Saturday Morning Links

Assorted content for your weekend reading.

- Alex Himelfarb warns about the dangers of participating in Donald Trump's race to the bottom for public revenues - and the importance of highlighting the value of collective funding for social priorities:

Sure, our tax revenues as a share of the overall economy are lower than they’ve been in over five decades. Yes, government expenditures are lower than they have been since the days before we had public pensions, medicare and mass education. But more tax cuts are still offered up as the best—or even the only—option.

The failure of decades of tax-cutting to yield the promised increases in innovation and productivity has not constrained the willingness of some political parties and governments to treat ever-deeper cuts, especially for businesses and the rich, as indisputably good economic policy. If past cuts didn’t have quite the effect they were meant to, they say, perhaps the cuts just weren’t deep enough. Failed economic ideas don’t die easily.

Clearly, Canadian politicians cannot ignore the implications of tax cuts or other major economic policy changes in the United States. But they would be wise to ask what our neighbour may be giving up with these latest cuts, and where our comparative advantage might really lie. We oughtn’t to assume the benefits of tax cuts or to ignore their costs.
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Tax cuts never pay for themselves. Invariably, they have real costs: public services are squeezed and opportunities to improve government programs lost, with the consequences falling most heavily on the most disadvantaged and vulnerable, and on future generations who of course don’t get to vote.

Ironically, as we weaken government and undermine public services, as wait times go up while access goes down and out-of-pocket costs rise, we increasingly question just what our taxes are buying. Austerity is self-perpetuating.
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 Decades of austerity, during which we have been asked to view ourselves as primarily taxpayers and consumers rather than as citizens pursuing some common good, have no doubt reshaped our collective view of taxes. So long as taxes are viewed as a burden, or worse, a punishment, rather than as how we operationalize the common good, austerity will continue to blunt the political imagination and limit our sense of what’s possible.

Sociologist Zygmunt Bauman, who died just over a year ago, spent the latter part of his career documenting the decline of the collective, the loss of trust in one another and in our governments, the loss of confidence that we can together shape the future. He worried that our collective action problems—those things we can solve only together—have never been more challenging, but that our collective toolkit has been severely weakened by decades of austerity. Rethinking taxes, which are, after all, how we pay for those things we do together because we could never do them at all or as well on our own, will be essential to rebuilding the collective.

We cannot hope even to begin to achieve a just transition to a green economy, or to provide a measure of economic security in an increasingly precarious world, or to reverse growing inequality and persistent poverty if we don’t reconnect taxes to the common good.

- Frances Coppola challenges the mindset that would sacrifice human well-being in the pursuit of balanced government budgets. And Mathew Snow writes about the problems with reliance on the charity of the obscenely wealthy rather than a fair system of social revenue.

- Sophie Hardach examines Thomas Piketty's latest work on the reversal in political orientation based on education. And Branko Milanovic discusses the ongoing (and indeed increasing) relevance of Karl Marx' analysis of capitalism.

- Andrew Nikiforuk observes that government revenues from fossil fuels and other natural resources have been drying up over a period of decades. Stephen Leahy estimates the climate costs of a Trans Mountain expansion at $8.7 billion - without factoring in the added emissions from the end use of any fuel shipped through the pipeline. And Tom Rand notes that the Trans Mountain debate is highlighting the need for everybody to contribute to emission reductions, rather than demanding special dispensations based on the ongoing choice to prioritize oil over other economic options.

- Finally, Edgardo Sepulveda studies the public costs of decades of privatization and politicization of Ontario's power system.