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Tuesday, April 21, 2015

Slippery Slope of Corporate Welfare

Posted on Tue, Apr 21, 2015 at 4:00 AM

This bitch is not aimed specifically at the film industry but at the general practice of payroll rebate. The problem with this practice is that once you offer it to one industry that is portable (could easily move to another province or country) then more and more companies start to see it as a way of making extra profit. They start blackmailing governments with threats of moving jobs in manufacturing, production, financial services, etc, to other jurisdictions. The governments usually feel they have no choice but to give in to this. The net effect over time is that we now have two classes of workers -those who contribute to the tax base and those who effectively contribute little or nothing because their taxes are refunded to their employer. The problem with this is that the latter group still uses health care, education and all other government services but is now not paying their share of the cost. Those costs get shifted to the remaining taxpayers - those in non-exportable jobs such as the service industry. The only answer is for provincial governments (and states as well) to stop refunding money to established companies and highly profitable industries. Otherwise, I fear we are on a slippery slope to greatly reduced health care, education and other services as the effective taxpayer base dwindles - all to the profit of corporations. —Not drinking the kool-aid.

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