Sunday, October 06, 2013

Sunday Morning Links

Assorted content for your Sunday reading.

- Alex Himelfarb and Jordan Himelfarb comment on Canada's dangerously distorted conversation about public revenue and the purposes it can serve:
As we argue in our new book, Tax Is Not a Four-Letter Word, the Canadian tax conversation has become dangerously distorted. Any reasonable discussion of taxes must take into account the highly valued public services they buy. But in Canada, and throughout much of the Anglosphere, these inextricably linked concepts — taxes and public services — have somehow become divorced. We now live in an environment in which the first question we ask of any policy idea is “How much will it cost?” whereas we never ask of tax cuts “What will we lose?” Canada’s slow-motion austerity may blind us to the consequences, but they are no less real: a less resilient and generous country and a stunted political imagination.

It’s not surprising then that even as federal taxes as a share of GDP keep hitting new lows, even after billions in cuts over the last couple of decades by all levels of government whatever their political stripe, more reductions are in store. Income splitting, for instance, would put money in the hands of middle-class families, many of whom feel stretched by decades of income stagnation. But a strong case has been made by experts that this tax cut would treat families inequitably, would create disincentives to work for some and would deprive federal and provincial governments of billions that could be used to better serve families and children — say, infrastructure or child care.
The current conversation is a consequence of the neo-liberal economic policy that began to dominate American and British politics in the early 1980s, and emerged more slowly and subtly in Canada at around the same time. In this view, economic growth and individual freedom are best served by reducing government and its influence and letting the market do its work. Politically, tax cuts were treated as a free good — with little discussion of what public services would be lost and at what cost. We still get promises of tax cuts as though they will magically pay for themselves or will simply require greater efficiencies and less waste. Yet the numbers on waste never add up and the cuts inevitably lead to eroding public services, rising inequality, environmental deterioration and lost opportunity. There is no gravy train and no free lunch.
- But then, the Cons are going out of their way to set up government funding structures which avoid doing any good at all - including "social finance" intended to make sure that poverty is seen as a source of profit rather than a problem to be fixed, and a job grant system which may sound familiar to those of us who remember employer-focused child care tax credits which produced zero results.

- Meanwhile, Aaron Wherry documents the Cons' flat-out lies when it comes to the evidence of the effectiveness of physician-prescribed heroin as part of a rehabilitation program. Which fits all too well with the Cons' continued evidence-averse handling of the census. 

- Murray Mandryk joins the ranks of observers wondering why Brad Wall and the Saskatchewan Party have decided to pick a gratuitous fight with the province's First Nations over revenue sharing.

- Finally, Catherine Rampell reminds us how boom and bust cycles exacerbate inequality - as less-wealthy people are all too likely to end up buying in just at the end of the boom, while only the cash-rich can profit from the subsequent crash.

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