Tax cuts, indeed, can create jobs. It’s not a preposterous notion at all. The more money an entity or individual can spend, the more potential economic development there can be. Tax cuts don’t inherently assure job creation, but they give an incentive none the less. Strategic and informed tax cuts are what we should be aiming for.
I see the value in tax cuts during a recession, up to a point. I see tax cuts that genuinely help individuals as important, powerful and something that should be explored more by our government. No unintelligent simplistic message that isn’t based on or statistics, please.
The Conservatives lack interest in sensible tax cuts.
Our Conservative party prefers corporations to people. It’s blatant. If only we had something recently to illustrate this clearly for us. Huzzah – we do! The Economic Action Plan (aka the 2012 Federal Budget) puts preferences of corporations over preference of individuals.
Payroll taxes continue to be raised, as the budget outlines. Every individual who earns an income in Canada pays payroll taxes. From the poorest person, to the richest doctor. It doesn’t matter where you work, your work ethic, your individual conditions and situation – you will be paying more. This, naturally, means that those with the lowest incomes will be suffering the most from this. They have the least money to spare, and although the money they have to give up is meagre compared to those above, it’s vital to them.
For a low-income Canadian, an increased payment for EI could be the difference between a good amount of food one day, and perhaps not the same amount next day. It means less security. It means more likely to be living pay-cheque to pay-cheque, as you would have even less to save up in case something plummeted in your life.
Small-c-conservatives are supposed to be about low-taxes, yet our big-c-Conservatives get away with further raising taxes on your average and low income individual. Cutting taxes that spare wealthy corporations billions, while raising taxes on average and poor Canadians. For shame.
To give you an indication of the corporate tax trend, here’s a neat chart showing the federal corporate income tax rates, in addition with Ontario and Quebec’s (source here):
Now, this is only as recent as 2005 – since then our Conservatives have lowered it all the way to 15% (effective soon). Our federal corporate tax rate is at a level 26% percent lower than it was in 1960, or 6% percent lower than it was in 2005.
If you’re thinking, perhaps the times warrant such drastic reductions, then maybe you should look at this. The cash hoardings in the first quarter of 2011 (meaning, only one fourth of the entire year) for non-financial corporations:
Statistics Canada figures indicate that private non-financial corporations held $471 billion of cash in the first quarter of 2011 ($322 billion of Canadian currency plus $149 billion worth of foreign currency). Including short-term paper would bring this total to half a trillion dollars, enough to pay off the national debt (i.e. accumulated deficit).
471 billion dollars. Amazing, yet Conservatives continue to lower corporate taxes. Even more amazing, corporate profits continue to sore, even in the last quarter of 2011:
Canadian corporate profits reached their highest level since the recession in the last quarter of 2011, Statistics Canada reported Thursday.
Fourth-quarter operating profits were up nine per cent from the previous quarter, to $71.4 billion on a seasonally adjusted basis.
And many economists and business statisticians assert, and support clearly with the evidence in their favour, that profits are stable and will continue to rise.
So, corporations aren’t in trouble, yet the Tories are giving them billions of dollars in welfare. These tax cuts don’t seem to be saving lives or helping people, they just seem to be lining the pockets of already prosperous – and growing – corporations.
While individual and average Canadians are struggling with a stagnant income and rising debt. Perhaps a tax break from some of them would help with that, perhaps increased social assistance for the ones even lower would help them:
One day later, Statistics Canada released a report on the third quarter of the year, which highlights increased household debt. According to the new report, the ratio of debt to personal disposable income – the measurement of a consumer’s position – is 152.98 percent, up from 150.57 percent last quarter.
Much of Canada’s consumer debt stems from stagnant income and those piling on debt. Debt burdens have exceeded the levels in the United States and the United Kingdom. Mortgage credit rose to $1 trillion, while consumer debt increased to $448 billion.(source)
If you’re a Canadian who makes above $42,707, you’re paying either the same percent on your income as corporations (15%) or higher on a federal level. I repeat: if you’re like most Canadians, you’re paying the same percent to the government from your income as a freaking corporation that makes millions or more. Corporations with billions of dollars of profit versus struggling individual Canadians.
Not only that, the money that your average and low-income Canadian would gain from any tax breaks would have to go to spending in the economy. Your average person has significantly less cash hoarded than those on the top, for obvious reasons. Your average person needs to spend their money – their economic situation dictates that. Wealthy corporations in Canada, evidently, can hoard over 400 billion dollars quite fine. The people can not.
Tax breaks for the top and corporations mean more hoarded and un-invested wealth from rich individuals and corporate ends, whereas tax breaks for your regular person might translate to real investment due to their circumstance – in addition, it would absolutely help people who struggle with their tepid debt (millions of our citizens).
Corporations struggling to make an extra billion a year, versus your average Canadian struggling just to pay the bills for their shelter. Our government responds by lowering corporate income tax, and increasing payroll taxes on every individual. Hence, corporations are their friends, people – and, people: watch out for yourself, because the government sure isn’t.
