We've Heard It All Before

With Conservative leadership hopeful Maxime Bernier recently resurrecting the widely discredited and tired trope of a rising tide lifting all boats, Star reader Salmon Lee of Mississauga offers all of us a timely dose of reality:

Tax cuts only help the rich

Re Maxime Bernier’s vision for Canada, May 8

Yet another politician selling the myth that the economy will grow with tax cuts. If Conservative leadership candidate Maxime Bernier’s economics are sound, we should have been experiencing strong economic growth over the past few years. With corporate tax revenues having been reduced by more than $20 billion annually, thanks to the generous tax cuts from the Harper and McGuinty governments, we should be seeing 3-per-cent growth and millions of well-paying jobs. Instead, we see bigger paycheques for CEOs, stagnant wages and more lower-paying precarious jobs. And loads of uninvested cash in corporate coffers. Canadian politicians should learn from the social democratic Scandinavian countries on how to create a society that gives people a secure future and an economy that can support it.

Put The Money Where It Will Do the Most Good

That's the advice of Dylan Marando, who, like many others, has come to the conclusion that tax breaks for the wealthy and corporations just means greater wealth accrual and dividend payouts, not job growth. The fact that corporations are currently sitting on over $500 billion is something no one should be proud of.

Mounting evidence demonstrates that measures like an increased minimum wage can be an effective means of boosting aggregate commercial activity, even when we take into account the potential negative effects on business investment.

A study from the National Bureau of Economic Research demonstrates the stimulative benefit of concentrating tax breaks on lower-income groups versus those in top income categories. The Reserve Bank of Australia and the Congressional Budget Office offer similarly encouraging analyses of low-income households’ marginal propensity to consume as the result of income shocks like tax cuts, rebates, or lump-sum transfers.

Despite the popular stereotype of the poor spending their money on alcohol and cigarettes, a study conducted last years suggests something quite different. Examining the Canadian Child Tax Benefit and the National Child Benefit, a group of Canadian economists found

that receipt of these programs coincides with increased expenditure on things like food, child care and education for low-income families, as well as large declines in alcohol and tobacco use in the all families sampled.

While hardly discounting big-spending items like infrastructure improvements to boost the economy, Marando suggests that perhaps the biggest stimulatory 'bang for the buck' may indeed lie in quieter, progressive improvements where they are needed most: the poor among us.

It may not be the message the business agenda wants us to hear, but perhaps it is time that we all thought outside the increasingly narrow and confining corporate box.

Now This Is Getting Ridiculous

Apparently, Stephen Harper feels that Canadians are real whores for tax cuts:

Stephen Harper is kicking off a quiet day on the federal election campaign trial by promising tax relief for service club members.

Harper says members of organizations such the Kiwanis, Lions and Royal Canadian Legion can claim a tax break for their membership fees if the Conservatives are re-elected.

I'm sure that will make the disaffected vets much, much happier.

Hither And Thither

For a government whose every policy seems to be concocted with an eye to re-election, it is not surprising that Finance Minister Joe Oliver has not yet firmed up a date for this year's budget. After all, he and the rest of the cabal need to know how effective their war on Canadian peace-of-mind is going first.

Have they, for example, succeeded, via Bill -C-51, in diverting the masses away from what heretofore has been their biggest concern, the economy, now forecast to have a rough year ahead thanks largely to the sharp drop in oil prices? Are lavish tax cuts and credits having their intended effect? Is appealing to Canadians' self-interest at the expense of the collective still working?

A new poll might prove instructional for 'Uncle Joe' et al.

The economy trumps terrorism by a massive margin as a priority for Canadian voters, according to a new poll, even as the Conservative government turns its attention to national security in preparation for this fall’s election.

Canadians are also far more likely to favour infrastructure spending over tax cuts as the best way to give the economy a boost.

Apparently, Harper is in need of something spectacular to move some recently-awoken citizens:

A Nanos survey conducted for The Globe and Mail found 90 per cent of respondents said the party or leader with the best plan for the Canadian economy will be more important in determining who wins than the party with the best plan to fight terrorists. Only 4 per cent said fighting terrorism is more important than the economy.

Only 4 per cent place fighting terrorism above the economy? Such results are enough to make the most ardent of war propagandists blush.

These findings come despite all of the time being spent on entering unwinnable wars and trying to convince Canadians that the only thing standing between them and ISIS is Dear Leader and legislation that would weaken our Charter Rights.

And there is even more indication that Canadians are willing to think outside of their own immediate interests, despite the best efforts of the regime:

When asked by the polling firm what the government should do with a budget surplus, building infrastructure, at 32 per cent, was the most popular response. Paying down the national debt was the second-most popular response at 30 per cent, followed by 23 per cent who said the government should invest in social programs and 14 per cent who wanted tax cuts.

These are surely encouraging signs for progressives, but such obvious failures of the well-oiled propaganda machine cannot be comforting for the Harper government.

Surely heads will roll.

Two Takes On Taxation

The contrast couldn't be more striking. As announced by federal Fiance Minister Joe Oliver the other day, Ottawa is well on its way to posting a $9 billion surplus, but Canadians shouldn’t expect any massive new spending programs. Instead, he plans to reduce taxes once the deficit is eliminated in the 2015-16 budget, likely next winter.

On the other hand, the Ontario government, under Premier Wynne, proposes a host of new spending and moderate tax increases under the budget it brought down yesterday.

Progressive measures include raising the wages of home care workers, more money for infrastructure, welfare hikes, new health benefits for children and a plan to hire at-risk youth in provincially funded infrastructure projects.

Perhaps the boldest proposal is an Ontario Pension Plan that will, years down the road, alleviate a good deal of the poverty faced by retirees who currently don't have company pension plans, it is the same model that the Harper regime rejected as "too risky for our fragile economy."

Two competing visions of the role of government; the federal one, which appeals to the selfishness that resides in all of us, and a provincial one which, albeit an election budget, appeals to our better natures.

Which one will prevail? Who knows? But now might be a good time to watch the following TVO podcast, taken from Alex's Blog, in which Alex Himelfarb talks with Steve Paikin about why taxes should not be considered a four-letter word:

A Reading Recommendation.

I have a deep respect for Alex Himelfarb, the director of the Glendon School of International and Public Affairs and tireless proponent of responsible, progressive taxation. The latter, as one can well-imagine, likely makes him persona non grata in many circles, but those are likely the same circles that close out responsible thought or discussion on any topics that might threaten to puncture the artificial and insular world they encase themselves in.

It is, of course, easy to take the expedient route, as have politicians like Stephen Harper, Justin Trudeau, and Thomas Mulcair at the federal level, and, here in Ontario, Tim Hudak and Andrea Horwath, all essentially proclaiming the evils of taxation, some more stridently than others, as they promise no tax increases. Clearly, in taking such positions, they are playing to our basest impulses.

Alex Himelfarb refuses to play that game. In his latest reminder of things our political leaders would rather we not contemplate, Without a tax debate, we risk sleepwalking into the future, Alex and his son Jordan present this thesis:

Canadians have a right to know what they’re giving up before celebrating the next round of tax cuts.

The article makes reference to the Himelfarbs' book, Tax Is Not a Four-Letter Word, a collection of essays that explores the tax question; its central purpose is perhaps best expressed here:

In the book we do try to counter the view that taxes are simply a burden from which people must be relieved. Simply, they are the way we pay for things we have decided to do together because we cannot do them at all or as well alone. Our approach has yielded reactions both positive and negative.

And this is the crux of today's Star article as they argue that we cannot have an honest discussion about taxation because we do not have a clear understanding of the relationship between taxes and what they buy:

Two successive parliamentary budget officers, whose job it is to know, admit they cannot get the information they need to determine the costs and consequences of tax and spending cuts. So how are we expected to know? And without information about the trade-offs, how do we make informed democratic decisions?

They argue that without this basic knowledge, we as a society cannot make an informed decision on what constitutes proper taxation:

Whether we’re taxed too much or too little is a perennial debate that now needs rebalancing. It’s all well and good to say that many Canadians want smaller government but that means nothing unless it’s based on some understanding of how this will affect our ability to pursue our shared goals. We ought to know what we’re giving up before we celebrate the next round of tax cuts.

That seems to me to be the crux of the problem we face today as a society. The Harper government would have us believe that the only thing we are giving up when tax rates go down is an unwarranted intrusion of government into our lives. The Himelfarbs argue that if we look beyond the self-serving rhetoric of our political overseers, what we lose in embracing that mentality is something much different and ultimately much more costly to all of us.

A Letter We Should Widely Share

Although he likely doesn't articulate anything that progressive bloggers don't already know, Star letter-writer Paul Kahnert of Markham neatly and succinctly addresses the real design behind tax cuts for corporations and the wealthy. It deserves to be shared widely with those who may not be fully aware of some essential facts.

Have we had enough? Insight Jan. 4

Tories like Stephen Harper and Rob Ford (and Tim Hudak) follow the Tory plan of tax cuts, which mostly goes to corporations and the wealthy. Tax cuts then create a crisis in public services. Then the Tories bring in privatization to deal with the crisis by selling public assets and services to the corporations and the wealthy.

Why do we the public constantly vote for this scam? You can’t build a civilization on tax cuts. Look where we’re going with the Tories. A just civilization was never built on tax cuts and never will be.

Where is the politician who promises fair taxes, good governance and independent oversight? This is how we built our city, our province and our country before. This is how we built a just society.

There is more wealth now than there ever has been. We can afford healthcare, education, public services and livable pensions. The only reason Harper doesn’t want to increase the Canada Pension Plan is because his friends at the banks won’t get their service charges.

Strip away the smoke and mirror show of Harper, Ford and Hudak and you’ll see the truth. The only thing that Tories do, is transfer public wealth to the private few.

Paul Kahnert, Markham

Why Fair Taxation Is Crucial

Now here is something everyone who wants to be well-informed should watch. Part of TVO's Big Ideas series, it is a talk entitled How Did Taxes Become a Bad Word? by Alex Himelfarb, Director of the Glendon School of Public and International Affairs at York University, former Clerk of the Privy Council, and fellow blogger.

Unlike the strident and largely irrational hysterics of the right who preach salvation through tax cuts, Himelfarb offers us a carefully reasoned argument about how to achieve greater equality and the kind of society that all of us, in our better moments, hope for.

I found him inspiring to watch.