FACE TO FACE: Are tax cuts for business and the wealthy good for the economy?
Tax cuts are killing us. Tax cuts have re-distributed wealth upwards for the last dozen years. The rich are getting richer, the middle class and working poor are foundering.
Cash-strapped governments are slashing programs and pensions, all because of our pathological insistence on cutting taxes for the rich.
Year after year, we give tax breaks to the wealthy. Corporate taxes have dropped from 28% in 2000 to 15% in 2012. This represents a loss of government tax revenue of $26 billion - each year.
My colleague says such giveaways are great for encouraging "job creators" to invest, and that jobs, salaries and social programs will all benefit eventually.
But job creators aren't investing and we aren't benefiting.
Corporate job creation hasn't matched economic growth for a decade and since 2000, when the tax cut gravy train started, corporate investment in equipment and machinery has dropped by 2.2%.
And not only have job creators not created jobs, serial tax cutting has made them less competitive.
According to the World Economic Forum, Canada's corporations have gone from fifth most competitive in 1999 to 16th most competitive in 2012 - behind all the Nordic countries, whose corporate tax rate is much higher than Canada's.
The dependable profits of regular tax cuts have made our corporations complacent. Years of corporate welfare have left them bloated, averse to risk and indifferent to upgrade and modernization. Why bother being lean and mean?
So, instead of expanding, corporations, since 2000, have stuffed over half a trillion taxpayer dollars under their collective mattresses.
Is anyone else getting tired of waiting for this money to trickle down?
We cut jobs, bash public sector unions, expand casino gambling and raise fees on everything, all in order to pay our tax tithe to rich Canadians, who promptly stick our money in their jeans. As a result, the disparity between rich and poor Canadians continues to burgeon.
We need to stop the madness and (gasp), raise taxes - on corporations, the rich and even the upper middle class if necessary.
Rather than waiting for money to trickle down, we need to make money pour down - into the hands of long-suffering working Canadians, who, rather than hoarding it, will most surely stimulate the economy by spending it, to live.
Face to Face columnist Jim Nelson is a retired Tri-City teacher and principal who lives in Port Moody. He has contributed a number of columns on education-related issues to The Tri-City News.
