- Joseph Stiglitz discusses how the Republican's trillion-dollar corporate giveaway will only exacerbate inequality without doing anything to help the U.S.' economy:
If inequality was a problem before, enacting the Republicans’ proposed tax reform will make it much worse.- And PressProgress examines how the Cons are trying to mislead Canadians about even the smallest steps toward tax fairness.
Corporations and businesses will be among the big beneficiaries, a bias justified on the grounds that this will stimulate the economy. But Republicans, of all people, should understand that incentives matter: it would be far better to reduce taxes for those companies that invest in America and create jobs, and increase taxes for those that don’t.After all, it is not as if America’s large corporations were starved for cash; they are sitting on a couple of trillion dollars. And the lack of investment is not because profits, either before or after tax, are too low; after-tax corporate profits as a share of GDP have almost tripled in the last 30 years.Indeed, with incremental investment largely financed by debt, and interest payments being tax-deductible, the corporate tax lowers the cost of capital and the returns to investment commensurately. Thus, neither theory nor evidence suggests that the Republicans’ proposed corporate tax giveaway will increase investment or employment.
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An alternative framework would increase revenues and boost growth. It would include real corporate-tax reform, eliminating the tricks that allow some of the world’s largest companies to pay miniscule taxes, in some cases far less than 5% of their profits, giving them an unfair advantage over small local businesses. It would establish a minimum tax and eliminate the special treatment of capital gains and dividends, compelling the very rich to pay at least the same percentage of their income in taxes as other citizens. And it would introduce a carbon tax, to help accelerate the transition to a green economy.Tax policy can also be used to shape the economy. In addition to offering benefits to those who invest, carry out research, and create jobs, higher taxes on land and real-estate speculation would redirect capital toward productivity-enhancing spending – the key to long-term improvement in living standards.An administration of plutocrats – most of whom gained their wealth from rent-seeking activities, rather than from productive entrepreneurship – could be expected to reward themselves. But the Republicans’ proposed tax reform is a bigger gift to corporations and the ultra-rich than most had anticipated. It avoids necessary reforms and would leave the country with a mountain of debt; the consequences – low investment, stalled productivity growth, and yawning inequality – would take decades to undo.
- Roderick Benns comments on the first report from Ontario's basic income pilot project, including the fact that many employed people are signing up for income support.
- Armine Yalnizyan and Chris Disdale highlight how the Temporary Foreign Worker Program was used to exploit workers willing to pay for the opportunity to live in Canada. Nicholas Keung reports on the plight of migrant workers who are still treated as "temporary" after decades of hard work. And Astra Taylor interviews Jessica Bruder about the growing number of people dealing with precarious work and lives into retirement age in the U.S.
- Finally, Paul Buchheit writes that privatization is a disaster for any hope of democratic governance over public services and institutions.
