Wednesday, April 2, 2008

Liberals are letting Harper change Canada forever

Reading the noise John McCallum made in defence of Harper's $14 billion corporate tax cut agenda, one is inclined to think:

1) Has McCallum let his National Post subscription lapse? Does he not know that an expensive war, slowing growth and Harper's tax cuts have left the federal government on the razor's edge of a deficit?

And given that …

2) If the Liberals have decided that tax cuts for their pals in the big banks are their top priority, how do they expect anyone to believe their pre-election promises on anything that costs more than a postage stamp?

Harper is flushing Ottawa's fiscal capacity down the drain: changing Canada forever. And their pals the Liberals are with them step for step. They won’t side with the NDP to save some of that money for child care, for tuition reduction, for poverty reduction.

At least we know where the Liberals stand. With Harper.

UPDATE: Here’s the NDP’s sharp defence against McCallum’s noise:

REALITY CHECK: Liberals wrong on corporate tax cuts
Wed 2 Apr 2008

In explaining why the Liberal Party won’t vote against the Conservative government today, Liberal Finance Critic John McCallum accused the NDP of being out of step with social democratic parties by not making irresponsible corporate tax cuts a priority:

[McCallum] called the NDP "the Neanderthal branch of social democrats worldwide," arguing that social democratic governments in Sweden, Norway, Denmark and Britain have reduced corporate tax rates lower than Canada."It’s not a left-right issue for sensible, modern-day Liberals and social democrats but the NDP is still buried in the ideology of the 1950s and for them lower corporate tax rates are evil." (Halifax Chronicle Herald, 2 April 2008)

Mr. McCallum is wrong.

As of 2007, before the latest reduction to 19.5%, Canada’s corporate tax rate was 21% -- already the 7th lowest in the OECD. The countries McCallum cited in fact all have higher central government tax rates than Canada: Sweden (28%); Norway (28%); Denmark (25%); and Britain (30%). (Source: OECD Tax Database, 2007)

And while some social democratic governments have reduced their corporate taxes marginally, none have done so as irresponsibly as the Conservative and Liberal governments in Canada:

In Sweden: Social Democrats lowered corporate taxes two points from 30% to 28% in 1994.
In Britain: The Labour government lowered corporate taxes three points from 33% to 30% between 1996 and 1999.
In Denmark: Social Democrats lowered corporate taxes four points from 34% to 30% between 1998 and 2001.
In Norway: Has had the same corporate rate of 28% since 1992.

By comparison, Canada has already lowered its corporate taxes 8.5 points from 28% to 19.5% between 2001 to 2008 – and will lower it another 4.5 points by 2015.

Jack Layton and the New Democrats have been clear on the need for focused tax reductions for ailing sectors like manufacturing and forestry. But what the Conservatives and Liberals want is an irresponsible agenda of giving breaks to profitable companies at a rate three times deeper than the social democratic governments McCallum cited.

That’s why the NDP doesn’t have confidence in the Harper government’s agenda, while the Liberals continue to.


James Curran said...

Wow. How unusual. The Dippers attacking Liberals. Wow. That's something different.

Anonymous said...

Why this obsession with corporate taxes, BH? Do you understand that Canada is a federal state? Corporations pay tax BOTH federally and provincially. So corporate tax wise Canadian businesses pay MORE than Sweden, Denmark, and Norway. The country where businesses pay the most corporate tax? The US of A!!!! Maybe these businesses need a break at a time of economic difficulty.

Bashing big banks, eh? That is like Norwegians bashing the State Oil company, the Swedes bashing Volvo, and the Danes bashing their pork industry. Vote for Jack Layton because he will fight hard for an end to ATM fees!!!! Is this the work of a major Opposition party? Please go back to the drawing board.

If you want to hurt us, do it on a more important issue. Why not a non-confidence motion on Afghanistan or the continued support of NAFTA instead of populist bashing of corporations?

Malcolm+ said...

Wow, how unusual. Liberal apologists defending Liberal cowardice.

Blogging Horse said...

Wow. How unusual. The Liberals propping up the Conservatives for no reason except a mutual love of letting right-wing economic policy gut the federal treasury. Wow. That's something different.

janfromthebruce said...

Gee, I wonder when the Libs will start quoting the Fraser Institute. Oh wait a minute, corporate taxcuts are their mantra.

James Curran said...

Yes yes. As I's all the Liberals fault. The three of you just reconfirmed it.

Tim Webster said...
This comment has been removed by the author.
Tim Webster said...

Though I don't agree with what is said here.

You all make it very obvious, that the Liberals throw away their chance. The should have did what we all know, they should have voted their non-confidence when the budget was tabled.

As the leaders huddle in their corner, I am sure they think they are paying the price. They are WRONG, Canadians are paying the price. And Canadians haves the right to be angry with them.

ch said...

I was going to write to Layton since the NDP has incorrect information on their website about corporate tax rates (ironically, under the title 'Liberals are wrong') but I see the LPC has issued a statement pointing out this error. It is well known that Canada's corporate tax rate is higher than Sweden and the other countries cited.

The US operates under a different model: high corporate tax rates and low income tax rates at the upper end. In the end, people pay all taxes, it is just a matter of where countries think their wealth generation comes from, whether it comes from rich individuals who may or may not form corporations (US model) or from corporations which employ people (Scandinavian model). I'm not sure which model the NDP supports, as they support the corporate tax rates of the US but I doubt they support their income tax scheme. They appear to be against the Scandinavian model as well, which has been adopted by Ireland and other countries which tend to have high labour costs (like Canada).

Blogging Horse said...

McCallum's making things up as he goes along.

Not one of the social democratic governments he talked about has cut their business taxes deeper than Canada has under the Liberals and Conservatives. Not one.

ch said...

Not sure what you are referring to. All four countries have lower corporate taxes than Canada. Wikipedia lists all the corporate tax rates. Often Wiki is not that reliable, but their numbers seem to be correct on these countries.

Personally, I prefer the Scandinavian model of low corporate taxes and high consumption taxes, compared to the US (which has it the other way around).