I can't emphasize this stuff enough
Broader tax cuts are much better for economic growth than targeted tax points or subsidies. There, I said it. Why? Because the former benefits everyone fairly, both corporations and individuals alike, while the latter is marred by political interference.
Moreover, expecting the government to micmic or replace the judgement of the free market is fundamentally flawed. In the end, it comes down to bureaucrats and politicians with no experience in private investment picking winners and losers. And as the saying goes, "loser are very good at picking the government". Furthermore, it is common knowledge that both federal and provincial government's attempt to mask spending (subsidies or grants) in the form of a tax cut. Let Janet from Liberty is Good explain the difference:
A tax cut (or tax relief) has been put in place when, after implementation, Canadians are able to keep more of their money. The government never touches the money and has absolutely no say in how Canadians spend it.This is an interesting point by Janet because many so-called experts like to claim that tax cuts don't work, when in retrospect, what they deem a tax cut is not a tax cut at all. (but "targeted" subsidization) And it's in this type of economic climate where uneven playing fields are created. Playing fields where corporations hold all levels of government hostage for more of our hard earned tax dollars.
Spending is when the government collects the money of hard-working Canadians and then redistributes it as it sees fit. Any money that goes through the government before being returned to the Canadians from whom it was wrested is spending, and in no way constitutes tax relief. It is spending even if it is done through the tax system, and especially if the money is returned only to groups arbitrarily specified by the government.
The former shows respect for Canadians by allowing them to make their own decisions with their money. The latter is nothing more than forced subsidization of the lifestyles and values the government wants Canadians to live at the expense of the lifestyles and values Canadians espouse for themselves.
And what is even worse is that credit and capital are diverted from successful firms to less successful, politically connected firms, not to mention, firms who are not at the receiving end of government subsidies end up supporting their government supported competitors through their corporate taxes. A huge factor in why so many small businesses go under here in New Brunswick. (the playing is too uneven as they have to pay for the handouts given to declining industries and politically friendly firms)
So to say that tax cuts don't imporove economic conditions is ludicrous, especially since the individuals making these claims don't even know the difference between spending and tax cuts or corporate subsidies and fair taxation. Let's just say, when it comes down to the crunch, I'll choose broader tax relief over targeted tax cuts every time.
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