Saturday, April 26, 2008

Tax Cuts for the Rich

Here we go again.

As if we haven't been over this point more than enough times, let's hammer it home one more time.

A report last month from the Organization for Economic Co-operation and Development showing Canada to be one of a minority of OECD countries where tax cuts and other fiscal policies have primarily favoured upper income groups doesn't shore up the notion that inequality is a passing happenstance. Moreover, the fact that inequality and poverty have grown during booming economic growth when a rising tide was thought to lift all boats raises the question of what will happen when or if the economy slips into recession.

Remember the "trickle-down effect"? It's the completely unfounded idea that giving massive tax cuts to wealthy people and corporations will somehow, eventually, improve the quality of life of everyone. Have we seen enough evidence to discard this self-serving theory invented by wealthy economists to rationalize their greed?

If you want to fix inequality, you fix it directly. You tax wealthy people on the basis that they depend for their wealth on lots of poor people getting free education and health care. You directly "float all boats" by lifting the water level. This is the only method that has ever been shown to work.

But as long as the op-ed pages are run by wealthy people who hire wealthy economists, we will continue to hear about the benefits of free trade - basically repeated diatribes that third world workers in horrid conditions somehow aren't dragging down our labour standards and wages, as if somehow the laws of competition can't reach across an ocean or a border to force us to work in lousier conditions.

Eventually, it will get bad enough that we'll force our governments to stop it. But first look for a severe recession before people care enough to learn how the world really works.

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