Policy alert


Jack Layton promises lower taxes for small businesses, higher taxes for big businesses.

Layton would push the corporate tax rate back up to the 19.5 per cent of 2008, instead of the 16.5 per cent under recent cuts by the Tory government … the NDP would cut the small-business tax rate to nine per cent from 11. It would also set up a job-creation tax credit that would give employers up to $4,500 for each new hire. And it would extend the accelerated capital cost allowance for four more years.


Policy alert

  1. Can someone who is more business-minded than me clarify this? Wouldn't many small businesses also be corporations? Or do corporate taxes only apply to large corporations?

  2. Not necessarily true.

    However the difference is that there is a specific Small Business Tax rate, which any business or corporation can use instead of the general corporate rate, provided their income is under a certain threshold.

  3. I watched 60 Minutes on sunday and it showed the results of high corporation tax rates in the US.We need corporations to keep their head offices and taxes in Canada. We cannot ALL work for the government .All Canadians benifit from Corporations.

  4. It would also set up a job-creation tax credit that would give employers up to $4,500 for each new hire.

    So Harper and Layton agree that employers need to be bribed to hire people. That explains the rift in the time/space continuum that opened up over the country today.

  5. But income to the operator of an unincorporated company is just regular income subject to personal income tax, although you can get better deductions.

  6. I can't help but think that voters are going to like these corporate tax policy directions put out by the opposition parties because most Canadians are not going to want to wait 5 freakin years for a tax break Harper will have forgotten about by May 3. It took Harper only 10 short months to completely reverse himself on Income Trusts and destroy small Canadian Investor retirement accounts.

    Problem No 1 for the CONs: Nobody beleives the words that come out of his mouth anymore.

    A blast from the past: [youtube U9mibZYpVPY&feature http://www.youtube.com/watch?v=U9mibZYpVPY&feature youtube]

  7. I watched Jon Stewart last night and he pointed out that while corporate tax rates in the U.S. are around 35% (btw, corporate tax rates in the U.S. are around 35%) GE, as an example, actually paid $0 in corporate taxes on their profits last year. In fact, they got $3.2 billion in tax incentives, so in a sense the paid negative $3.2 billion in taxes last year.

    And they still shipped jobs out of the U.S.

  8. Did any of GE's subsidiaries pay corporate taxes?

    Im also curious to know what kind of tax incentives made up the 3.2 billion.

  9. GE had profits last year ?

  10. LOL

    ETA: Serious reply though. GE made $14.2 billion in profits last year, over $5 billion from their U.S. operations.

  11. Good questions both.

    Also, my point wasn't so much about the veracity of Stewart's claims per se, except that I'm CERTAIN that he's correct in the broad sense that I'm sure it's true that almost no major corporations in America pay anywhere near the 35% corporate tax rate. That and that while Stewart might not be quite as credible as 60 Minutes, that doesn't make every 60 Minutes report the "Truth" either.

    Oh, and I also think it's worth pointing out that the corporate tax rate in the U.S. is 15.5 points HIGHER than the NDP proposes that Canada's should be. Our "SOCIALISTS" want a corporate tax rate more than 15 points below the Americans'!!!

  12. For some more background, here's the original NYT article that Stewart must have based his bit on.

    Then, here's an article challenging some of the NYT piece, and including the NYT's response to those challenges.

    It should be noted that GE paid no FEDERAL taxes last year (a point I'm sure Stewart made correctly, but my post may not have made the FEDERAL part of that clear).

    The interesting thing about the NYT article is that apparently even GE doesn't dispute it. The spokesperson for GE simply said "GE did not pay US federal taxes last year because we did not owe any."

  13. Yes tax those big evil corporations whose profits will be reflected in their share prices and dividends that will fund my retirement….

  14. I'm not sure what you're inferring (if anything). Are you suggesting that whether we raise or lower taxes, it makes no difference because the bulk of (or the biggest/largest) corporations don't pay taxes?

    If that was the suggestion (and I'm not saying it was, I'm not trying to put words in your mouth), the question would then be: If Layton and Ignatieff plan on raising the corporate tax rate to fund their new spending initiatives, wouldn't raising the tax rate result in zero new money to fund such initiatives? Likewise, if Harper lowers the tax rate, wouldn't it be meaningless?

  15. I know, well the socialists would surely bring the tax rate up to 35%, but its a matter of going about it incrementally.

    And you're right about american corps. Obviously they arrange their affairs for paying as little in taxes as possible.

    That is why the tax code (here and in the US) is such a monstrosity.

    The cycle goes like this: legislate around a loophole -> find a new loophole and exploit it -> legislate around a loophole -> find a new loophole and exploit it…

  16. Ok thanks. Im sure they're upfront about it though, GE is not the kind of thing which could slip beneath the IRS's radar.

  17. Layton just made the same point with a Corporation in Canada(I can't remember the name). The said company has benefited from the Harper Government's corporate tax cuts but still shipped jobs to the U.S.

  18. That's the thing–in painting big corporations as the evil enemy and their profits as the source for all of Canada's social programs, Layton is losing sight of the fact that the "ordinary Canadians" he is so fond of receive wages from these corporations, benefit from the increase of their shares, and buy their products. Give him half a chance, and he'd tax them right out of the country–then where would we be?

  19. Income Trusts were an excellent way for Canadians (most of which have no pension plan) to fund retirement. Why did Harper reverse himself and kill IT's? Harper is no friend of Seniors

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