My two cents on economic development

While I recognize the importance of eliminating government debts, I think it is appalling how governments are taking more and more from services - that is, almost exclusively social services like health care, education, and employment insurance. At the same time multinational corporations are making record billion-dollar profits while enjoying lower tax burdens and lower employee benefit costs than ever.

(No, you're right, I don't have any solid evidence of this, but I think most people would agree with my assertions. Everyone knows banks have had several record breaking years in a row, and everyone has heard the line that 'job security is a thing of the past.' The upshot is employers don't have to deal with long-term health insurance, retirement pensions and retraining senior workers.)

So, the obvious question to ask is why can't we return to the 1930s when the majority of the government's income came from corporate taxes and sales taxes, and there was no personal income tax (I could be wrong on the dates here). Why aren't the governments raising corporate taxes to both eliminate debts and maintain social services. As good corporate citizen's, the companies should recognize the value of their contribution to society.

Well, unfortunately, corporations like to have their cake and eat it too. I guess I should be careful of broad generalizations, but even if big business would allow higher taxes, they need to have everything efficiently done and quantifiably measured. Things like education and health care, are by their nature difficult (even impossible) to make perfectly efficient, and to quantify their results. To be fair, companies are not my scapegoat for all the evils of society - it is everyone's responsibility to avail themselves of their right to an education, and the responsibility of the every member of society to live responsibly and honestly.

The answer you would probably expect to get from government and big business is that in order to remain competitive and provide jobs and bring money into the local economy, the must keep costs down. If government raised taxes, it would be cheaper to build new buildings and infrastructure in developing countries and relocate their operations.

The result is the ironic situation that the economic disparity in the world at large feeds the wealth gap here at home.

It seems to me, then, that the solution must be a concerted effort by the citizens of the developed world to persuade their governments to assist the efforts of developing countries. In a developed world, not only would more of mankind have access to health lives, education, and personal freedom, and not only would companies have vastly increased markets for consumer products and services, but corporations would not be able to use the threat of relocating to cheaper countries to avoid higher taxes.

Perhaps it is a vain hope that someday world governments will cooperate in serving the human race, rather than each trying to grab a bigger piece for themselves.

(Another good reason for this besides our own economic well-being is to minimise the destruction of the ecosystem that seems to accompany the idustrialization phase of a country's development.)

I'm an engineering student, not an economist, so I would welcome comments on this article. I would love to discuss this with anyone who has ideas on the subject, to find a better explaination of the causes of our current economic situation and the solutions we can propose.


Last updated November 8, 1996
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