This week the election campaign delivered another manufactured controversy in which Canadians will take no interest: should the level of corporate taxes be 15%, or 18%?
The three-point tempest between Conservatives and Liberals has brought forth the tired, predictable outcome it always does. Jim Stanford, an economist in the employ of the Canadian Auto Workers, states that tax cuts to corporations have resulted in declines in investment and that in any case “there are better ways of creating jobs. If you want bang for the buck, investment in training, education and in helping households and companies green their operations will lead to more jobs.” The article from which this quotation is excerpted helpfully informs the reader that Mr. Standford is a “so-called left-wing economist.”
I do hate to sound like a vulgar Marxist, but of course a Canadian Auto Workers economist would argue this. Let’s continue on that track. When next Jack Mintz of the C.D. Howe Institute is summoned forth to differ, Julian Beltrame (of Canadian Press) fails to produce the necessary appositional phrase “so-called corporate mouthpiece” — but such Mr. Mintz is. The C.D. Howe Institute is funded by and speaks on the behalf of banking, oil, finance and manufacturing industries. Everything published by this outfit is both a foregone conclusion and an elaborate punch line.
Here is the set-up: the past and present staff of C.D. Howe who labour in service of the free market and who champion private enterprise all work in the public sector. Jack Mintz, Bill Robson, Richard Lipsey, David Laidler, John Richards and William Watson are, to a man, university professors. The closest most of them have ever come to the private sector are their editorial jobs. For instance, William Watson (since 1977 a professor at McGill) has a pulpit at the National Post from which to preach the religion. Nothing wrong with that. But I do wonder: if their ideas are so great, why does this august collective arrange their personal affairs precisely so that they never have to be governed by them? Perhaps one clue by way of answering this riddle is Clarence Decatur Howe himself, the Minister of Everything. He was a bottom-line sort of fellow, focused on the result and not much interested in the niceties of debate over the policies that might get him there.
Few people care whether the corporate tax rate is ten or twenty or thirty percent or forty percent. In the United States it is thirty-five, but the number itself means nothing, and everyone knows it. (Both Canada and the United States have a built-in bias against earned income — wages and salaries — and a tax regime that favours dividends and capital gains: in other words, as Leona Helmsley said, taxes are for the little people. Don’t wait for the Liberals or the Conservatives to open that topic.) Canadians I suppose have absorbed the Newtonian superstition that any action upon corporate taxes will result in an equal and opposite reaction upon jobs. If it were indeed the case however that a tax cut = a job created, everyone would be working at General Electric, and Jeffrey Immelt could be relieved of his Chairmanship of the Council on Jobs and Competitiveness. A good idea, but that’s for another election campaign.