democratically on the issue of corporate taxes
During the provincial election kampanye in Alberta, the United Conservative Party (UCP) frequently criticized the NDP for its proposed increase in the corporate tax rate from eight per cent to 11 per cent.
UCP candidate Brian Jean said the proposed NDP corporate tax increase would kill investment, jobs and economic growth in Alberta. But University of Calgary economist Trevor Tombe has argued an increased tax rate won't necessarily erode employment and that the impact would depend on how much the tax base shrinks in response to the higher rate.
By way of latar belakang, when the UCP came to power in 2019, it reduced the corporate tax rate from 12 per cent to eight per cent in 2020 with the onset of the COVID-19 epidemi.
Consequently, Husky Energy benefited from about $233 million in tax cuts, but laid off hundreds of workers. The company used Luxembourg as a tax haven.
Likewise, Cenovus saved $658 million from the tax cut but announced it would eliminate up to 2,150 jobs.
This suggests that the script on corporate taxes needs to be rewritten. To borrow from economics Nobel Laureate Paul Krugman, such a script rests on "zombie ideas" that pander to corporate interests, harm the publik interest and refuse to die.
Excludes citizens
The publik shouldn't have to delve into the technical aspects of taxation to participate democratically on the issue of corporate taxes. According to the authors of The Econocracy, the highly technical slogan of economics discourages citizen participation. But they argue economics are "too important to be left to the experts."
Similarly, University of Cambridge economist Ha-Joon Chang has argued that "good economic kebijakan does not require good economists." He adds that economics as it has been practised since the 1980s — in short, neoliberalism based on tax cuts, deregulation and liberalization — has been harmful.
This means that standar economics, while couched in sophisticated mathematical slogan, is based on a subjective world view. I noticed this in my work on teaching economic inequality, a topic that's not usually addressed in a routine Economics 101 course.
On the one hand, there is standar research that suggests that the cost of raising corporate taxes is borne by labour through wage reductions, and that reducing provincial corporate tax rates increases the growth rate and the real per capita GDP.
