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Monday, April 16, 2012

Corporate Tax Cuts Do Not Work For Anyone But The Rich

Columns: Corporate Tax Cuts Do Not Work For Anyone But The Rich

By David Murray. The Harper Government is increasing the deficit, borrowing more money and cutting vital services to hand over a whopping 2.85 billion dollars in tax giveaways to already successful Canadian companies and foreign multinationals this year.

Harper asked last month to cut public pensions . At the same time he cut corporate income tax from 16.5% to 15% on January 1st 2012. (The Christy Clark government in B.C. has a corporate tax rate of 10%-it is the lowest in all of Canada and the United States)- Yet B.C. still has the 2nd highest unemployment rate in Canada. There seems to be no correlation between employment and corporate tax cuts. Christy Clark’s government does offer the highest child poverty rate in Canada , and has done so now for nine straight years.                                                                                                 

Stephen Harper knows full well that federal corporate tax rates have been cut by almost half since 1990 when they were at 28%. (they are at 33% in the United States as of Jan 2012). Canada has the lowest corporate tax rate of any G7 country. Yet we struggle with especially high youth unemployment very much like the 1930′s.

Despite getting all these breaks Canadian corporations are sitting on more than $859 million in cash reserves. These corporations are using this great financial windfall to pay out more in dividends to shareholders, while they themselves are not reinvesting to stimulate the economy, instead choosing to hoard huge amounts of cash.

I believe we need to roll back these corporate tax cuts. We need to invest in affordable housing, child care and infrastructure which would provide a lot better return on our tax money.

David Murray is the editor of the Pitt Meadows Today

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