‘Trickle down’ is discredited mantra

Re: “Canada asleep at the wheel on U.S. tax reform,” comment, Jan. 6.

The writers are demanding that Canada “respond” to the recent dramatic reduction in U.S. business-tax rates. In particular, they claim that “improving Canada’s business-tax regime is good policy.” By “improve,” they mean “reduce.”

This is the long-discredited mantra of the wealthy: “If you reduce our taxes, we will allow more wealth to trickle down to ordinary people.” What rubbish! The wealth does not “trickle down.”

Instead, corporations use it to buy back shares and cancel them, thereby making the remaining shares worth more. Also, corporations use the wealth to acquire other corporations and become wealthier, as we have seen with Tim Hortons.

Canadian taxes are a bit higher than U.S. taxes, and the level of our services is also higher. Consider health care. On average, Canadians enjoy better health during their lives and live longer than U.S. citizens. I’m glad to pay a bit more tax for a longer, healthier life.

U.S. citizens are many times more likely to be murdered than Canadians. The average standard of education in Canada is better than in the U.S. We get a lot of value for our taxes.

The great fear of the Fraser Institute is that businesses will make investments in the country that has the lowest tax rates. This is “the race to the bottom.” Surely, there must be some businesses that recognize the value of investing in a country that has a healthier, better-educated workforce and a less dangerous culture.

David Stocks Colwood