Ghost of Harper haunts tax strategy
Re Road map to a better place, Editorial Dec. 6 Unless the federal Liberals act decisively in the coming year, Stephen Harper, like the ghost of Jacob Marley, will continue to haunt their fiscal agendas over the next four years.
Canada’s books for 2013-14 show personal taxes accounted for nearly half (48 per cent) of total federal revenues. Corporate taxes, on the other hand, accounted for a mere 13.5 per cent.
A ruinous and obsessive corporate taxation strategy has gradually taken over our political and economic thinking — a strategy that now is severely limiting our government’s ability to address even the basic needs of the country.
A race to the corporate-tax bottom began with Brian Mulroney in the 1980s when he cut eight points off the rate. Then, in the early 2000s, Paul Martin reduced them another six points to 21per cent. As each government’s yearly per capita revenue diminished, less money was available to address the expanding social, environmental, education and economic needs of our rising population. Finally, in the middle of a crushing recession, Harper further reduced corporate taxes another six points to 15 per cent. Mulroney and Martin were well intentioned, if excessive, but Harper was reckless, with the added ideological benefit that his actions would reduce the size of government and deliberately starve it of the funds it needed to adequately function.
Too much of a good thing can be harmful. The new government’s cupboards are bare. Strength of leadership is needed now to realign our approach to corporate taxation.
The Liberal middle-class tax benefit is peanuts compared to the corporate tax drop to 15 per cent. Time to move it back to a more reasonable 18 to 20 per cent. Edward Carson, Toronto