Nothead's government is the destructive anywhere in Canada by a long shot, but Ottawa is pretty stupid too.
We are living in an age of economically clueless governments, both federally and provincially.
The best recent example came last week in Calgary.
It’s Stampede Week in the Cowtown. That means a steady stream of politicians from all levels of government passing through to flip pancakes and shake hands.
One of the flippers and shakers was Bardish Chagger, Ottawa’s Minister of Small Business and Tourism.
Predictably, the 36-year-old southwestern Ontario Liberal was asked about her government’s failure to live up to its campaign promise of last year to lower the tax rate on small business from 11% to 9%.
Her answer demonstrated just how economically clueless the Trudeau government is.
“We ran on a platform and we’re committed to that platform,” Chagger insisted.
But spending priorities, she said – including spending on economic stimulus – has to come before tax cuts.
“In speaking to entrepreneurs,” the minister added, “I’ll ask them do you want a tax cut or do you want more revenue in your business? Any day they’ll pick more revenue. If we can actually grow this economy, the possibilities are endless.”
And that’s where the cluelessness kicks in.
First, cutting taxes IS a way to increase revenue in a business. Indeed, it is the simplest and most direct way.
If governments take less of a business’ revenues through taxes, it immediately increases the revenue in that business.
Second, believing that government needs to grow an economy before businesses can benefit – that government is better than entrepreneurs at growing the economy – is politically delusional. And arrogant.
For governments to get more revenue into businesses by keeping taxes high and through stimulus spending – rather than through tax cuts – requires more bureaucracy.
It requires government to take money, administer that money, decide which projects get the money, monitor how the money is used and hope (against hope) the money somehow gets something as huge as the Canadian economy moving.
It is a clear indication politicians believe they and their bureaucrats know better than businesswomen and men how to grow businesses.
It is also the ultimate in trickle-down economics.
Among lefties and liberals, the Ronald Reagan-era concept of tickle-down economics (create the conditions for businesses to boom and everyone, including workers, will benefit) is scoffed at as unfair and foolish.
But it is less foolish than the notion, promoted by Chagger and most other lib-left politicians, that governments can use higher taxes to pump up the economy, which will eventually trickle down more revenues to small businesses and families.
The best thing governments can do is get out of entrepreneurs’ way and watch the economy mushroom.
But Chagger isn’t alone in her cluelessness.The Alberta NDP government of Premier Rachel Notley has made dozens of similar statements.
My favourite was the premier’s insistence last November that her upcoming, $3-billion-a-year carbon tax would be “revenue neutral". Really!? She was going to cut $3 billion in other taxes while imposing her new carbon “levy”?
No. Notley actually thought a tax was revenue neutral if the government collecting it spent all the money as soon as it came in.
By that clueless understanding, nearly all taxes are revenue neutral.
Since coming to office 14 months ago the Alberta NDP have ramped up taxes (with much, MUCH more ramping to come).
Plus, seemingly every day, or every other day, they have made an announcement of tens of millions (even billions) of dollars they will be spending on some new stimulus package.
This is akin to encouraging a bird to fly by placing a huge weight (taxes) on its tail, then blowing a weak fan (stimulus) in its face.http://www.edmontonsun.com/2016/07/16/o ... ng-economy