The politically-independent Canadian Centre for Policy Alternatives (CCPA) has just released a major study that should forever put to rest the right-wing lie that corporate tax cuts – and, by implication, tax cuts for the wealthy – promote job-creating economic investment.
In fact, the exact opposite is true: That corporate tax cuts and tax cuts for the wealthy actually reduce potential job-creating economic investment while robbing governments of money desperately needed to finance programs that benefit the masses – the poor, the working class and the middle class – such as health care, education and social programs.
As much as right-wingers (the Conservatives in Canada and the Republican Tea Party in the U.S.) and so-called “centrists” or “liberals” (the Liberals in Canada and the Democrats in the U.S.) might try to peddle mendacious claims about the “social benefits” of tax cuts for corporations and the wealthy, the simple reality is that they serve no real purpose other than to transfer income from the masses – the poor, the working class and the middle class – to the socioeconomic elite – the top one percent who already own almost everything worth owning.
While the CCPA study only examined Canadian data, the public policies now in effect in the U.S. dictate that a similar study in Amerikkka would produce even worse results.
What exactly did that study find?
It found that between 1980 and 2010 – the 30 years of NeoLiberal/NeoConservative ascendancy in North America – despite a never-ending series of corporate tax cuts, job-creating corporate investment declined steadily from 12.8 percent of Canada’s GDP (Gross Domestic Product) to just 11.8 percent.
The reality is quite similar in the U.S. and the reality with tax cuts for the wealthy is also quite similar.
In effect, North American governments have been lavishing $10 in tax cuts on corporations for every $1 they invest. And the same pattern holds true for wealthy individuals.
Why are our governments giving $10 to corporations and the wealthy for every $1 they invest in job-creating endeavours?
The logical thing to do would be to return tax rates for corporations and the wealthy to at least the levels of 1980 and have our governments invest all of that corporate tax revenue in job-creating economic endeavours.
Right-wing zealots and others who hew to the corporate capitalist agenda would, of course, raise a hew and cry and become all agitated at the prospect of governments being active participants in the productive economy.
But there is no logical reason why governments should not be full and active participants in all areas of the economy – including as active investors.
As for those who claim governments can’t operate business effectively and efficiently, consider this: Private-sector ownership bankrupted General Motors; public-sector ownership rescued it.
The only differences between companies owned by the public sector and those owned by the private sector is that wage inequality is much higher in the private sector and, in the private sector, a corporation has to produce a lofty profit to keep happy the billionaires and mega-millionaires who control it.
Let’s kill all those Canadian and U.S. tax cuts that have been lavished upon the banks and the corporations and the wealthy for the past 30 years and turn that windfall into productive, job-creating public equity.