Wednesday, November 05, 2014

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Robert Reich discusses the right's utter lack of - and aversion to - empathy as either a personal or political value. Bob Norman reports on a particularly galling example of that phenomenon, as Fort Lauderdale has begun arresting people for feeding the homeless. And CBC reports on one of the systemic effects of a government which couldn't care less about the people under its jurisdiction, as Saskatchewan is seeing a drastic increase in people having to rely on food banks.

- Speaking of the Saskatchewan Party's contempt for social issues, Simon Enoch highlights how its push to sell off Saskatchewan's liquor retailing system ignores the well-documented social consequences of increased alcohol consumption. And Duncan Cameron writes about the latest set of privatization schemes designed to extract public investments for corporate benefit, while Thomas Walkom laments how quick the Ontario Libs (among other governing parties) have been to follow that path even when it means both higher costs and worse services.

- Michal Rozworski argues that our tax system should not only ensure that the wealthy pay their fair share, but also limit anybody's ability to accumulate so much as to distort the distribution of power:
[It] turns out there are good reasons for taxing the rich beyond raising revenue, and these reasons have precisely to do with changing how things are done.

The Nation has an excellent explainer of a recent study on the drastic fall in top tax rates over the past few decades. The authors, including Thomas Piketty of Capital in the 21st Century fame, wanted to see why the share of pre-tax income going to the very richest rose at the same time as top tax rates fell.

In short, they found that the rapidly growing incomes of those at the top were not due to rising productivity as mainstream theory suggests, but resulted from a better bargaining position. When top tax rates are low, CEOs, financial managers and others are motivated to spend more time trying to raise their earnings — for instance, stacking corporate boards that set salaries or giving out bigger bonuses — because they’ll get to keep more of them. Across countries in recent years, growth rates were very similar regardless of whether the top tax rate was high or low; the pie grew more or less as fast everywhere. In the countries where top taxes were low, however, top earners were able to capture a much, much bigger piece of the pie for themselves.
...We can raise top tax rates not only, maybe not even mostly, to fill public coffers but also to help restore bargaining power to the rank and file in workplaces, making top managers less willing to make out with all that they can for themselves — a top-down aid to those fighting inequality from the bottom up.

The lesson here is that taxes do much more than just redistribute income. They can also change institutions such as the family and the firm, redistributing power and changing how we relate to one another. The more pernicious tax cuts for the rich do more than leave money in well-heeled pockets. By the same token, the opposing call to “tax the rich!” can be a way to achieve more than padding the public purse.
- But Dennis Howlett points out that the Cons are instead looking to hand billions of dollars to the people who need the gift least, while Carol Goar notes that the calculated effect of income splitting is to redistribute income (and power) upward.

- Finally, Naomi Klein writes that big polluters are starting to receive some of the public opprobrium they deserve.

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