SHOULD CORPORATE TAX RATES BE CUT?

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?

10 Comments »

  1. 1
    Vin Smith Says:

    …In spite of a deep love for Canada, I feel unqualified to write about Canadian issues. Even though I have in the past had a subscriptioin to Maclean’s.

    I will say I doubt things are any different when it comes to corporate think in Canada and the United States. Here is a capsule statement that well describes how corporate types think: “What’s good for General Motors is good for America.” This quote is attributed to the man President Eisenhower nominated to be Secretary of Defence. His name was Charles “Engine Charlie” Wilson, CEO of General Motors. Okay… The famous quote was not actually what Wilson said. Here is his actual quote, following a short explanation:

    During the hearings, when asked if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation “because for years I thought what was good for the country was good for General Motors and vice versa.”

    What we need to understand is that conservatives believe the path to economic stability always runs through private business, and those who want to work, will work. The others? Tough luck… Their choice. The liberals believe there must be redistribution of income in order to insure prosperity. To avoid having the streets packed with starving, out-of-work homeless, without prospects for landing a job.

    While I frequently engage in polemics–and sometimes heatedly, I am going to refer to two times in history when laissez-faire policies backfired badly. The resulting social unrest because of indescribable poverty and hunger set two different societies into deep turmoil. Then the reader can make his/her decision as to which course of action is right. Do you secure peace and stability with social safety nets, or do you promote a dog-eat-dog environment…

    The first example was during the closing days of the reign of Louis XVI, and was attributed (incorrectly as it were) to Marie-Antoinette (1755-93), who was, of course, the Queen consort of Louis XVI. Her timeless statement (interpret it as you will), was “Qu’ils mangent de la brioche,” badly translated into English as “…let them eat cake.” As the story goes, the queen consort lost her head over this. Louie fared no better.

    The second thumbnail sketch, showing what happens when class warfare (now being perfected by the GOP in the U. S.) sent the nation and the world (the Great Depression was world-wide; not all of that can be laid at the feet of the U. S. and Mr. Hoover) into economic chaos. That famous saying? “Buddy… Can you spare a dime?”

    Reducing taxes to the rich does sometimes help certain pockets of job creation… It has been known to enhance jobs in the yacht building industry…

  2. 2
    Neil McKenty Says:

    Vin,

    Good informative comment. I thi nk our Harper Conservatives are pretty close to the right wing of the GOP.

  3. 3

    Neil writes:

    I think our Harper Conservatives are pretty close to the right wing of the GOP.

    You have no clue what you are talking about, Neil, with all due respect.

    The Conservative Party of Canada is still light years to the left of the left of the Democratic Party of the US.

  4. 4
    Neil McKenty Says:

    “The Conservative Party of Canada is still light yearss to the left of the Democratic Party of the US.”

    That is rubbish.

  5. 5

    Neil:

    I’ll give you two examples:

    1) gay marriage; and

    2) universal health care.

    The Conservative Party of Canada, as demonstrated by their actions while in power, approve of the above two policies and the Democrats in the U.S., as demonstrated by their actions while in power, don’t.

    Both you will admit are “leftist” policies.

    Now it is your turn, Neil, to demonstrate why this claim of mine is “rubbish”. And, please, let’s see some hard facts.

  6. 6
    Neil McKenty Says:

    Tony, No hard facts but here are some soft ones.

    President Obama says his views on gay marriage are evolving (toward accepting it.)

    President Obama was (and still is) in favour of a universal single payer health system.

  7. 7
    Shayne Says:

    Appreciate the modern appear. I liked this content. Bless you for a fine blog post.

  8. 8
    peter Le Blanc Says:

    I think that the U.S. Government pay more on health care than Canadians do, per captita. If I was an ultra conservative, I would chose the health care Canadians have. Less taxes and more cov erage.

  9. 9
    peter Le Blanc Says:

    As far as I am concerned commited sexual relationships whether homesexuall, or hetersexuall, have equal value.

  10. 10
    forex Says:

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