In the new Canadian federal government budget, a non-refundable tax credit worth up to $45,000 of net income is proposed for artists, to be called the Canada Creative Credit.
Some tax policy jargon: a tax credit is not the same as a tax deduction. For a tax credit, calculate your income tax owing based on revenues minus eligible expenses. Once you have figured out that amount, subtract the credit. Non-refundable means the credit can reduce the amount you owe all the way down to zero, but no further – you can’t use it to get a payment from the government.
The budget says it will likely take the form of a non-refundable tax credit that would “provide tax recognition on up to $45,000 of annual qualifying net business income derived from original and creative artistic works.”
What’s wrong with this? I’d say two things.
First, an old, common-place principle of equity in taxation is that a dollar is a dollar is a dollar, regardless of how you earned it. Two people who each earned, on net, sixty thousand dollars last year, and have identical family circumstances, should pay the same amount in income tax, and it shouldn’t matter if one works as a mortgage loans person in the local credit union and the other works as a furniture maker. This budget proposal would say the novelist who, after expenses, earned sixty thousand dollars last year should pay less in income tax than the credit union employee or the furniture maker. It is not fair.
Second, suppose we said “ah, but there is something special about the arts to our national well-being, beyond what the artist earns in the market, and as a consequence we should subsidize the arts.” This is generally expressed in pretty vague terms, but for the sake of argument let’s accept it. Then the next questions are: What art in particular? Are there certain genres of art that matter more to the commonweal? Does it matter if the art is, respectfully, any good?
But that’s the question no one wants to answer any more. From “culture passes” that tell young people “just go buy something creative with it”, to “guaranteed income for artist programs,” that just say “you call yourself an artist, and that’s good enough for us,” the very idea of saying that the disbursement of public funds to the arts ought to involve the judgment of some group of people who know something about art, and should be selective, is long past. Any content will do, whatever. I don’t see what public good that serves.
Cross-posted at https://michaelrushton.substack.com/
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