Sunday Afternoon Links

This and that for your Sunday reading.

- Alex Himelfarb writes about the corporate push to treat taxes as a burden rather than a beneficial contribution to a functional society - and why we should resist the demand to slash taxes and services alike:

How is it that we don’t now ask of these tax cuts upon tax cuts: What will be the consequences for these public goods, goods that most of us continue to value, that demonstrably contribute to the general welfare? In part the answer may be that we devalue public goods because they are not priced and so we underestimate or simply take for granted their value. We surely don’t think very often, if at all, of how much it costs to light our streets, or ensure that clean water pours from the tap or that we can more or less trust the food we eat. But these are all things we buy with our taxes because together is the only way we could ever afford them.

Furthermore, public goods don’t give us any edge over our neighbours. Unlike the bigger house or the fancier car, our access to high quality education or healthcare confers no special status. Perhaps that is one reason that some, usually rich, Canadians insist that they should be able to buy their way to better or faster service even when the evidence is overwhelming that that would make things worse for the many. We ought to be asking whether more money to fuel the consumption race is really what we need, whether a little more change in our pocket is more important than strengthened public goods – better health care, affordable child care, first-rate infrastructure, access to justice…
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The promise of tax cuts funded through ending the gravy train is what University of Toronto philosopher Joseph Heath has called a magic hat, wishful thinking. Successive parliamentary budget officers have told us precisely this. So we should not be surprised that the governments which for years promised painless – consequence-free – tax relief, now tell us that our most basic programs are unsustainable, that we have no alternative but to cut or privatize services and forego investments. New programs? Unthinkable. Of course tax cuts have consequences: in a word, austerity.

Austerity in Canada is certainly not as deep or brutal as in some parts of Europe. But even our slow motion version brings with it a vicious cycle of erosion and distrust. It leads to what game theorists call a social trap—when we don’t trust one another enough to do what we know is in our interest. Economist Hugh Mackenzie has been quantifying the value of the public services we buy with our taxes and has found that for the vast majority, taxes are one of the last great bargains. Most of us get more back than we put in, and that’s the case at every stage of the life cycle. But austerity undermines our trust in this bargain. Programs and services are increasingly targeted, serving only a few, or are starved of resources and slowly erode, amplifying our perceptions that governments can’t do anything right, further sapping our will to pay taxes. The family that celebrates tax cuts soon finds that the gains are dwarfed by what is lost—for example, in out-of-pocket healthcare expenses, unavailable and more expensive child care, delayed old age security, higher tuitions, endless user fees including higher postage, and the end of home delivery. And then they hate government and taxes even more.

Austerity feeds short-termism. We today reap the benefits of public services built by previous generations more willing to pay taxes. But what will we be passing on to future generations? In the name of austerity we put off investments critical to our future. We also put off the maintenance of our existing infrastructure, our schools and hospitals, roads and bridges, the worst kind of false economy, passing on even more expensive problems to future governments, future generations, jeopardizing our economic performance, and exposing citizens to avoidable health and safety risks.

Austerity also leads to greater inequality, eroding our redistributive institutions and the programs that reduce and help mitigate inequality. The consequences of austerity always fall first and most heavily on the vulnerable—refugees, migrant workers, prisoners, the poor, people with disabilities, and on the young—a kind of trickle-down meanness.

- Lynn Stuart Parramore interviews Joseph Stiglitz about the sources of growing inequality and the public policy response needed to combat it. And Henry Grabar discusses how the most significant concentrations of wealth are being hidden from public view.

- Meanwhile, David Dayen highlights the need for an accurate history as to the type and volume of public assistance shoveled toward the financial sector after it crashed the global economy, rather than toward the people most affected by the economic crisis.

- Finally, Humera Jabir discusses the Cons' efforts to devalue Canadian citizenship by treating it as a privilege which can be undone by the actions of foreign governments, rather than a right which can't be stripped away.