Part 2 Conservative Economics

Whether in Alberta with Jason Kenney, Ontario with Doug Ford, or federally with Andrew Scheer, Conservatives perpetuate a myth that we are over-taxed, that high taxes are bad, deficits are bad, and that we don’t want to leave our grandchildren our debt burden.

Mr Kenney will be gutting Alberta’s fiscal capacity soon despite the fact, they are the lowest taxed Province in Canada. Mr Scheer’s current promise is to “leave more money in your pockets” if you elect him in October – more “magical thinking”! Exactly how will he accomplish that when his predecessor – Stephen Harper – already gutted Canada’s fiscal capacity and tore at our social fabric with billions in cuts?

Enough is Enough. We need an honest discussion about why Conservatives want to continue cutting taxes. How many federal or provincial public servants need to be fired before they are satisfied? What social programs are Canadians willing to do without until they are satisfied?

Harper’s magical thinking on gutting Canada’s fiscal capacity meant huge tax cuts for Corporations while tearing Canada’s social fabric. When will we have a serious conversation about the costs of tax cuts?

Conservatives claim that they are better economic managers but are they? In fact, 74% of Canada’s debt was created by Conservatives, not Liberals.

One of the world’s most influential economists is on a mission to save capitalism from itself

“She is an ardent believer that governments should do more than play a passive role in fixing market failures, and be allowed to embrace their entrepreneurial spirit to steer the direction of innovation and economic growth.”

Before You Complain About Taxes, Read This

“Since 2006, Canada has cut federal taxes by $332 billion….

“If we had kept even half of that, even 40 per cent of that, think of how much more resilient we would have been during the recession, how much more help we could have given the provinces and people who paid a huge price during that period of time, to help young people get into the workplace, to tackle climate change and to deal with infrastructure,” Himelfarb says. “That’s the cost of tax cuts.”

“You hear today [from Conservatives like Ford in ON, Kenney in AB] that tax cuts are going to be paid for by cutting ‘gravy trains,’ by reducing waste, by cleaning up government. It’s what the philosopher Joseph Heath calls ‘magical thinking.’ We so desperately want this bargain; we want it to be free,” Himelfarb says. “We want Swedish-style services and American-style taxes so badly that we’re ready to believe that we can have these tax cuts for free.”

This chart certainly doesn’t suggest that Canadians pay too many taxes

JUST IN: Congressional report: GOP tax cuts didn’t fuel economic growth

“…the GOP’s tax plan didn’t pay for itself, didn’t make much of a difference on American workers’ wages, and didn’t boost domestic capital investment.

The tax policy did, however, deliver a massive break to big corporations, which didn’t amount to much for those businesses’ employees.

A year and a half later, pretty much everything Democrats said about the Republican policy has proven to be true.”

Businesses Getting Billions In Tax Cuts Despite Rising Corporate Cash Reserves

“Profitable Canadian businesses are set to reap $2.85 billion in additional income tax savings in 2012, even as Prime Minister Stephen Harper complains about all the private “money sitting on the sidelines.”

“The last of five annual corporate tax cuts took effect Sunday, reducing the federal rate by another 1.5 points to 15 per cent. The move comes as corporate Canada, from multinationals to midsize businesses, squirrels away hundreds of billions of dollars as it rides out a second storm of global economic turbulence in the past three years.”
http://www.huffingtonpost.ca/2012/01/01/tax-cuts-corporations-canada_n_1178382.html

2015: The Interview: Nobel laureate and economist Joseph Stiglitz

“Q: We’re in the middle of an election in Canada that’s about tax cuts and austerity versus higher benefits and increased spending—deficits versus no deficits. How would you make the argument to the Canadian electorate that they should favour looser fiscal policy?

A: There is a long-standing, strong argument for what is called a balanced budget multiplier—if the government increases taxes at the very top and increases spending on infrastructure, education, technology, it stimulates the economy. Over the long term that reduces the deficit because higher growth means more revenue. Beyond that, the theories of austerity have been totally discredited. The IMF, which is not exactly left wing, has repeatedly said austerity is contractionary. There isn’t any body of economic research that supports the Harper [government] view.”

The case for cuts was a lie. Why does Britain still believe it? The austerity delusion by Paul Krugman

“But it’s foolish and destructive to worry about deficits when borrowing is very cheap and the funds you borrow would otherwise go to waste.”

VIDEO: TAX HAVENS COST ALL TAXPAYERS & THREATENS DEMOCRACY

The Tax Free Tour: “Where do multinationals pay taxes and how much?” https://www.youtube.com/watch?list=PL9ABD0BB3C3BEDE19&v=d4o13isDdfY

VIDEO: THE GREAT CANADIAN TAX DODGE

“It is estimated that between 100 and 170 billion dollars leaves Canada every year, untaxed. Much of it is siphoned off to Canadian-made offshore tax havens. “The Great Canadian Tax Dodge” documents the birth of the Canadian Tax Fairness movement and examines the issue of tax avoidance, exposing the sophisticated corporate strategies and tax loopholes commonly used to legally avoid tax.”
http://tvo.org/video/documentaries/the-great-canadian-tax-dodge/

Shifting Fortunes. Uncovering Canada’s role in corporate tax evasion.

Canada: A New Tax Haven — How the Country That Shaped Caribbean Tax Havens Is Becoming One Itself

“Ottawa’s approach is to “fight tax fraud by legalizing it.”
“Ottawa has made a great deal of tax avoidance legal for businesses and wealthy individuals, thereby lessening the burden on those best able to pay. In contrast, individuals earning wages and salaries have no choice about how their income is taxed and cannot structure their earnings to minimize taxes. Furthermore, the complexity and secrecy that surrounds international corporate taxation mean those taxpayers who compensate for the lost corporate tax revenues—mainly wage- and salary-earners—are not aware of how they are subsidizing the expansion of multinational businesses.”
http://reviewcanada.ca/magazine/2015/09/shifting-fortunes/

Corporate Canada’s cash in tax havens explodes to $199 billion under Stephen Harper

“”Walk down a street in Cayman Islands and you will see very little evidence of $36 billion in Canadian investment. But what you will see are small buildings with hundreds of mail boxes that are head office to more than 18,000 shell companies – most of them subsidiaries of corporations trying to avoid tax,” Howlett adds.”
https://www.broadbentinstitute.ca/en/post/corporate-canadas-cash-tax-havens-explodes-199-billion-under-stephen-harper

Tax avoidance: Canada-Barbados tax deal loopholes revealed

Corporate Income Taxes, Profit, and Employment Performance of Canada’s Largest Companies

Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds

“Analysis of six decades of data found that top tax rates “have had little association with saving, investment, or productivity growth.” However, the study found that reductions of capital gains taxes and top marginal rate taxes have led to greater income inequality. Past studies cited in the report have suggested that a broad-based tax rate reduction can have “a small to modest, positive effect on economic growth” or “no effect on economic growth.””

Canada’s corporate tax cuts didn’t create jobs, they created corporate cash hoarding

““Rather than investing their enlarged earnings into growth-expanding industrial projects, Canada’s corporate sector has increasingly stockpiled cash on its balance sheet,” Brennan says.”

5 things to know about Canada’s economy

Innovation, Tech, and Research are those areas that PM Trudeau targeted after election and Harper allowed to atrophy.

“The drop in global energy prices is not the only reason for Canada’s sluggish economy. There is much hand-wringing over Canada’s lack of innovative, globally competitive companies at a time when its traditional manufacturing industries are being eroded. Canada trails other developed economies in areas including corporate research and development, information technology investments, patents and productivity.”

2013: Stephen Harper and the knowledge economy: perfect strangers

“Investment in “information and communication technology” — computers, networking and phone tech — has lagged in Canada behind U.S. levels throughout the past decade, so that now the gap of total ICT stock between our country and our most important neighbour is much greater than when the Harper government came to power.”

2015: Canada shows a “disturbing” decline in innovation and R&D

“It’s hard to imagine the state of Canadian innovation being more dismal, with an expert panel labelling the country’s standing as “disturbing” in a new report from the Science, Technology and Innovation Council.”

MORE TO FOLLOW. See my Facebook Notes for archived articles on Harpernomics