Focus on the people, not corporations

A fundamental agreement across the political spectrum is that wealth should be constantly redistributed throughout the economic system. Libertarians and Communists and everyone in between agree on redistribution. They just disagree on who should do it. Moving more to the centre of the political spectrum, where we find the policy range of the major Canadian political parties, there actually seems to be a consensus that corporations should do approximately 90% of the redistribution and government approximately the remaining 10%. This is, of course, based on the unemployment rate in Canada - typically hovering between 5 and 7% of eligible workers. Furthermore, this aid is supposed to be transitory. It is specifically designed to get people back into the corporate cash redistribution program. The differences between the parties on this specific piece of orthodoxy are virtually nonexistent. The most orthodox, i.e. the Liberals and the Conservatives, have modeled the economy on the basis of job preservation through the protection of companies that have large numbers of employees. The only fundamental difference in approach seems to be the companies they prefer to focus on, be they manufacturing in Ontario and Quebec or resource extraction in Alberta and Saskatchewan. The approach, however, is identical.
There are a number of policy levers that can be used to tweak the corporate status quo to achieve the goal of wealth distribution via corporations. Prime amongst these is tax law. There is a belief that decreasing corporate tax rates invites corporations to set up shop, and incentivising hiring through tax deductions is a good way to maintain a healthy workforce. Tax law is used to give innovation subsidies, incentivise pollution reduction, and allow for depreciation on working capital. Here is the problem: the labyrinth of corporate tax breaks are costing us over $40 billion per year. Let’s put that in human terms. That’s enough money to give 1 million Canadians - over 3% of the entire population - a salary of $40,000. To put that in perspective, the COVID crisis has created the worst job loss in recorded Canadian history. About 1 million jobs have been lost. If we eliminated corporate tax dodges, all of these people could have a salary and there would still be money left over.
The obvious objection to this equation is that increasing the amount of money that corporations pay in taxes would shrink the economy as companies would fail. This is because people buy stuff that companies produce, those companies hire people to produce that stuff, and if that stuff becomes too expensive for companies to produce, they go bankrupt. In this chain of consequences, companies appear to create the jobs. If you look closer, however, this is not true. Companies are created by consumer demand, not immaculate conception. The reason that companies produce stuff is because people buy it. People buy it because they have both the desire and the money. Where our models depend on corporations to create jobs, we are actually focusing on the wrong part of the economic chain of being. Stuff is sold because there is demand and money, not because there is supply. Companies are disposable intermediaries between people and stuff. Cash, however, is not a disposable intermediary. The more cash people have, the more demand can be expressed in the market. If we focus on the consumers and not the producers, we will allow the efficiencies of the market to correct for any corporate failures due to the change in taxation. If we support demand, supply will follow.