Big news today that Burger King, a US company, is planning to buy Tim Horton’s, a Canadian one. This is another in a string of “tax inversion” deals where US corporations move their corporate headquarters from the US to elsewhere to avoid US taxation. They don’t actually change anything or move anyone outside of their accounting fairyland. Instead, they just check some different boxes on their income tax forms and ‘poof’ save millions in taxes.
Entries Tagged as 'Taxes and Tax Cuts'
August 25th, 2014 · David Macdonald · corporations, Economy & Economic Indicators, Taxes and Tax Cuts
The Fraser Institute’s annual Consumer Tax Index report generated some media buzz with its outlandish claims about just how much taxes have risen since 1961. Before you get worked up about this, consider that 1961 was over half a century ago, before the time of universal health care that we all benefit from, before the Canada Pension Plan and the Guaranteed Income Supplement that hugely reduced poverty for seniors, before the Canada Child Tax Benefit which is helping lower child poverty (though not enough!).
There are big problems with the Fraser Institute report’s methodology which lead them to grossly overestimate the tax bill of the average Canadian family.
August 19th, 2014 · David Macdonald · corporations, Economy & Economic Indicators, Taxes and Tax Cuts
Corporate Canada has reached a milestone in 2014. For the first time ever, it is now hoarding more cash than the national debt. What that means is that in one fell swoop, Canada’s corporations could pay off our entire national debt with just the cash sitting in their banks accounts, nevermind their other assets.
Corporate cash hoarding really ramped up as corporate tax rates were slashed in half from 31% in 1997 to 16% today. Corporate Canada argued in the late 1990s that they’d use that extra cash to build more factories, train more workers and make Canada more productive. Turns out … not so much.
An adult conversation about taxes is beginning to take shape.
Way back in 2009, CCPA research associate Hugh Mackenzie published an editorial in the Toronto Star entitled “Can we have an adult conversation about taxes?”– a challenge to governments to start looking at their revenue problems in a grown up way.
This week, the Globe and Mail has published an important piece by C.D. Howe Institute Research Fellow Chris Ragan, pointing out, lo and behold, that Ontario has a revenue problem, not a spending problem.
There was a lot of chatter about Ontario’s credit rating last week when, in a not-so-surprising move, Moody’s Corporation changed Ontario’s debt outlook from stable to negative.
Let’s be clear, this was not a downgrade in the credit rating, as some of have suggested. It’s more like the equivalent of a sad face emoticon – one way a credit rating agency has to express displeasure.
It was a statement made one day before the newly elected provincial government was set to deliver its Speech from the Throne – a speech that didn’t waiver from the promises made during the provincial election campaign that yielded this government a majority mandate.
June 24th, 2014 · Trish Hennessy · Economy & Economic Indicators, Ontario, public services, Taxes and Tax Cuts
It seems like every newly elected Premier in Ontario who wins on even a slightly progressive platform feels like the first step in office is to help the boys on Bay Street relax.
And so it is, perhaps, that Premier-elect Kathleen Wynne came out of the gates post-election with two primary (albeit mixed) messages: she’ll promote an activist government but “there’s no new money” for even modest raises in the public sector.
Here’s the thing: a broad swath of commentators agree Wynne managed to do the unexpected by securing a majority government.
June 9th, 2014 · Trish Hennessy · Education, Employment and Labour, Health Care, Income Inequality, Ontario, Poverty and Income Inequality, Taxes and Tax Cuts, Uncategorized
The Ontario election is nearing its end and by Thursday night we will know the makeup of the next provincial government.
In some ways, this election featured a lot of substantive debate and policy discussion. For instance, a lot of focus was placed on the relative merit and credibility of the party platforms (and costing of those platforms).
On the other hand, a lot of important issues didn’t get much air time.
Both before the budget was tabled and during its presentation, Finance Minister Carlos Leitão spoke of “rigour” and “responsibility,” but never used the term “austerity.” Yet, this is truly an austerity budget: many government departments will be receiving less next year than they have this year. Here is a summary of the budget cuts:
On Tuesday, the Parliamentary Budget Office released their long awaited costing and distributional analysis of the tax measures implemented since the Harper government has been in power. In essence, they asked what is the cost of these tax cuts, who benefits, and to what degree.
The Price Tag of the Tax Cuts
The total cost of the tax cuts implemented by this government is $30.4 Billion in 2014 ($17.1B on the income tax side and $13.3B from the GST/HST cuts). This is in addition to the cuts to the federal corporate income tax, which the PBO report did not look at but Jim Stanford has estimated to cost around $13 billion in annual revenue.
When it comes to attracting and supporting businesses in Ontario, there’s one thing missing from the election platforms of Ontario’s three main party leaders: an acknowledgement that tax cuts don’t work.
Progressive Conservative Leader Tim Hudak promises a 30% cut to the corporate income tax rate in Ontario. The rate would decrease from 11.5% to 8%.
NDP Leader Andrea Horwath promises to reduce the small business tax to 3% (it currently sits at 4.5%) and offer a $5,000 tax credit to business for each job created in Ontario.