Real tax reform will benefit real people
There has been a fair amount of news coverage regarding tax reform in the United States, and also here in Canada. Justin Trudeau has been criticized for wanting to tax some folks at a higher rate; and this is drawing the ire of doctors, lawyers, shop owners and other incorporated small business owners. These are people who are middle class and upper middle class. It is not clear if the super wealthy will be paying their fair share. To the south of us, Donald Trump is drawing attention with his plan which would give tax relief to the very wealthy... especially those with ownership in large corporations.
According to Trump’s thinking, a tax break for the wealthy would result in more money invested in their companies so that more jobs can be created.
The more likely occurrence would be that the well-heeled owners would simply pocket the funds, resulting in more wealth — and power.
There are a number of ways in which the wealthy – particularly those who have ownership in corporations — can assert their influence. A recently published book, Academia, Inc., by Jamie Brownlee points to the changing influence large Corporations are having on universities, including those across Canada. These organizations are significant contributors to academia.
This is not a new situation. In fact, donations from the market place have gone to universities since the early 20th century. However, since the 1970’s the amount of corporate funding has increased big time, and universities have become centres of training...as well as centres for research for the benefit of the corporate world. From the 1970’s to the early 1990’s both the Liberal and Conservative governments were responsible for reduced public monetary commitment to post-secondary education.
As noted by Brownlee, the billions cut by the Conservatives under Brian Mulroney was especially noteworthy. Between 1983-84 and 1994-95, the federal contribution to post-secondary education was reduced by nearly $13.5 billion (Tudiver 1999). In the 1970’s and 1980’s grants to full-time students were reduced by an average of more than 20 percent nationwide, and tuition costs have increased. At the present time the universities across Canada are competing for corporate dollars.
The funding by corporations has come at a cost. With this reliance on corporate funding there has been a shift in research. In other words, much of the focus of research has been chosen for those who do the research. Market-based educational programs has resulted in less funding for liberal arts based disciplines. According to Brownlee the Social Sciences and Humanities programs have been particularly hard hit.
I am not a tax expert. In all likelihood, there are significant tax breaks for large corporations who donate funds to universities. Those corporations also likely benefit from the research done on their behalf. If taxation is to be reformed it might be good to put a bit more power back into the hands of those who are the average citizens...and those who are probably paying more than their share of funds to keep this country and its institutions functioning.
At this time Canada has one of the highest proportions of private university funding in the world (CCL 2010b; Metcalf 2010). In 1979 public funding (our tax dollars) made up 84 percent of university operating revenues. By 2009 this figure was reduced to 58 percent. Over this same period, tuition fees rose from 12 to 35 percent of operating revenues. Funding through donations, grants and bequests grew from $54 million in 1972 to $2.9 billion in 2008. In 2008 almost 40 percent of this total came from corporations. Student debt has skyrocketed.
It would seem that the smart thing government could do is to make sure that corporations and the very wealthy pay their fair share in taxes, and then direct those funds toward education and research that benefits all citizens.