Jim Sinclair, president, B.C. Federation of Labour
The tax-cut debate is creeping back into the public realm - creeping because tax cuts haven't lived up to the hype that precedes them.
George Bush Sr. had the best assessment. He described Ronald Reagan's tax-cut agenda as "voodoo economics." The voodoo for Mr. Bush was Mr. Reagan's claim that somehow tax cuts would pay for themselves. Mr. Bush, and many more in the economics community, had a hard time with Mr. Reagan's math. For a fiscal conservative like Mr. Bush, something had to give to pay for tax cuts, and that something was public services.
Fast forward to B.C. at the start of this decade and we had a repeat of Mr. Reagan's faulty math. Premier Gordon Campbell said tax cuts would pay for themselves. What he didn't add was that the fiscal hole left by the cuts would be offset by fewer public services.
Of course, proponents argue that tax cuts spur the economy, but looking at B.C.'s economic track record, you're hard pressed to find proof. From 2001 to 2009, B.C.'s economy grew an average of 2.71 per cent a year. A decade earlier, when tax cuts were not the sacred cow as they are with Mr. Campbell, the annual growth rate averaged 2.73 per cent. However, the current decade's tax cuts came with a hefty price tag: closed schools, massive cuts to public services, layoffs and a growing disparity between rich and poor (no surprise there, considering who got the lion's share of the tax cuts: B.C.'s wealthiest).
What makes B.C.'s economy grow? Not tax cuts. It's the talent, skills and opportunity we create for our kids through education, the public transportation systems we build to improve mobility for goods and people and the health system that supports the well-being of our citizens so they enjoy a long and productive life in B.C.
If B.C. has a choice to make between tax cuts or improving public services, my vote goes to services. Mr. Bush was right: Tax cuts don't add up for people or the economy.
Jim Sinclair is president of the B.C. Federation of Labour