Most of us have a friend or relative who works as a teacher, a nurse, a building inspector or a law officer. Their salaries are paid from tax revenues – taxes we all pay. They use their earnings to buy houses, cars, groceries and services from other Albertans. In doing so, our tax money gets recycled further into the economy.
If one is to believe the chorus of protest carefully orchestrated by extreme right wing groups and “think tanks” like the Fraser Institute, that’s somehow bad. Because their argument is that taxes kill jobs. It’s an argument that resonates among those who let others do their thinking for them, but it doesn’t stand up to honest scrutiny.
Taxes don’t kill jobs: they create jobs. And the people with those jobs live in Alberta, spend most of their earnings in Alberta, and in so doing support more jobs. Those taxes, in short, make it possible for our neighbours to have jobs and our economy to function even during down times.
Well-funded corporate advocacy groups would have us believe differently. In fomenting opposition to taxes, these groups aren’t working for us. They are working for the shareholders of large corporations. For that special-interest group –one that doesn’t include most Albertan families – taxes, regulations and wages are simply overhead costs that reduce profits. Investors want to maximize profit. That’s what motivates them and their minions to try persuading us that taxes are simply bad.
Of course, shareholders in those corporations ultimately spend their dividend income and, in so doing, help other people have jobs. But most shareholders don’t live in Alberta. Their spending may create jobs, but those jobs are somewhere else.
Which brings us to the current outrage over Alberta’s carbon tax. Even though those least able to pay extra for the carbon they burn will get rebates under the Alberta plan, we hear continually from the Wild Rose and anti-government lobbyists that the carbon tax will kill our economy. At a recent protest rally organized by Ezra Levant’s organization, one protester was quoted saying that if he had a job he wouldn’t have been at the protest.
But his job was not killed by a carbon tax – it isn’t even in effect yet. What killed jobs in the oil patch was the decision of Saudi Arabian oil producers to flood the market with cheap oil. The same thing happens periodically in the forestry sector: when mills close it’s not because of taxes or regulations. It’s because global markets start demanding cheaper wood products than Alberta can produce. When the beef industry hits the wall it’s not because of taxes; it’s because of factors like mad cow disease or trade barriers that drive down the price of beef.
More often than not, it’s the marketplace that these anti-tax folks adore that actually kills Alberta jobs. But a lot of other jobs survive those downturns because we still need government services, education, health and regulatory compliance – services funded with tax revenues.
One of the complaints by the special interest groups fanning the anti-carbon-tax movement is that the new carbon tax won’t be revenue-neutral. In other words, it won’t be balanced by reductions in other taxes. But that’s a red herring argument, because it starts with the assumption that taxes are inherently bad. Wrong. Taxes are how we citizens finance the work of the governments we elect. If taxes are bad, then so is voting.
Carbon taxes won’t be balanced by other tax reductions, but the revenues won’t go into a black box either: they will go to jobs for Albertans building our next economy. And unlike jobs resulting from those who want us to swap Alberta tax revenues for higher dividend profits in faraway places, those jobs will be in Alberta. Exactly where we need them.
