If you were spending $14 billion, you’d want to know what you’re getting for it. Not Liberal Finance Minister Bill Morneau.
Last fall, the CEO-turned politician cut a range of business taxes — totaling $14 billion.
And the only economic analysis Canadians got was the minister’s press release claiming “these measures will help attract business investment to Canada, creating and protecting jobs in Canada”.
It’s Morneau magic, not math.
No chart, table, graph — not even a spitball guess. He won’t show his models to back his claim that billions poured into corporate coffers will end up in workers’ paycheques. He’s a former CEO giving $14 billion to CEOs, backed by no data. And it’s nothing new.
Corporate and capital gains taxes have been slashed
The Chretien Liberals and Harper Conservatives together cut corporate taxes nearly in half — from 29 per cent in 1999 to 15 per cent today.
Chretian doubled the tax-exempt portion of capital gains — such as money earned from stock investments — to 50 per cent, a change maintained by the Martin, Harper and Trudeau governments. Recently, Jagmeet Singh’s NDP has proposed to reverse the change.
The Canadian government has never given the Canadian people any economic assessment of the benefit to them from tax cuts for corporations and the richest Canadians.
And there’s no end in sight. Over and over, we’re asked to take it on faith that, through some unexplained magic, giving more money to corporations and wealthy people will end up in the paycheques of working people.
Like your math teacher used to say, show me your work.
Health care, vets, housing all being pinched
While the benefits of corporate and capital gains tax cuts to Canadians remain mystical, the costs are practical. Tax cuts for corporations and wealthy Canadians have dramatically lowered federal revenues — from about 17 per cent of GDP to about 14 per cent, according to data from Canadians for Tax Fairness.
It’s having an impact on everyday life. Harper and Trudeau cut health care transfers and took on legal fights to deny veterans’ pensions and benefits. And despite Trudeau’s PR push and people’s rising need, federal affordable housing investment is about the same now as in the Harper years, according to a Parliamentary Budget Officer report.
In a recent Gamechangers podcast interview, Toby Sanger, economist and executive director of Canadians for Tax Fairness, called corporate tax cuts a “multi-hundreds of billions of dollars experiment that has effectively failed.”
Despite Sanger’s assessment, it seems elite support for corporate tax cuts continues — more as an article of new religion faith than reason.
Trump and Kenney continue give-aways
Corporate tax cuts were one of the top priorities of the new Alberta Conservative government, which quickly put $2 billion into corporate coffers. But even the new Alberta energy minister recently admitted investment in jobs hasn’t increased.
And not to be excluded from policies without evidence, Trump’s tax cuts resulted in a boost in share prices rather than investment in jobs.
In the Trump case, someone did do the math — and, despite Morneau’s magic, tax cut money for corporations and wealthy people doesn’t flow to paycheques. It stays with corporations and wealthy people, just like it is rational to expect.