Sunday, November 22, 2015

Sunday Morning Links

This and that for your Sunday reading.

- Louis-Philippe Rochon explains how higher taxes on the wealthy can be no less a boon for the economy than for the goal of social equality:
In fact, empirical analysis shows that while the relationship between higher taxes and economic growth is complex, there is no proof that raising taxes on the wealthy will lead to slower economic growth.  In fact, in many countries, including Canada, higher growth rates in the post-Second World War era have been associated with much higher marginal tax rates.
Between 1940 and 1980, the top marginal income tax rate in Canada was much higher, at well over 70 per cent. Despite these high rates, Canada's economy prospered. In other words, with a proposed new tax bracket in Canada of a mere 33 per cent, we are still far from reaching past levels, and even further away from levels that would be detrimental to tax revenues or even growth. We could increase it even higher with no repercussions on growth or even job creation, and the benefits of a less unequal wealth concentration could even have a positive effect on the economy.
(H)ow can we explain higher taxes on the rich and higher growth? It seems counterintuitive. Yet, it isn't, for two reasons. First, higher taxes on the top one per cent reduce income inequality. Many studies show that a more even (or less uneven) distribution of wealth and income contributes to higher spending and growth.

In the case of Canada, the higher tax rate for high-income earners is compensated by lower taxes on the middle class, who then will have more money to spend. Since the top one per cent save a higher proportion of their income, raising taxes for them won't affect their consumption, just their savings.

Second, by collecting more tax revenues, governments can spend more, and there is a definite and proven correlation between higher government spending and higher economic growth, despite all the non-Keynesian naysayers. The data is clear on this.
- Juliette Jowit discusses the pathetic pace being made on the path toward gender pay equity. And Maureen Conway points out the need for both public policy and labour relations decisions oriented toward improved long-term outcomes - particularly given the glaring failure of short-term thinking over the past few decades.

- The Associated Press reports that a particularly egregious example of employer abuses is resulting in rare but well-deserved jail time for the perpetrator.
- Charles Mandel discusses John Brennan's observation that climate change is already (and will increasingly become) a major source of political instability, while David Roberts offers a useful analogy to gravity in assessing its effects. And Geoff Stiles offers a proposal as to how Canada can go from being a laggard to a leader at the Paris climate change conference.

- Finally, Doug Saunders writes about the importance of integration in order to combat extremism of all kinds. Tabatha Southey reminds us that hatred and ignorance between ethnic and religious groups only tend to reinforce each other. And John Cartwright notes that there's a particular need to speak out against bigotry in the wake of an election campaign where multiple parties including the deposed government deliberately stoked it for their political advantage.

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