Successive federal governments promised that companies would create jobs if corporate taxes were reduced. From 2000 to 2011 the corporate tax rate was slashed from 28% to 16.5%. As of January 1, 2012 it fell another 1.5% to 15%. What’s been the value to Canadians?
A major Canadian Labour Congress (CLC) study “What did Corporate Tax Cuts Deliver?” shows that big businesses aren’t creating jobs, investing in equipment, machinery or developing the skills of their workers. What corporations are doing is hoarding cash, paying out increased dividends to shareholders, and beefing up CEO paycheques
Big businesses are now sitting on $500 billion in cash assets. But Canadians are paying the price. To fund the corporate tax giveaways, the federal government is borrowing money and cutting back on the public services Canadians need - like food inspection, or staff to deal with Employment Insurance claims from workers who have lost their jobs.
Let Finance Minister Jim Flaherty know he’s got his priorities for the next budget all wrong.
Instead of cutting the public services Canadians need, make big businesses give us back our money. Instead of job-destroying cuts, reverse the corporate tax giveaways.
Go to the CLC website and send a letter to Finance Minister Jim Flaherty
The following message will be sent with your signature and personal message below:
More tax cuts to corporations is simply the wrong priority for Canada when our economic recovery has ground to a halt. Canadians are now financing corporate tax rate reductions to the tune of $13 billion a year and seeing little value in return.
Corporations are not creating jobs. They are simply hoarding cash, paying bigger dividends to shareholders, and adding to skyrocketing CEO paycheques. Canadians can’t afford to borrow money anymore, just to it turn over to corporations who aren’t living up to their end of the bargain. Big business is sitting on $500 billion in cash instead of creating jobs or investing in machinery, equipment or developing their workers’ skills.
Canadians overwhelmingly agree - 92% - if corporations don’t create jobs like they promised, they must pay the money back to the government. Even 87% of Conservative party voters agree corporations should be forced to give Canadians back their money if they don’t follow through on their promise.
The focus of your upcoming budget should be creating jobs, not job-destroying spending cuts. You should reverse the corporate tax giveaways that are costing us $2 billion in lost revenue for every percentage point drop in the corporate tax rate, financed by Canada going deeper into debt.
Creating jobs is the best way to reduce the deficit and debt. I want my government to invest in public infrastructure and stop the job-destroying cuts to the public services that Canadians need. You can do that by reversing the corporate tax giveaways. Restoring the federal corporate income tax rate from 15% where it stands today to 19.5% – still below where it was when your government took office – would return $10 billion in extra revenues per year.