This is the story of how a number of US industrialists, including Prescott Bush, grandfather to the current US President, are accused of attempting to overthrow the US government in 1933 and 1934. Had it not been for the patriotic opposition of General Smedley Butler, the face of America might be very different today.
This is a frightening tale and shows how fragile our democracy can be.
The tax cuts recently advocated by Jim Flaherty and the Harper Government have done nothing to strengthen our economy. In fact, they are exaggerating the differences between oil-rich provinces and regions that rely on manufacturing.
Link to Canadian Centre for Policy Alternatives Study.
Here are details from the press release:
The study, by economist Jim Stanford, analyzes the distribution of corporate profits across Canada’s provinces and across 16 major industries. It finds that the big winners from Conservative corporate tax cuts will be Canada’s oil-producing provinces, and the oil and finance sectors. In contrast, industries and regions which are struggling will receive very little benefit.
“Despite what Finance Minister Flaherty says, corporate tax cuts are an especially uneven policy tool,” Stanford says. “These corporate tax cuts constitute a significant net fiscal shift in favour of Alberta, and away from Ontario and every other non-oil-producing province.”
According to the study, Canada’s three oil-producing provinces, which account for 15% of the population, generate 36% of corporate profits—and can be expected to reap a similarly large share of the benefits of corporate tax reductions. On a per capita basis, companies operating in the oil-producing provinces can be expected to receive three times as much benefit from the tax cuts as companies in the rest of the country.
“Finance Minister Flaherty is ‘picking winners’ as surely as any other Finance Minister—including Ontario’s,” says Stanford. “Surprisingly, the ‘winners’ he’s picking are the provinces and industries that are already doing very well indeed.”
The study also questions the economic impact of corporate tax cuts. Despite the dramatic decline in corporate tax rates this decade, business spending on capital equipment and R&D has been remarkably sluggish—even as Canadian companies are enjoying all-time record profits.
“Corporate tax cuts, as expensive as they have been and will continue to be, have had no visible impact on the broad pattern of business investment at all,” Stanford says.
“In addition to asking whether the regional and sectoral impacts of the Harper government’s $15 billion annual corporate tax cuts are fair and acceptable to the majority of Canadians, we should also ask whether they will have any beneficial impact on Canada’s economy at all,” concludes Stanford.
This is no way to enable a vision for Canada. Reducing $15 billion in tax revenue PER YEAR from those who are most capable of paying corporate income tax is nothing short of an abomination. To make things worse, the smokescreens being thrown around by the “our government” are unfortunate, because they are distracting Canadians from very real issues.
For example, the ongoing vitriolic attack by Flaherty and other Conservatives against the Government of Ontario are very unfortunate because they’re (a) an international embarassment, (b) potentially creating self-fulfilling prophecies and (c) no way to run a country.