Taxes are serious business.
Smart tax policy includes more transparency and less reliance on buying support with tax cuts. It is key to a strong economy. Instead Stephen Harper has treated tax like a political trick or treat.
"Six consecutive deficits could have been avoided had the Conservatives stopped giving away tax breaks it couldn't afford," says Dennis Howlett, executive director of Canadians for Tax Fairness. "They've tried everything from shaving points off the GST, to boutique tax credits like the child benefit increase and a bargain basement corporate tax rate. The result has been funding shortfalls in areas that mean the most to Canadians."
Howlett says the lack of a plan is irresponsible and has wreaked havoc on the economy. "They keep doing this, they keep playing the tax cut card even before they have a surplus available to give away," he says, adding that those who benefit most are the wealthiest. Their reaction has been to sit on the money or buy imported luxury items, which does not create Canadian jobs.
The airwaves are filled with ads featuring Stephen Harper talking about the need to lower taxes. But he generally fails to mention that Canada already has the lowest corporate tax rate in the G7. That hasn't had the impact predicted by right-wing political types.
The Conservative government has now reduced the federal corporate tax to 15 per cent in corporate tax. In comparison the U.S. federal government tax rate begins at 34 per cent. The spin has been those tax savings would be reinvested in corporate research and development and job growth. Nope. Hasn't happened.
Where's that "saved" tax money going? We can't tell for sure but here's a couple of education guesses:
- Canadian corporations are currently sitting on more than $600 billion in "dead money"
- Canadian money in tax havens has reached an all-time high of $199Billion.
And as the chart above illustrates, it sure isn't being invested in the nuts and bolts of business ventures. Thanks to economist Toby Sanger for sharing.
Canadians for Tax Fairness fights for a tax system that work for all Canadians. Help us hold politicians accountable for their tax decisions.