could improve economic outcomes for citizens.

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Companies Are Getting Back To Business And Backing Away From DEI

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From the Daily Caller News Foundation

By Devon Westhill

 

Classic American companies like John DeereHarley Davidson and Tractor Supply Co. are finally reevaluating Diversity, Equity, and Inclusion (DEI) initiatives. They are realizing that their consumers, many from rural, midwestern and working-class communities, don’t care for the DEI practices of corporate elites. They just want good service, reliable tractors and badass motorcycles.

The about-face is especially timely as the Supreme Court’s 2023 affirmative action decision prohibiting race-based college admissions has increased scrutiny of private sector DEI practices. This new legal climate, combined with the discovery of problematic DEI programs at major American companies, means that corporations are at long last feeling significant pressure to prioritize excellence and efficiency over faddish diversity metrics.

Companies operating in the free market have one purpose: to provide quality goods and services to consumers in order to make a profit. For too long, much of corporate America has focused on virtue signaling to appease the left’s cultural mandates. Now, business incentives are forcing a return to the bottom line.

The change began in June when conservative commentator Robby Starbuck took to social media to expose companies masquerading as all-American brands with traditional values. He first exposed Tractor Supply’s DEI practices and announced that he would be investigating a list of other companies considered exemplars of Americana.

In response, Tractor Supply customers began boycotting the company, resulting in an 8% decrease in its stock price (a $2.8 billion market value loss) over five days. This led Tractor Supply to announce later that month the termination of its DEI programming. The company promised to stop submitting data for the Human Rights Campaign’s Corporate Equality Index and withdrew sponsorship of LGBTQ+ pride events and voting campaigns, calling them “nonbusiness activities.”

Starbuck’s later exposure of John Deere’s DEI policies also caused the company to issue a statement announcing major cutbacks to their DEI programs. Harley DavidsonJack Daniels and Lowe’s followed suit, preemptively terminating their DEI programs and standards.

All of these companies should be commended for abandoning excessive DEI and getting back to business.

Now, instead of requiring costly, time-intensive programs to prove their liberal bona fides, they can focus on delivering results for their customers. Free from worry about optics and bureaucratic compliance, they can hire the most qualified employees and let them rise to the top.

But these decisions are not without their naysayers. DEI proponents have labeled these moves as bullying from far-right extremists and claim that terminating these policies will encourage gender and race discrimination in the workplace.

This hysteria is unwarranted and relies on the absurd claim that without DEI standards, there can be no equality, inclusion or respect in the workplace. Of course, it is crucial that businesses cultivate a culture of respect and dignity. Employees should be educated on their protections and duties regarding civil rights and basic civility in the workplace. All of the companies reversing on DEI have remained committed to fostering respectful, safe cultures for their employees.

In fact, too much corporate DEI can wreak havoc on a company’s morale. In many cases, it can result in scapegoating certain groups of people for grievous wrongs none of them had a hand in committing. It can also lead to damaging intellectual conformity and groupthink. DEI hiring quotas, in particular, can lead to serious legal risk. All of this results in the complete opposite of DEI’s purported goals. Instead, it increases workplace disunity and harms true diversity.

Ultimately, the DEI policies at these classic American companies have proven to only burden corporations, frustrate employees and confuse customers. Companies should prioritize producing better quality products, lowering prices, and offering attractive wages and benefits for all employees, instead of pouring time and money into ineffective policies that do not represent the American values of their customer base. So long, discrimination disguised as diversity.

Devon Westhill is the president and general counsel for the Center for Equal Opportunity.

 

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Pornhub hit with lawsuit over videos victimizing 12-year-old who was drugged and raped

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From LifeSiteNews

By Doug Mainwaring

There is a backlog of about five months between when a user reports a video and an authorized team leader reviews it to determine whether to remove it, allowing the video to remain available on the Pornhub site for download and redistribution for nearly a half year after the complaint was first reviewed.

A man who as a 12-year-old boy was drugged and raped in nearly two dozen videos that were uploaded to Pornhub by his victimizer for monetary gain is suing the massive online pornography leviathan for breaking child sex trafficking and RICO laws.

According to the world’s leading anti-porn activist Laila Mickelwait, “His jury trial could put Pornhub out of business.”

In recent years, scandal-plagued Pornhub — and its shadowy parent company, Mindgeek, which recently changed its name to “Aylo” to escape its “scandal-ridden smut empire” reputation — has come under fire for posting child sexual exploitation material, sexual trafficking, and assault videos and then ignoring victim’s pleas to remove the videos from their website.

The predator who admitted that in the summer of 2018 he used, induced, and enticed the young boy and another minor to engage in sexually explicit conduct for the purpose of producing video pornography is now behind bars serving a 40-year sentence for “sexual exploitation of a child, advertising child pornography, and distribution of child pornography.”

However, Mindgeek and Pornhub have yet to face their young accuser for enabling the public distribution of the videos.

According to the lawsuit, videos of the boy’s molestation “astonishingly” generated nearly 200,000 video views, and as a result of Mindgeek’s actions and/or inactions, the now-young man “has suffered incomprehensible past and present physical, emotional, and mental trauma.”

“MindGeek knows that there is a demand for CSAM (Child Sexual Abuse Material) on their sites and they cater to this demand,” according to the 78-page legal complaint filed in a U.S. District Court in Alabama where the sexual exploitation of the minors took place.

Hundreds of thousands of ‘teen’ sex video titles available

The case asserts that Mindgeek has historically sought to maximize profit, aggressively promoting child porn via titles and video descriptions that would more easily direct Google users to the exploitative videos featured on Pornhub.

“One such tag MindGeek used to classify pornographic content on its websites was ‘Teen.’ The suggested terms include ‘abused teen,’ ‘crying teen,’ ‘extra small petite teen,’ and ‘Middle School Girls,’” the legal complaint explains.

“In 2018, the word ‘teen’ was the seventh most searched term on all of Pornhub,” the complaint notes. “Other eponymous search terms, including ‘rape,’ ‘preteen,’ ‘pedophilia,’ ‘underage rape,’ and ‘extra small teens’ would call up videos depicting the same.”

The proliferation of these keywords and tags on the website ensures that when outside users Google these terms, Pornhub, or another MindGeek website, will be among the top results. This draws new users, even those searching the internet for illegal content, to MindGeek websites.

MindGeek’s aggressive data collection and traffic analytics mean that MindGeek knows exactly what users are looking for (and what exists) on their sites and that this includes sex trafficking material and CSAM.

For example, as The New York Times recently reported, as of December 4, 2020, a search for “girl under18” led to more than 100,000 videos. And a search for “14yo” led to more than 100,000 videos and “13yo” led to approximately 155,000 videos.  MindGeek sought to capitalize on such traffic by allowing illegal search terms, creating suggested search terms, keywords, and tags

Purposefully failing to censor criminal child/teen porn videos

The case notes that while Mindgeek-Pornhub does have online moderators who review complaints about videos on the site, the 10 moderators “have no prior training, medical or otherwise, to identify whether someone depicted in a pornographic video is a child” and are, by design, set up to fail at their task.

The ten individuals on the “moderation/formatting team” were each tasked by MindGeek to review approximately 800-900 pornographic videos per 8-hour shift, or about 100 videos per hour. According to Pornhub, there are approximately 18,000 videos uploaded daily, with an average length of approximately 11 minutes per video. Hence, each moderator is tasked with reviewing approximately 1,100 minutes of video each hour. This is an impossible task, and MindGeek knows that.

To compensate for and accomplish the impossible task, moderators/formatters fast-forward and skip through videos, often with the sound turned down. The problem is not resources: MindGeek’s annual revenues are at least $500 million, and it could certainly hire and train more true moderators.

One of the most disturbing assertions in the case is that “When minor victims of sex trafficking and their representatives have contacted MindGeek to remove videos of them from its websites, MindGeek has refused to do so.”

In some cases, MindGeek moderators/formatters even looked at video comments, deleted those noting a video constituted child pornography or otherwise should be removed from the system, and left the video up.

The MindGeek moderators/formatters are discouraged from removing illegal content for particularly profitable users. Generally, when an uploader has a history of highly viewed content, the employees are only permitted to send warning letters about illegal or inappropriate content.

There is a backlog of about five months between when a user reports a video and an authorized team leader reviews it to determine whether to remove it, allowing the video to remain available on the Pornhub site for download and redistribution for nearly a half year after the complaint was first reviewed.

The videos that the boy’s victimizer uploaded to Pornhub bore “disturbing titles that clearly suggested the child depicted was a minor, including but not limited to: ‘(Had sex with) my Step Nephew’; ‘Taking Teen Virginity’; ‘My sweet little nephew.’ The other 20 video titles are too crude and obscene for LifeSiteNews to cite.

Despite those titles and the content of the videos, Mindgeek “never informed the authorities about the identity of the child sexual predator, the fact he posed child sexual violence, or the fact that child sexual violence was being utilized on their platforms for profit to their mutual benefit.”

At no time did the MindGeek Defendants attempt to verify CV1’s identity or age, inquire about their status as minor children, victims of sex trafficking, or otherwise use their platform to root out the trafficking of their images. Instead, the MindGeek Defendants continued to disseminate these images around the world for profit even after law enforcement informed the MindGeek Defendants the images contained child pornography.

‘Pornhub would rather stop doing business than prevent kids from watching porn’ 

Pornhub has now ceased operations in 12 states that have begun to require age verification in order to enter the porn sites: Texas, Utah, Arkansas, Virginia, Montana, North Carolina, Mississippi, Kentucky, Indiana, Idaho, Kansas, and Nebraska.

“The world’s biggest porn site would rather stop doing business than prevent kids from watching,” conservative commentator and author Michael Knowles noted earlier this year. “Quite telling!”

“Pornhub has decided that age verification laws damage their business model to such an extent that it is better for them to simply block entire states rather than comply with (age verification laws),” LifeSiteNews columnist Jonathon Van Maren wrote in January.

Despite the legal troubles, Pornhub racked up a total of 5.49 billion visits globally in May, and with over 1.1 billion visits in the U.S. was ranked 10th nationally for online traffic. It’s not unusual for the website to reach over 10 billion total global monthly visits.

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