In his song of praise to corporate tax breaks, (Letter to the Editor, Free Press, July 2) Joe Sawchuck has ignored one indisputable fact.
They don’t work.
If every percentage point that corporate taxes are raised means that there are fewer jobs, as Sawchuk claims, then every point that they are lowered means that there should be more jobs. This has not happened. In addition, with Canadian corporate tax sinking ever lower, Canada’s economy should be correspondingly stronger. However, economists agree that the Canadian economy has, in fact, grown weaker, even after years of taxpayer-funded corporate subsidies.
Just recently, for instance, Canada experienced “negative growth” for the fourth quarter running and in 2014 dropped to 15th in global competitiveness from 9th in 2009, according to the World Economic Forum index.
As Montreal investment company MRB says, the $83 billion gifted to corporations over recent years by the Harper government, and now squirreled away in Luxembourg or in George Town, Grand Cayman, should have been re-invested.
MRB suggests in technology — a proven economic driver which could have yielded 150,000 jobs for Canadians.
The unpalatable facts for the Harpers and Sawchucks of this world are that, when Canada’s economy was at its most productive, in the 1950s and early ’60s, our corporate tax rate was at its highest ever, and that Conservative, right-wing fiscal competence is an urban myth.
After all, Conservative PM John Diefenbaker had to be bailed out by the International Monetary Fund, Conservative PM Brian Mulroney took a $200 billion deficit from Trudeau Senior and turned it into a $514 billion deficit (and then imposed the GST to pay for his incompetence) and right-wing BC premier Gordon Campbell turned a $1.56 billion NDP surplus into a $2.65 billion deficit in one year.
In 2012, the Harper Conservatives’ finance minister took $6 billion from the public purse and “stimulated” a mere $600 million worth of new business.
At a level understandable to the rest of us, only a fiscal incompetent would take $6,000, for example, and invest it for a guaranteed return of $600.
JC VallanceFernie, B.C.