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Deconstructing the corporate tax cut debate

With election speculation on Parliament Hill running rampant, corporate tax cuts have taken centre stage in Canadian public debate.

The Harper government is sticking to its promise to continue cutting Canadian corporate taxes to 15% next year. It’s a pricey promise: Total Harper corporate tax cuts will deprive Canadian coffers of $14 billion a year in revenue by 2013-2014. The federal government, meanwhile, is in a fiscal deficit situation.

Given recent polling that indicates the majority of Canadians don’t like the idea of corporate tax cuts, it could be a risky wedge issue on which to stake an election.

But conservatives in Canada are careful students of framing. They understand what neuroscience is teaching us: repetition changes minds.

There are several fascinating experiments that prove this phenomenon.

For instance, psychologist Ian Skurnik asked senior citizens to sit through a computer presentation of a series of health warnings that were randomly identified as either true or false: Aspirin destroys tooth enamel (true); Corn chips contain twice as much fat as potato chips (false). Quizzed a few days later, the seniors remembered the false statements as true -- repetition had rewired their brain to believe falsehoods.

Kimberlee Weaver of Virginia Tech did a study that showed if one person tells you that something is true, and tells you that over and over again, you are likely to conclude that the opinion is widely held.

Norbert Schwarz from the University of Michigan helped show that even when the task is to educate the public with a myth-busting fact sheet, people walk way remembering the repeated myths as truth.

Astute politicians use repetition to build support for their side. Harper’s Conservatives are nothing if not disciplined message bearers. Their carefully scripted frame, which key Ministers are diligently repeating, is simple: Corporations = job creators; corporate tax cuts = job creation.

Finance Minister Jim Flaherty has used it: “If we want more jobs, higher wages, an improved standard of living for all of us, Canada needs to be an attractive place for job-creators to do business and invest.”

Government House Leader John Baird has used it: “We are reducing taxes for businesses because it creates jobs and it creates economic growth," said Baird. "Our tax rates for job creators is one of the measures sustaining our fragile economic recovery."

And you can expect to hear a lot more of the Conservative frame.

Just this week, Canadian Chamber of Commerce President and CEO Perrin Beatty, a former Conservative politician, played his part by reinforcing the Conservative frame, warning the economy would take a "blind side hit" if corporations don't get their tax cuts.

Since the majority of Canadians currently oppose more corporate tax cuts, it’s interesting to note their alignment with the opposition parties’ take on this issue: reverse the corporate tax cuts and use the revenue to invest in things like health care and deficit reduction.

Both Liberal Leader Michael Ignatieff and NDP Leader Jack Layton have come out strong on this lately.

In this recent and uncharacteristically impassioned speech, Ignatieff said: “We’re saying we’re going to reverse the corporate tax cuts and we’re going to invest in the Canadian family.”

Layton has been a consistent opponent of corporate tax cuts, calling it a “reckless form of spending that is driving us further into debt.

“Quite simply Canada can’t afford them right now. With 1.5 million Canadians still unemployed, growing inequality and with seniors’ poverty doubling since the last round of service cuts, now is not the time to spend another $12 billion on corporate tax reductions. Now is the time to invest instead in a better quality of life for our poorest seniors through improvements to the Guaranteed Income Supplement."

Layton's take on corporate tax cuts was particularly strong during this interview on Lang and O’Leary. He impressed Kevin O’Leary so much that O'Leary -- Mr. Greed Is Good -- encouraged Layton to leave the NDP, become the leader of the Liberals and go for the Prime Minister's job. (Layton declined).

Other progressives in Canada, outraged by the corporate tax cuts, have come out swinging with a stack of myth busting arguments – many of which provide instructive counterpoints but repeat the conservative frame in order to negate it. For instance: tax cuts don’t create jobs. By repeating the frame ‘create jobs’ we reinforce it in the public mind.

George Lakoff, framing guru, has been very clear: negating a frame activates the frame.

Other interesting arguments are at play, such as this one by the National Union of Public and General Employees (NUPGE), which taps into Canadians’ understandable outrage that CEO pay seemed to be the only thing that was recession-proof over the last few years. NUPGE writes: “corporate tax cuts force Canadians to subsidize exorbitant CEO salaries.”

What’s intriguing about this argument, from a framing perspective, is that it refocuses the lens on the corporate “gravy train” (NUPGE’s words, not mine) and it makes a link to a system that’s rigged in favour of powerful corporate elites. Yes, those same corporate elites who enjoyed playing fast and loose with the rules and helped bring an entire world economy to its knees.

Citizens, through their governments, cleaned up the mess with corporate bailouts and job-creating stimulus -- including long-awaited infrastructure investments that left communities with improved roads and buildings, new rinks and social gathering spots. Yeah, we did that. Where's Corporate Canada's contribution?

During his Lang and O’Leary interview, Layton was particularly strong on this aspect: that the corporate tax cuts are a giveaway with no guarantee of new jobs. He talked about corporations that have taken the tax cuts already doled out and left Canada to do business elsewhere.

This approach to the issue reinforces what I've heard over several years of focus group research: Canadians don’t trust corporations to do what is in the best interest of the people. A corporation's bottom line is profit. There’s much to be mined by exploring that angle within a progressive frame on corporate tax cuts.

What I've also learned through focus group research is that Canadians often take a position based on how we rate compared to others. They would be very surprised to learn that Canada's corporate taxes aren't high compared to OECD competitor nations. Canadians are, at heart, pragmatic people. They're unlikely to support a race to the bottom, especially if it affects our high quality of life -- something Canadians take pride in.

So, tapping into national pride, pragmatism, and fairness while maintaining a focus on prudent fiscal measures to protect public programs we love, such as health care -- these are the ingredients of effective progressive messaging on corporate tax cuts. Also, responsibility. Corporations have a social responsibility to contribute to the communities they do business in -- it can't be take, take, take. Canadians expect more. We have a history of cooperative movements hardwired in our collective experience.

Finally, the progressive frame on corporate taxes is still in search of a metaphor. As Lakoff points out, our brain circuitry is wired to understand concepts through frames and metaphor.

My favourite use of metaphor to date is in this smart column by John Moore: “Taxes are like food,” he writes. “You can slim down a fat guy by putting him on a diet, but when he reaches his ideal weight he still needs to eat. Conservatives are like fiscal anorexics. They just can’t stop obsessing over portion reduction.”

My second favourite comparison comes, again, from the same John Moore column: “Naturally the Conservatives and their allies in the business and think-tank communities think lower corporate taxes are always a good idea. Children think not having a bed time is a good idea.”

This blog was originally posted at www.framedincanada.com, a clearinghouse for Canadians interested in learning more about framing issues.

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