Friday Morning Links

Assorted content to end your week.

- Joseph Stiglitz offers a reminder that tax giveaways to the rich and the corporate sector accomplish zero - or worse - when it comes to economic development:

If corporate tax reform happens at all, it will be a hodge-podge brokered behind closed doors. More likely is a token across-the-board tax cut: the losers will be future generations, out-lobbied by today’s avaricious moguls, the greediest of whom include those who owe their fortunes to scummy activities, like gambling.

The sordidness of all of this will be sugarcoated with the hoary claim that lower tax rates will spur growth. There is simply no theoretical or empirical basis for this, especially in countries like the US, where most investment (at the margin) is financed by debt and interest is tax deductible. The marginal return and marginal cost are reduced proportionately, leaving investment largely unchanged. In fact, a closer look, taking into account accelerated depreciation and the effects on risk sharing, shows that lowering the tax rate likely reduces investment. 

Small countries are the sole exception, because they can pursue beggar-thy-neighbor policies aimed at poaching corporations from their neighbors. But global growth is largely unchanged – the distributive effects actually impede it slightly – as one gains at the expense of the other. (And this assumes that the other does not respond and fuel a race to the bottom.) 

In a country with so many problems – especially inequality – tax cuts for rich corporations will not solve any of them. This is a lesson for all countries contemplating corporate tax breaks – even those without the misfortune of being led by a callow, craven plutocrat.

- Meanwhile, George Monbiot points out how trade deals too are leaving us worse off even in terms of raw economic outcomes. And Michael Brune and Leo Gerard write about the popular demand for trade rules and other policy choices which aren't biased toward corporate interests.

- Melinda Anderson discusses how the myth of meritocracy can lead poorer children to lash out and give up. And Dawn Foster wonders why there isn't more outcry over the reality of children needlessly going hungry.

- Finally, Andrew Longhurst offers some suggestions for B.C.'s new NDP government to improve citizens' health. And Jordan Press reports on a new IMF study showing that an $8 billion annual investment in a national Canadian child care program would pay for itself.