OTTAWA – Famous Judge Oliver Wendell Holmes said that taxes are “the price we pay for civilization.” However we feel about taxes, Benjamin Franklin nailed it: “In this world, nothing is more certain than death and taxes.” There are nonetheless some big areas of discretion in taxes: Who pays them? How much are they? What do we spend them on?
Since 2000, there have been breathtaking reductions in the federal tax rate on large corporations. Harper and Flaherty proudly brag that we have the lowest tax rates for large corporations in the G8… while the tax rate on small businesses has not been reduced. Our tax rate for Big Oil, Big Banks, and telecom giants has been reduced to less than half that of the USA! Big corporations and CEO’s are reaping record windfalls; many workers and family businesses in Northwestern Ontario are struggling. Add new payroll tax increases, the new HST on everybody (and just about everything), and there’s been a big shift in the share of taxes paid by you and me.
Canada has an annual deficit this year of $45 Billion. This is adding to a national debt (on which we pay interest!) of $558 Billion. Divided up equally, your share of that debt is $16,460 for every Canadian man, woman, or child. Want to personally pay up that $16,460 for each family member? Or would you like to see the largest and most profitable corporations shoulder their fair share too, as they used to? After all, they use the roads, water and power systems, courts, Medicare, other infrastructure, and natural resources to subsidize their business.
When I question Harper and Flaherty in the House, they say that such tax cuts stimulate investment and job creation. If only it were so! The facts reveal a different story. Investment in Canada has gone down at the same rate as the tax cuts, with the surplus profits being invested in the USA, multi-million dollar CEO pay packets, and Caribbean tax havens. Sometimes parent companies benefit handsomely through plant closures or subsidiaries’ bankruptcies while workers, families, and entire communities lose jobs, pensions, severances, and homes.
Economists like Jim Stanford point out that instead of creating jobs (real family-sustaining jobs, not low-paying ones), large corporate tax cuts take money right out of the government’s ability to pay for jobless benefits, retraining, education, and critical infrastructure. The federal share of health care costs is now down to less than half of the original 50%! Going further, Flaherty’s recent EI premium hikes that small businesses and workers must pay is a sure- fired job killer if ever there was one.
Louis Eisenstein once said something especially suitable to describe what is happening to our tax system in Canada under Stephen Harper: “Taxes are distinctly disagreeable burdens, and so there is constant striving to place them onto the backs of others.”
Should we mortgage our children’s future by borrowing billions of dollars today, to subsidize corporate welfare on a huge scale? Do you think it’s good economic policy to run the biggest deficits in Canada’s history, in order to grant sweeping corporate tax cuts… with no conditions attached regarding investment or job creation in Canada? Do you think it is good for you – or the economy – to shift the tax burden from large multinationals onto your family?
Soon, I will have to make a critical decision whether to vote for, or against, Harper’s next budget. What do you want to see… or not see… in that budget?
I work for you. Please, send me your thoughts to bruce@brucehyer.ca.
Bruce Hyer, MP