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While we should be back from our trip tomorrow in time to catch the Ontario election news coverage, this seems an opportune time to remind readers of the kind of magical thinking so favoured by extreme right enthusiasts such as young Tim Hudak. Tim, as you may recall, has made even lower corporate taxes a major part of his plan to create one million jobs, despite the fact that Ontario's rates are among the lowest in North American, and despite the fact that no apparent empirical data supports the equation that lower business taxes create jobs.
Here is a letter from today's Star that I think makes the point rather nicely:
Leaders make one last push as campaign winds down, June 10
The Fortune 500 companies in the U.S. recorded $1.08 trillion in profits last year. That was an increase of 31.7 per cent over the year before. During that time, these same companies increased employment increases of 0.7 per cent.
A similar picture exists on Canada. In 2001 corporate tax rates were 22 per cent. Today they stand at 15 per cent. We’ve lost $6.1 billion in government revenue while corporate profits have skyrocketed to $625 billion.
Tim Hudak talks about creating one million jobs through a lower tax rate. During the Mike Harris years in Ontario this philosophy did not work out very well. The provincial debt during the Harris years went from $90.7 billion in 1994-95 to $130.6 billion is 2002-03. This, while cutting many jobs and services and giving the province the legacy of Walkerton among other atrocities.
Former Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney tried to convince Canadian corporations to spend some of the “dead money” they have been sitting on after accumulating such large profits over the years. To date, the corporations have not responded.
For years, right-wing government leaders from Margaret Thatcher to Ronald Reagan to Mike Harris have been selling the supply-side economic lie. It didn’t work for them and it won’t work for Tim Hudak. A first-year economics student could tell you the reason for this. The rich don’t tend to spend additions to their revenue. The poor do. The rich accululate this money as the corporations in Canada have been doing for years.
In the Conservative attack on Kathleen Wynne on the radio, they end by asking, “Can you afford to vote for Kathleen Wynne?” I am wondering if I can afford not to.
Carl Nelson, Huntsville
Excellent letter, but it fails to add that the critical second part to our CURRENT (post 2009) crisis which is low demand. Hudak's (e.g. Republican, Eurozone, Tea Party) plan for austerity and rush to balance the budget will NOT create jobs and is a proven failure in every jurisdiction it has been applied to because it fails to stimulate. Creating more job losses does not increase demand! Why the rush to balance the budget when interest rates are at an all time low?? Is there ANY empirical evidence that corporate tax cuts stimulate demand? No business will invest when the demand is not there (despite being hectored by Flaherty or Carney). David Dodge (former Bank of Canada governor -not noted to be a radical lefty) comments in a Canadian Press piece today about how foolish these plans are, while diplomatically not naming the offending political party. Mr. Harper is just beginning to reap the the crappy harvest of his poorly timed, ideological cuts to the federal civil service. Keep an eye on the national job and economic growth figures for 2014 -he was really counting on the pipelines to flow that toxic Alberta dilbit. These wrong headed, depression inducing conbots need to be called out for what they are!!
ReplyDeletePerhaps not so strangely, Askingtherightquestions, the extreme right depends on faith-based tenets, not empirical evidence for their views. Cogitation has little place in their demon-haunted world, where 'lefties' i.e. progressives, are to be found behind every rock.
DeleteHudak has boasted that he will reduce corporate tax rates, already currently one of the lowest in the world at 11.5%, to the lowest in the world at 8%. At 8%, the corporate tax will be lower than many countries in the world which do not have universal health care or social benefits (e.g. many countries in Asia). How will Hudak be able to pay for those benefits? Clearly, he will not, so what else does he cut?
ReplyDeleteHudak will start reducing corporate taxes immediately but the 10% reduction in personal tax reduction will only be after he balances the budget. Clearly, Hudak's priority is lowering corporate tax rates rather than personal tax rates.
You'd think that the Liberals and NDP would have raised those points at the debate. You'd also think Horwath would be more upset with Hudak significantly lowering corporate tax rates ahead of personal tax rates than Wynne promising to raise taxes on the wealthy or to implement a pension for the working poor.
Apparently Horwath is not afraid of Hudak implementing those policies but she is afraid of Wynne reneging on her promises (to the NDP).
And so off we go to the election tomorrow, no thanks to Hrowath. And I am feeling that I cannot afford not to vote for the least of the three evils.
As a friend of mine observed on Facebook recently, neither the Liberals or the NDP have offered a spirited attack on Hudak's premises during this election. As well, I think the unpleasant conclusion you have drawn about having to vote for the least odious is one that many people are confronting in this election.
DeleteCustomers create jobs, Lorne -- ordinary customers, not the kind that drive Mercedes and BMW's.
ReplyDeleteA basic truth that seems to be lost on our political 'betters,' Owen.
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