Oh for crying out loud! The tax cut fairy has returned to Alberta! She’s brought snake oil!
United Conservative Party Leader Jason Kenney, lately rebranded The Policy Guy ™, has promised a massive cut in business taxes to create jobs.
In Calgary yesterday, Mr. Kenney vowed to slash the lowest business taxes in the country by a third, from 12 per cent to 8 per cent. He claimed this will create 50,000 jobs.
Needless to say, his obedient UCP troops were in a rapturous state, as are the usual suspects in mainstream media. A total of 50 per cent of Alberta’s academic economists who regularly hold forth on social media on such topics also supported the would-be premier’s policy pronouncement as a good idea. The other one disagreed.
Well, I’m no economist, but I read some, and it can be pretty confidently predicted that no jobs will be created by such a policy, although there will certainly be some very happy corporate shareholders who are able to buy new and more elaborate condos in Palm Springs or wherever Alberta’s wealthy classes winter nowadays.
It can also be predicted with equal confidence that if Mr. Kenney had plans to cut the crap out of your kids’ education and your own health care, he’s going to end up having to cut out even more after the dust settles from this.
Don’t forget, Mr. Kenney has also promised to drop the Carbon Levy, so that’s another $3 billion we’ll still have to pay in taxes, except that now they’ll be taxes to Ottawa instead of an account the Government of Alberta can access. Plus he’s going to balance the budget. Right.
As economist Paul Krugman pointed out in a recent New York Times column about the claims made by the U.S. Republican Party about the supposed benefits of big tax cuts for corporations and the wealthy (which are the same as Mr. Kenney’s ideas, presumably because that’s where he gets them), they rest “on research by … well, nobody. There isn’t any body of serious work supporting GOP tax ideas, because the evidence is overwhelmingly against those ideas.”
Dr. Krugman asked: “Why do Republicans adhere to a tax theory that has no support from nonpartisan economists and is refuted by all available data?” He answered: “Well, ask who benefits from low taxes on the rich, and it’s obvious.”
It’s no different on this side of the imaginary line between our two countries, obviously.
It’s not just Dr. Krugman, of course. The Alberta Federation of Labour this morning quickly dug up some 75 articles that say the same thing – which isn’t surprising, of course, because as the winner of the Nobel Prize in Economics pointed out, it’s the prevailing view among professional economists. I imagine by now the AFL has found 75 or 100 more.
Not only is it not working in the United States under Donald Trump, but at the state level it’s failed in Kansas, in Oklahoma, in Arizona, and in Kentucky. Oh, and it failed in Saskatchewan – although, at least there, then-premier Brad Wall partly reversed course when he realized it was failing. Maybe that’s why he was the “real leader of Western Canada,” as someone used to say.
It flopped in Australia, too, just as it will fail disastrously in Alberta. Or not, depending on how you measure success. Because as this Guardian article about the Australia’s massive tax cuts explains, it’s not just a transfer of wealth to the rich from the rest of us, it’s a scam to grease the skids for even bigger transfers.
“Australia isn’t poor; it is rich beyond the imagining of anyone living in the 1970s or 80s,” wrote author Richard Denniss in the Guardian. “But so much of that new wealth has been vacuumed up by a few, and so little of that new wealth has been paid in tax, that the public has been convinced that ours is a country struggling to pay its bills.”
“Convincing Australians that our nation is poor and that our governments ‘can’t afford’ to provide the level of services they provided in the past has not just helped to lower our expectations of our public services and infrastructure, it has helped to lower our expectations of democracy itself,” Mr. Denniss continued.
This will sound very familiar to anyone who has lived in Alberta for a while. All you have to do is replace Australia with Alberta, and you have succinctly told the story of our province as long as many of us can remember, at least since Ralph Klein became premier in 1992.
It’s a con. It’s always a disaster. And it ended to a significant degree in 2015 with the election of Premier Rachel Notley and the NDP.
Mr. Kenney intends to send us right back to where we were, the richest place on earth, which we’re perpetually told is the poorest place on earth. Only this time, there will be no plan for a future that’s changing, quickly, beyond stomping our feet and blaming others for our troubles.
We’re not going to stimulate the economy by firing nurses and teachers, which is the only way Mr. Kenney’s “job creation” scheme will end. Face it, there can only be so many private hernia clinics and religious private schools teaching creation science to young citizens of a flat earth.
If we fall for this snake oil, we’re going to have to swallow it.
Green Party calls for a sales tax
It’s easy to be brave when your chances of being elected are minimal. Still, hats off to the Green Party of Alberta for speaking the unpalatable truth.
The Greens say they want a sales tax implemented “as a means of establishing predictability to budget planning in a time when the price of oil is in free-fall on the world market.”
“The move would generate revenue needed to maintain essential social services in the face of irresponsible cuts suggested by the UCP,” the party said in a news release Sunday.
“The other parties are terrified to mention a sales tax other than to denounce it, but the Green Party is not,” said Carl Svoboda, the party’s finance critic and its candidate in the Calgary-Edgemont riding. “It is time for Alberta to start acting like a normal province.”
Never mind the rules, Stephen Mandel may run, a court decides
If you grew up firm in the belief “ignorance of the law is no excuse,” you might want to reconsider that quaint notion in light of the court ruling Stephen Mandel may run for public office after all, despite having ignored Alberta’s election financing legislation by not filing his paperwork on time.
After all, Madame Justice Gaylene Kendell’s written decision yesterday concluded that the law shouldn’t be applied to the Alberta Party leader, a former Conservative cabinet minister and mayor of Edmonton, because he was acting in good faith when he broke it.
Due to the unquestionably unreasonable severity of the penalty Mr. Mandel faced – a two-election ban from running merely for having missed some paperwork – the Court of Queen’s Bench Justice’s decision may in fact be just. But it says more about the value of good connections and access to the services of an imaginative barrister than about the rule of law, of which we hear so much nowadays.
Don’t expect this principle to be applied by the courts in favour of other citizens who run afoul of harsh or unreasonable laws.
There is a good chance this ruling would be overturned if it were appealed, as it should be. An appeal, though, seems unlikely for reasons that have less to do with the law and more to do with politics. Pity.