Q: The NDP talks about bringing in measures to make Canada’s largest corporations “start paying something resembling their fair share,” as Tom Mulcair put it during the Globe and Mail debate on the economy. Can you comment on this idea of the largest corporations paying “their fair share”?
A: The adjective “fair” is subjective and should not be used in economic science. Corporate income tax on declared net profit or income is not a modern method to raise public revenue, neither is individual taxation. The large corporations employ scores of tax accountants to find loopholes to drive down their income tax. Assessing the tax on net income allows corporations to fix their accounts in their favour, especially given the fact that company accounts are normally considered private unless a tax audit is ordered.
The revenue government requires and demands from the economy should be determined by the people according to the social, political, and economic needs of society, its state institutions and people. Once the needs of society, its economy, institutions and people are determined, the next issue is to claim the necessary revenue from the economy to meet those needs.
Canada’s socialized economy should be the sole source of revenue for the government. A broad discussion should take place amongst the polity as to how government should claim its revenue. The present method using mostly individual taxation is capital-centred and outdated, and serves a rich privileged elite and their narrow private interests. The MLPC suggests a modern human-centred approach where government claims revenue directly from the economy and not the people. This approach would serve the broad public interest and nation-building.
To claim revenue directly from the economy, the best method is through government ownership and control of public enterprise. Through public ownership and control of parts of the economy, the government claims the entire realized added-value from its public enterprises. Historically, this has been an effective method for raising government revenue albeit never fully utilized. Public utilities, Canada Post, the now-privatized Canadian National Railway and Air Canada, wholesale and retail sale of alcohol, and public education and health care are examples of public enterprise but all have been under attack from narrow private interests that either want to claim the realized added-value from public enterprise for themselves or refuse to realize (pay for) publicly produced material and social value such as educated and healthy workers and public infrastructure. To develop and sustain a human-centred method to claim the necessary public revenue, the neo-liberal privatization and pay the rich agenda of the cartel political parties must be defeated.
Another method to claim public revenue from the economy is directly from the added-value workers produce at the enterprises where they work. This would require a public authority to scrutinize the accounts of all corporations. If government is serious about raising revenue to meet the needs of the people, economy and society, it requires the authority to examine the accounts of all parts of the economy to determine a public claim on the added-value workers produce. This public authority has to extend to the wholesale sector, as this touches on the crucial issue of determining prices and the flow of social wealth into and out of the country.
Canada needs a growing, vibrant and stable public enterprise sector, and a public authority to claim revenue directly from enterprises and to enforce all this entails, including the determination of prices in the wholesale sector. Subjective talk of large corporations paying “their fair share“ is a diversion from the necessary practical politics of a pro-social program to restrict monopoly right and uphold public right.