While I am not an economist or a tax specialist, I am a former small business owner (e.g., I ran my own special education private practice) who had to meet a payroll and all that implies. As such, I would like to talk about some of the Harper government tax cuts and why they are important for economic stability, job growth and prosperity. Item # 14 on the Harper government accomplishment list relates, for example, to the lowering of the corporate tax rate from 31.3% to 22.2% in 2009, to 18% in 2010, to 16.5% in 2011 and to 15% in 2012.
Similarly, Item # 24 has to do with to the GST/HST tax cut that Canadians can see each and every time they pay for most products and services. Cut first from 7% to 6% and then to 5% back on January 1st, 2008 (or if it is the HST, from 15% to 13% as happened in Ontario), 2% may not seem like much, but added up over time, particularly on big-ticket items, it is a huge savings — making it possible for Canadians to have more money in their pockets.
Some say, in this election campaign, the notion of corporate tax cuts is going to be a hard sell for the Conservative Party. I don’t think so once Canadians understand that, contrary to what the Liberal, NDP and Bloc opposition have said repeatedly, those tax cuts are NOT just for banks and big corporations.
Every single limited company is included to some extent, whether they have four employees or 400. In other words, if a business has “Ltd” or “Inc” after its business name, it is a corporation and, indirectly, both the employees and customers benefit from it receiving a tax rate reduction. However, precisely what tax credits or tax rate deductions a business is entitled to will depend on the type of corporation it is. My point, however, stands — that corporate tax cuts do not only benefit the largest corporations.
However, Liberal Leader Michael Ignatieff doesn’t seem to care that raising the corporate tax rate again would be a job killer and have a major drag on the Canadian economy. Specifically, he is on record as saying a Liberal government (or, one assumes, a Liberal-led coalition) would leave the corporate tax rate at 18%. The problem is, and Ignatieff must know this, the corporate tax rate is already down to 16.5%, meaning that a Liberal government would raise the corporate tax rate, not to pay off the deficit or accumulated debt, but for their “spending priorities.”
As this “investincanada” website explains, there is a reason our economy is rebounding faster than all the other G7 countries. Canada has a 12 percentage point advantage over the U.S. — confirming there is a very important and practical reason Canada’s economy is rebounding from the negative affects of the recession.
As Prime Minister Stephen Harper said yesterday when he spoke at Rideau Hall immediately after the writ was dropped, since his minority government was first elected in January 2006, Canadians have saved, on average, $3,000 a year in taxes. Now, that’s real money.