Thursday, November 01, 2007


Why Tax Cuts Make Us Weak By Murray Dobbin

Why Tax Cuts Make Us Weak

Taxes are the price of a civilized society.

By Murray Dobbin

November 1, 2007

So here we go again, another round of huge tax cuts as the country continues
down the road to a neo-con dystopia. Over the next five years the revenue
that pays for the things Canadians say they want will drop by $60 billion.
There are cuts to the GST, to personal income taxes and corporate taxes --
with the latter dropping by 2012 to 15 per cent (from 21 per cent today), an
outrageous corporate giveaway, giving us third world status in the "attract
investment" race to the bottom.

It is the continuation of a 20 years process of diminishing the country -- a
conscious plan implemented by three prime ministers from both the Liberal
and Conservative parties. Between 1984 and 2006 the federal government,
which is supposed to be looking after the interests of the country,
voluntarily gave up over $250 billion in revenue -- an amount that would
have made a huge difference in the quality of life of Canada. We can now add
$60 billion more. Provincial governments are equally culpable.

It's not hard to list the things we could now be enjoying as a country had
those cuts not been made, especially taking into account the annual revenue
we would have: a national child care program, a national pharmacare program,
a home care program, social housing, radical cuts in tuition fees, and the
elimination of this country's staggering infrastructure deficit, estimated
to be between $60 billion and $120 billion.

Why business needs taxes

Of course, the conservative voter would say, this is a mostly a left-wing
wish list. But look more closely at what could be done with these surpluses
and with a return to tax levels of the fairly recent past. Take the
infrastructure deficit: the crumbling of our municipal services like sewer
and water, our roads and bridges, and our ports. Spending on these things is
hardly a left-wing fantasy. It is business which depends on these things at
least as much as ordinary citizens and communities.

We hear ad nauseam about Canada having to be globally "competitive," but how
on earth can we be competitive if our bridges are actually falling down, as
they are in Quebec? Does the corporate elite in this country really believe
that the only thing governments need to do to remain competitive with other
jurisdictions is to cut taxes? We have been cutting taxes on corporations
for 15 years to the point where we now tax them considerably less than they
do in the U.S. But still we aren't "competitive."

The role of corporate tax cuts in spurring investment has always been
exaggerated by big business. Surveys of CEOs over many years have shown that
the income tax rate usually plays a secondary role in investment decisions.
The more important issues include the cost of borrowing, availability of
trained workers, energy costs, the reliability of transportation
infrastructure, access to markets, and land costs. The issue of income tax
is only important if you actually make an income.

And what about child care, another purely left wing demand? Hardly, if you
take seriously all the corporate hand-wringing about the worsening labour
shortage. What do the tax-cutters think will solve the labour shortage? Tens
of thousands of Canadians have long since given up even looking for work
because child care is so expensive it would absorb most of their take home
pay. A major Health Canada study [ ] revealed that
deteriorating conditions in work/life balance was the key factor in Canada's
plummeting birth rate. No wonder there's a labour shortage -- we aren't
making workers any more.

What about a pharmacare program? The lack of such a universal program costs
large companies hundreds of millions each year -- both in terms of the costs
of drugs within medicare and the cost of the health plans they provide their
employees. Tuition fees? How is it good for competitiveness if fewer and
fewer young people can actually go to university -- and those that do are
saddled with $30- 80,000 in debt? Social housing? Ask the Vancouver Olympic
Organizing Committee if they think having thousands of people living on the
streets makes us internationally competitive -- they are panic stricken
about Vancouver's image.

Truly 'competitive' nations

Will yet more tax cuts make us more "competitive" as Finance Minister
Flaherty said in his economic update? If the figures of the World Economic
Forum -- the most elitist international forum on the planet -- are to be
believed, more tax cuts will actually have the reverse effect. In 1999, the
year before Paul Martin introduced his huge tax cuts, Canada was 5th in the
competitiveness sweepstakes. After seven years of tax cuts we are in 16th
place.[ ] Who beats us?
Amongst others, the Nordic countries, which collect half their GDP in taxes
each year. Nine of the 15 countries ahead of us have higher taxes.

This draconian slashing has nothing to do with competitiveness. It is
ideology run amok. It is no secret that Stephen Harper has a visceral
contempt for what Canada became after the Second World War. But he can't get
rid of government directly so his plan is to gradually starve it to death.
The relentless attack on the tax base creates the useful crisis corporate
governments need to justify cutting social programs, environmental
protection and other social roles of government. Keep cutting taxes and
revenue and eventually you get deficits.

The continuing savaging of government revenue is the throwing down of the
gauntlet by the right to all those who support activist, social democratic
government. The problem is that no one in the constellation of Canadian
progressive groups, including national unions, seems willing to take up that
gauntlet. While these groups are making admirable efforts to keep medicare
public, to lower tuition fees, to establish universal child care, to create
social housing and increase foreign aid, none of them have yet taken on the
critical, national task of fighting tax cuts. Yet all of these things depend
on government revenue. Without that revenue any political victories on these
issues will be pyrrhic ones.

It is long past time that civil society organizations, especially national
unions, take up the challenge presented by massive reductions in government
revenue. Let's mobilize Canadians around the conviction that taxes are the
price we pay for a civilized society.
To everyone who is reading.


Did you know that 70 per cent of the world's cocoa suply comes from Ghana, Nigeria and The Ivory Coast in West Africa?
Did you know that the people working here are not adults but children aged 12 to 14? Did you know that most of them are trafficked (kidnapped) and that they have minial food and sleep, beatings and of course, no pay?

12,000 children may have a fighting chance of a different future if we choose to change what we eat.

Well, its no lie.... according to the US Deparment of State more that 109,000 children were working in cocoa farms on the Ivory Coast in what they termed "worst forms of child labour."

At least 12.3 million people are victims of
forced labour worldwide

So PLEASE do everything you can to make people aware of these horrifying facts and do not by non fair trade chocolate. If your chocolate is fair trade, it was made by people who have a choice to work, who have pay and are able to talk to their families!!

From Stargirl.

Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home

This page is powered by Blogger. Isn't yours?

Subscribe to Posts [Atom]