EDMONTON, Alberta, May 13, 2019 (GLOBE NEWSWIRE) -- The Alberta Federation of Labour disagrees that Kenney’s “trickle-down” economic tax cut for profitable corporations will create jobs or stimulate investment in Alberta. Kenney announced in a news conference today that the UCP government will schedule a corporate tax cut effective July 1, 2019 and another January 1, 2020.
“Right-wingers have been saying for years that tax breaks for their wealthy friends will lead to higher investment, higher wages and higher growth,” said Gil McGowan, president of the Alberta Federation of Labour.
“But this has literally never happened anywhere. This approach has been called trickle-down economics. But it should really be called snake-oil economics. It’s a false cure that makes the patient sicker, not healthier.”
Corporations get to keep more money, but there’s no requirement that they spend it on investment or job creation, and the evidence from around the world shows they rarely do.
A Canadian Centre for Policy Alternatives study found no evidence in data from 1961-2010 that lower taxes directly stimulate more investment. Reducing corporate tax does less to stimulate the economy then pumping the amount of the tax reduction into the economy directly.
And calling this tax cut a “job creation” tax cut is also incorrect.
According to a survey by the National Association for Business Economics, eighty-four per cent of businesses said they didn’t accelerate hiring because of the 2017 Tax Cuts and Jobs Act, which President Donald Trump hailed as “a bill for the middle class and a bill for jobs.”
If the government is really serious about balancing the budget by the end of its term, it makes no sense to be giving away billions in revenue to profitable corporations. The move means that Albertans will be paying for the tax cuts in the form of big cuts to education, health care and other services.
The UCP budget plan outlined in their platform projects that Alberta will have a debt of $86 billion at the end of the UCP’s four-year term of office — only slightly less than what would have been the case if the Notley NDP had been re-elected. The difference is that the NDP debt would have been used to finance education, health care, infrastructure and other programs and services designed to actually help people; whereas the UCP will be using debt to finance massive giveaways to profitable corporations.
The corporate tax announcement comes two days after the UCP quietly made it clear to public sector workers that it plans to use the power of the legislature to break contracts with and impose unilateral wage rollbacks: “If there was any doubt whose side Jason Kenney is on; it has now been removed. He’s definitely working for someone, but it’s not ordinary working Albertans. He’s delivering on the wish list of the wealthy business elites that helped pave his way to the Premier’s chair,” said McGowan.
For further information, please contact:
Ramona Franson, Director of Communications
780-483-3021 or rfranson@afl.org