Tuesday, January 18, 2022

Tax cuts are getting old as a policy idea

This is Joseph. 

It has been more than 40 years since the California Tax revolt and Ronald Reagan in the United States. I was young in the 1980's and there was a certain interest in the question of whether high tax rates might interfere with economic activity. 

So in 2022, in Manitoba, just after a pandemic and with the health care system overstrained, you get this question in EngageMB:


Please note the lack of options in this questionnaire for options like "raise taxes" to handle medical care costs and/or infrastructure

Now I am not going to question that cutting taxes seems like a good plan as a taxpayer. But remember that this is only one side of the questions. I would also like lower prices at the local McDonalds restaurant but dropping prices requires trade-offs. This late into the tax cut idea set, the easy cuts have long been made and what is left is either service degradation (keep in mind these are things like roads) or improving efficiency. 

I would get behind a plan to improve efficiency (first) and then cut taxes (second) but the reverse is doing the easy part first. But a straight "just cut taxes" plan is old hat and the opposite of a dynamic and creative political message. 

1 comment:

  1. Commissioned by the Canadian Taxpayers Federation by any chance?


    Now I am not going to question that cutting taxes seems like a good plan as a taxpayer.


    Sounds great for two seconds until you realize it means cuts to public services like snow removal or road maintenance or (gasp) healthcare.

    I have never been wildly pleased to pay taxes but I don't complain---I realize I need to help pay for decent public services.

    Having watched Reagan's "trickle down" economics and the recent Kansas fiasco maybe I should be asking Doug Ford to raise taxes. ?s

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