We all would like to pay less taxes. As much as I understand that taxes are a necessary thing, I’m eager to legitimately pay less.
But tax cuts are not free which made this editorial cartoon funny to me. Aside from confusing who is Tweedletax and Tweedlespend (I had thought the Liberals were the spenders and the NDP were the taxers but the labeling has it reversed), the implication is that they are either taxing us or spending our money but Harper with his tax cuts is not doing that. But tax cuts are a form of spending. For me, that’s the punch line, the one that folks who would post that cartoon in support of Harper just don’t get.
Not only are tax cuts a form of spending, they aren’t very effective at spending the way you want unless carefully constructed.
But first, tax cuts as spending. To use a simple system, let’s suppose our revenue is 1000 and we spend 600. That would leave a surplus of 400. If we increase our spending by 100, our surplus becomes 300. Instead, if we cut taxes thus reducing our revenue by 100, our surplus also becomes 300. It is a simplistic system but it should illustrate how tax cuts are a form of spending.
Over the past few decades, we’ve had certain political parties tell us that tax cuts to the wealthy, that somehow taking my taxes and giving it to wealthy people, is good for the economy. With Harper’s current tax cuts, he is pretty much trying to buy our votes by giving more money to the wealthy. Yep, when you say it that way it makes no sense at all.
Trickle down economics is the idea that spending money on those who already have money will result in trickle down economic benefits. Those with money will spend the extra money they get and create jobs. How a political party with that plank in its platform didn’t get jeered off the stage is beyond me. Oh, that’s right, the electorate were promised tax cuts. It doesn’t take much to distract the electorate.
Of course, with the government spending so much money on the wealthy and large corporations, there is less money to spend on the things that we expect the government to do. The solution, of course, is austerity. Governments cut back on services to balance the budget. We see this with the Harper Government in the billions sucked out of departments that provide the services we expect from the government. That surplus reported by them had to come from somewhere. If it didn’t come from revenue (taxes) then it came from spending (services). The more they give to the wealthy, the less there is for everybody else.
Generally, tax cuts aren’t a good method to spend our money. A general tax cuts favours those with more money. For example, a 10% cut across the board will mean that someone who is making very little and is likely not paying much in taxes now might not get enough savings to buy a cup of coffee. Whereas, someone who is already paying loads in taxes will save enough to pay several months of my rent. Also, if there are no conditions on the tax cuts, the government can’t predict how the money will be spent. Will it get spent in Canada or will it get moved out of Canada? I kind of suspect that Harper doesn’t really care, as long as his friends are taken care of.