Saturday, May 04, 2013

On implausible assumptions

I've made the case questioning gratuitous privatization of SLGA's liquor sales (as well as a controlling stake in ISC) based on the actual profit levels associated with real Crowns. So what kind of contrary argument is there for pushing privatization rather than public investment? Let's ask the Leader-Post's editorial board:
(M)ore private liquor stores means less profits for SLGA to give to government. It's (sic) familiar argument, but not universally accepted: critics say this ignores the income taxes private firms and their employees pay, and the taxes generated by the construction of new stores.
Now, the apparent critics might have a point - if we lived in a world where SLGA employees didn't pay income taxes, or where there was any meaningful difference in the economic activity associated with the construction of new stores for private operation as opposed to public operation. But I'd hope we can discuss the subject based on a comparison from this world, where those factors are at worst neutral as between private and public operation of new stores.

 That means the only comparison is between the public enjoying all of the profits associated with new stores, or a mere 10% of the profits (minus any further deductions, giveaways and jurisdictional transfers) from a private operator. 

Which would make for a rather easy decision for anybody looking out for the province's best interests, rather than seeking to prioritize private profits at the expense of the public good. But unfortunately, the Sask Party has had far too much help in exactly the latter mission.

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