Monday, December 18, 2017

Monday Morning Links

Miscellaneous material to start your week.

- The Star's editorial board calls for a reworking of Canada's tax system to make sure businesses pay their fair share:
The tax bills of most big companies have declined significantly both as a proportion of their profits and as a proportion of Ottawa’s total tax revenue. This means that shareholders of Canadian companies, a disproportionately wealthy, often foreign group, continue to get wealthier, while the average taxpayer foots a greater portion of the bill for public expenditures and governments have less to spend on programs and services that help the many and particularly the most vulnerable.

Making matters worse, the decline of corporate contributions to the public purse is greater than even our diminished corporate tax rates would suggest. A six-month joint investigation by the Star and Corporate Knights Magazine has revealed that for every dollar corporations pay to the Canadian government, individual taxpayers now pay $3.50 - a result not only of repeated cuts, but also of a slew of tax loopholes and international treaties introduced in recent decades that promote or at least facilitate corporate tax avoidance.
The corporate tax system is just one part of the problem. While it’s true that corporate taxes are a smaller portion of the total of tax revenues after years of rate cuts, ever more loopholes, and the increasing ease of moving capital globally, that’s in a context in which the top marginal income tax rate has also gone down and overall tax revenue as a percentage of the economy has declined, putting us well below the OECD average.

As Gabriel Zucman, an economist at Stanford University, told the Star, “Some countries, including Canada, have attempted to dramatically cut taxes on the wealthy and let corporate tax avoidance prosper.” This process, begun in 1980s, has yielded a clear outcome: “income and wealth have boomed for a tiny fraction of the population, but this has not benefitted the rest of the population at all.”

The result of all of this is that governments have less revenue to do what’s needed, our tax system is less progressive and corporations pay a reduced share for our public goods and services even as their profits continue to break records.

Our tax system is a mess. It’s leaking resources government needs; it’s regressive, contributing to corrosive inequality; and it’s increasingly complicated and incoherent.

In response to the Trudeau government’s ongoing small-business tax reform fiasco, the Senate finance committee recommended that Canada undertake a comprehensive review of our tax system of the kind not seen since the Carter Commission of over 50 years ago. This is exactly what’s needed. The latest revelations about our leaky corporate tax system, on top of the bombshells of the Panama and Paradise Papers, make inescapable the unfairness and inefficiency of our tax system. The challenge won’t be met by mere tinkering.
- Matt Bruenig discusses how a social wealth fund could do far more than merely increased tax rates to ensure that everybody benefits from increased overall wealth. And Ann Pettifor notes that businesses which actually offer anything of use to people stand to benefit from policies oriented toward greater equality and social investment.

- The BBC reports on the findings of the Jo Cox commission, including the need to counteract social isolation. Darren McGarvey points out the reality of social immobility resulting from the stresses of poverty and insecurity. And Laura Kane reports on the effect of B.C.'s housing crisis which is forcing seniors into the streets.

- Meanwhile, Michael Fitzpatrick highlights how a focus on genuine social housing can lead to far more fair and functional communities.

- Finally, Grant Robertson and Tom Cardoso report on the lack of meaningful consequences for white-collar crime.

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