Or are those goals too lofty and would $500 million be enough?
OK. How about 6 billion dollars? What could that do to alleviate the suffering of Canadians?
I know you’re waiting for me to say that’s how much money the Conservatives are wasting on prisons and pork. You would be right about the waste but wrong on where I’m heading.
Because that is how much money the Canadian taxpayer gives to the American treasury every year. A gift with nothing in return, because we ask for nothing in return.
I’ve written of this before, but yesterday, Munir Sheikh had an op-ed piece in the Globe: A Canada-U.S. tax gap means a Canada-U.S. tax transfer
Under Article XXIV of the Canada-U.S. tax treaty, any U.S. citizen, resident or company earning income in Canada is subject to U.S. tax, with a credit for Canadian tax paid or accrued.
This means that our lower corporate tax rate is not an incentive for American companies to invest in Canada, because there is no net benefit. Any savings here are paid there.
A rough estimate concludes that there is a “$500-million annual tax transfer from Canada to the U.S. for every point reduction in the Canadian tax rate.”
Their corporate tax rate is 34.2% and Harper and Flaherty are attempting to reduce ours to 15%, roughly half. And under the current agreement, the difference goes directly to the American treasury. $500 million annually for every point difference.
The Conservatives and their think tanks are suggesting that our public healthcare system is no longer sustainable. But it could be, if we kept some of that money here.
Erin Weir of the Progressive Economic Forum, has estimated ‘that Jim Flaherty’s target of a 25% combined federal-provincial corporate tax rate would transfer between $4 billion and $6 billion annually from Canadian governments to the U.S. treasury.”
4 to 6 billion annually. Absorb that for just a moment. Now absorb this.
Under Stephen Harper Canada has gone from sixth to 24th place in infant mortality, out of 26 nations. In a country with our wealth, our infants are dying at a faster rate than many poorer nations. What could 4 to 6 billion annually do to reverse that?
We have seniors living in poverty and Baby Boomers aging into poverty. What could 4 to 6 billion annually do toward changing that?
One in ten Canadian children live in poverty. This increases with aboriginal children, where one in four are growing up poor. What could 4 to 6 billion annually do toward changing that?
According to a new report: Hunger on the rise in Canada. What could 4 to 6 billion annually do toward changing that?
Neoconservatives, like Stephen Harper and Jim Flaherty, believe that if we jsut work hard, we too can become rich. But that’s not true. Generational poverty, unemployment, underemployment and precarious employment, keep too many living day to day. Paycheque to paycheque. Pension to pension.
According to a study by the Ontario Institute of Foodbanks, in 2008:
Where the economic roots of poverty show up in low levels literacy, skills and educational attainment – all of which impede productivity and the ability to earn income – growing up poor can, in turn, deprive children not only of the nourishment, health and family resources than enable learning, but of the sense of self-esteem needed to succeed in school. Layered on top of these family-based roots of poverty are a variety of systemic and institutional obstacles that help to keep many people poor.
And the “The remedial costs of poverty related to health care and crime are substantial.”
Yet the Conservatives law and order agenda, provides nothing to fight poverty, one of the root causes of crime. And nothing to tackle illiteracy, one of the root causes of poverty.
In fact one of the first actions of John Baird when he was head of the Treasury, was to cut funding to literacy groups.
Ontarians were not surprised. When he was with the Mike Harris government, he tried to write into our welfare program, a clause that would disallow benefits for those who were unable to read or write. It was so outrageous that it made the New York Times.
The notion of corporate taxes having a trickle don affect is not new. It was tried in Canada before Harper. At the time it was thought of as plausible, now it is only laughable.
There is no trickle down, only a gusher upward to the wealthiest citizens.
And corporations do not reinvest the money to create jobs. They hoard it. And they use it to buy our media, with a gaggle of “journalists” (?) who try to sell us on the notion that this fairy tale is real.
And in the case of Canada, the money not hoarded or used to manipulate public opinion, is flowing South.
So the next time someone tells you that corporate tax cuts create jobs and expand our economy, you need to take them by the arm and lead them to the nearest rehab.
But on the way, vote and vote wisely.
Because I can think of so many better ways to spend 4-6 billion annually