Wednesday, January 30, 2008

Tax Cuts Over And Over Again

It happens in Canada too:

After years of convincing, governments began to act and social spending was cut, doing great damage to our health-care system and our investments in infrastructure. However, the yearly federal deficit was ultimately eliminated and we would then go on to build big yearly surpluses. Perhaps the children would be freed from the burden after all.

Of course, many people never bought into the hyperbole over the deficit and debt. They pointed to the studies that showed social spending was not the cause of the debt and that as the economy grew we could eliminate the deficit with little pain. They also said it wasn't fair that the people who had done the least to cause the debt – the poor – were going to pay the most to fight it.

And once the nation started to turn a surplus those people would have preferred that our national government use the surplus to return health and education funding to previous levels. Also in a nation with water, sewer and road systems in rapid decay, some quick investment in maintenance might also be in order.

But that side lost the battle for people's minds. We democratically decided as a nation to wrestle the deficit to the ground by cutting programs, and fully restoring spending was out of the question. After all, it was for the good of the kids.

So what happened, Canada?

Even if you don't agree with spending tax money on programs or infrastructure, why are we doing the tax cut thing? The national debt after nearly 10 years of surplus, especially if you include all levels of government, has barely been dented. Sure, the feds pay a little off the top but why isn't the entire surplus going to pay down the debt and save our children from paying for our past spending?

Market economies go up and down. We may be up now but at some point we will be down. If we don't pay down the debt when times are good we will never get it paid off and that will limit our options in the next recession.

But once the deficit was gone, Stephen Harper, Preston Manning, Jean Chrétien, Paul Martin, the Fraser Institute and the Canadian Taxpayer Federation stopped worrying about the poor children of the future and began to champion tax cuts now. And Canada has voted for tax cuts over and over again.

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