AltAusterity Digest #99 May 16-22, 2019

On Tuesday, Ontario premier Doug Ford told municipalities that his government would pay for third-party auditors to comb through local finances to find cuts. Ottawa Mayor Jim Watson has declined the offer, saying he found it “strange” considering the city’s books are open and audited every year. The Ottawa city council increased property taxes by 3% in March 2019 in part due to concerns about cuts at the provincial level. The city treasurer has estimated that the provincial cuts might mean $2 million less for paramedics and $6 million less for public health in Ottawa.

The IMF has released a Review of Program Design and Conditionality which analyzes the design and effectiveness of the 133 IMF-supported lending programs between September 2011 and December 2017. The IMF’s self-review found that three-quarters of the IMF programs were “successful or partially successful in achieving their objectives,” including fostering economic growth, protecting social spending as a share of GDP and poverty reduction. The report goes on to find that many fiscal adjustment programs actually dampened potential growth by focusing on cutting public investment, rather than by lowering current spending or raising revenue.

New IRS data has found that U.S. corporations are paying their smallest share of federal income tax revenue in 60 years. For fiscal-year 2018, businesses contributed 7.6% of the $3.5 trillion in total tax revenue, representing a 2% decline from the previous year. After refunds, the figure actually comes closer to 6.8%. The tax burden for individual taxpayers has risen from 54% in 2017, to 54% in 2018. These changes come following the Tax Cuts and Jobs act, which lessened the tax burden of wealthy individuals and saw corporate tax rates decline from 35% to 21%.

According to the Ontario Financial Accountability Office, Premier Doug Ford will need double the cuts made already in order his election promises. This will require an additional $6 billion in budget cuts and public sector cuts over the next three years. Financial Accountability Officer Peter Weltman warned Wednesday that spending cuts may approach 10%, or $1,100 per person. Finance Vic Fedeli is confident with the Conservative’s economic plan, citing the creation of over 170,000 jobs since the party took office. The Conservatives also plan to provide $26 billion in “tax and other relief” to families and businesses.  

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