The Harper Conservatives want to cut taxes on corporations from 28 percent to 25 per cent. The reason they give is that businesses would be able to plow more money into their businesses and so create more jobs.
But studies show that the rate of investment in machinery and equipment has declined in lockstep with falling corporate tax rates over the past decade. What’s more businesses have added $83 billion to their cash reserves since the onset of the recession in 2008. They are now sitting on these billions while Harper wants to cut their tax rate so that they will have more billions to sit on.
Michael Ignatieff and the Liberals oppose this corporate taax cut. They want to use the extra money they would save in education and social services.
The issue boils down to this: Should governments invest scarce resources in making life more affordable for families by enhancing social programs or in giving corporations additional tax cuts so that the corporations will have more money to sit on that they apparently don’t need.
Should corporate tax rates be cut?
What do you think?