NDP Leader Carole James should acknowledge the impact of personal tax cuts for the rich
Georgia Straight
By Charlie Smith
September 26, 2010

…. This weekend, NDP Leader Carole James sent out another moderate message at a party fundraiser….

She talked about promoting wealth creation, a competitive tax environment, and targeted investments.

She also mentioned her desire to reduce child poverty and provide more secure housing. But it's hard to see how this can occur without her reversing some of the B.C. Liberal government's tax cuts.

In November 2009, the B.C. Federation of Labour published a report on the public sector by economist Iglika Ivanova and public-policy researcher Will McMartin.

It showed that in the early 1980s, B.C. government expenditures were responsible for approximately 20 percent of B.C.'s gross domestic product.

That has fallen to about 15 percent today in this era of contracting out and privatization.

Ivanova and McMartin noted in their report that B.C. Liberal personal-income tax cuts have reduced provincial revenue by $2 billion per year. Corporate tax cuts have shaved another $1.5 billion per year in revenue.

"After cutting taxes, the Liberals responded by increasing other taxes (like MSP premiums) and lifting the freeze on post-secondary tuition," they stated in the executive summary. "But, that was not enough to get the province out of deficit. They also began sweeping cuts in public spending which scaled back or dismantled social programs at an enormous social cost."

The results of these policies are fairly obvious in B.C.'s rising number of homeless during the Campbell era. There's also a connection between the tax cuts and B.C. leading the country in child poverty every year.

Meanwhile, a new Canadian book has challenged the notion that personal-income tax cuts for the wealthy stimulate economic growth.

In The Trouble with Billionaires (Viking Canada), authors Linda McQuaig and Neil Brooks (a professor of tax law at Osgoode Hall) write that it is "almost an article of faith among conservative economics and commentators that anything which diminishes the size of the financial rewards for society's most talented members—such as high taxes—saps them of their motivation to work at full capacity, thereby impeding the overall growth of the economy"…..

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