Saturday, October 16, 2010

Debunking in progress

So apparently somebody actually thought to test the incessantly-repeated right-wing mantra that any taxes whatsoever are incompatible with economic growth. And not surprisingly, the results utterly demolish the oft-repeated canard that tax slashing does anything at all to improve economic conditions:
What is more important than the level of the tax ratio is what actually happens to the taxes and contributions. It will make a difference whether the money is invested in education, training and research or whether it goes to military intervention abroad. And it will of course make a difference in terms of economic growth whether a state is organised in an efficient manner or whether public resources are just wasted.
This study is intended to contribute to a more objective discussion on the issue of the tax ratios. There is no empirical evidence that increasing the tax ratio would hinder economic growth, and claiming such a thing over and over again is not helpful at all. It would be more sensible to ask the following questions: How are the taxes and contributions used? Are they administrated in an efficient manner? Are they used on purposes that generate growth? These factors are much more relevant for growth than the tax ratio as such.
But of course, we shouldn't kid ourselves into thinking that mere facts will turn the tide.

Indeed, just today Bruce Johnstone - in the face of an equally obvious lack of evidence - is parroting the Saskatchewan Chamber of Commerce's corporate giveaway message without paying the slightest bit of attention to whether and how tax rates actually affect "competitiveness". And it'll take a concerted effort to point out that the demands for corporate and upper-class tax cuts are aimed solely at elite self-interest rather than any positive economic effect in order to focus attention on the priorities that actually deserve it.

No comments:

Post a Comment