Cancel tax cuts, says lefty "think" tank

Corperate tax cuts... ...Canada is already the cheapest of all industrialized nations in which to conduct business (as of 2004). So why do we need more cost incentive at this time?

Tax cuts in general... ...are usually used to boost the economy, right? But Canada's economy is currently running 'flat out', so where are we trying to boost it to?? How about in times of surplus we pay down the debt so we can run the odd deficit when the economy sucks?

Low cost of doing business in Canada

Economy running 'flat out'

Tax cuts are great, when times are lean. But I have to question the timing here... [huh]

The federal government had to cut taxes. The Tories campaigned on cutting taxes so it would have been political suicide if they didn't do it in this budget.

As far as military spending, the government also campaigned on upping this as well. Military spending was decimated under the Liberals. Canada needs a military, so I have no problem with this spending.

I want in under that umberalla too, bigger and better pensions darn it - but - thats just me. :lol:

The less a company is paying in taxes, the more capital it has to expand, hire new employees and increase profits.

These tax cuts are being used because the federal government is having no problem keeping its commitments. Believe it or not Robair, people actually like to keep their own money.

althouygh corporate taxes are pretty low reducing the other taxes a bit is still a good Idea. and yes we are running very fast but there is not full employment so we are not at absolutely full potential.

I see some interesting ideas about economics on this thread.

Government spending on infrastructure and education can rationally be called "investments" because such spending can yield immediate and future tax revenues. Government spending on social welfare programs is not an 'investment' as the money is spent subsidizing a person, province, group, or etc. and no future yield of tax revenue is anticipated from such spending. Social welfare money is simply spent, it is not invested.

Tax cuts, up to a point, can be expected to increase revenues.

This effect is counter to Keynesian economics which have been the mainstay of economic thought in much of the world for the past sixty years.

Keynes, in a nutshell, believed that government spending was the well-spring of a modern economy. Thus his adherents believe that higher and higher taxes will yield higher and higher productivity as individuals and businesses strive to achieve more while patriotically shouldering their tax burden.

Keynesians also promote progressive taxation where those who earn more progressively pay more along a graduated scale. This grand idea was implement in the post war years in both the USA and Europe and caused economic ruin in Great Britain as top income earners paid out up to 99% of their annual income in taxes. In the USA the top tax rate was a much more moderate 95%.

What these regressive tax schemes accomplished was the flight of wealth from the high tax nations to the low tax nations. The excessive tax rates became a disincentive to anyone inclined to want to earn any significant sums of money.

In the 1960's most nations backed away from their +90% confiscatory tax rates and then saw modest gains in revenues into the 1970's.

Reaganomics, which really was just the thinking of Milton Friedman taking political form, said that if taxes were lowered then money would stay in the hands of those who earned it and then they would have excess income to spend on consumer goods and to invest in the market. The effect of money going into the market would lower interest rates and spur growth funded by cheap credit and the eventual net revenue to government would exceed pre-tax cut levels.

The idea worked in the USA just fine until George H.W. Bush passed the largest tax increase in history which contributed to the economic downturn of 1991/1992 and to his own failure to be re-elected.

To his credit and against the desires of his own party, Bill Clinton rescinded the tax increase and witnessed the return of double-digit growth and he left behind a budget surplus when he left office.

The idea worked in Great Britain to a lesser extent mostly because tax rates still remained well above the 30% threshold for non-exempt low-income earners.

New Zealand implemented Friedman's theories and witnessed a record economic renaissance.

Ireland, where the top tax rate was cut from 95% to 22% (with the corporate tax rate at an even lower 10%/12%) has become the only economy in Europe to have maintained economic growth in all sectors across the past ten years. Even during the bust of the 'tech bubble' in 1999-2000 Ireland still saw growth in her technology sector. The impact of Ireland's tax policies has been to make Ireland a European tax haven and as such, billions of dollars in foreign investment money have flowed into Ireland every month for the past six years. The change in the Irish standard of living has been dramatic with personal aggregate incomes in Ireland increasing 88% in that period. In 1987 before economic liberalization, Ireland was, after Portugal, the poorest country in Western Europe. In 2005, Ireland was, after Luxembourg, the richest country in the EU.

Bottom line: no country ever taxed itself into prosperity.

Ireland is demonstrating a highly successful economic model.

Does Canada wish to emulate success or should Canada revisit the failed policies of the socialists one more time?

All good points MCB, excpet for the fact that rising health care costs are because of unions trying to get more pay for their workers. The costs come from treating the various diseases that afflict us all and the various pieces of equipment used in medecine.

More education money doesn't always mean more money for teachers, especially here in BC. Furthermore, Professor salaries are decided by the University or college not by the government, and school districts have their own salary scales as well.

I know that in the school district they are still using the same history and english textbooks I scribbled in 6 years ago. Meanwhile, the football team has had their field upgraded again and can afford to go to the Us and get clobbered by American football teams.