Monday, October 04, 2010

Tory tax cuts or iffy grit spending

I prefer corporate tax cuts. iffy prefers massive new entitlements.

The Liberal leader talks about deficit reduction but this is a chimera — he is committed to rolling out social programs that will add to the deficit unless he raises more revenue — presumably by rolling back the corporate tax cuts. An alternative could be to cancel the F-35 fighter jet program but Mr. Ignatieff knows that no responsible Canadian government could hand over the policing of its airspace to the United States.

On the other hand, the Conservative government is selling Canada as a low tax environment in order to generate more investment, in order to hasten the flight from deficit. The federal corporate tax rate is set to drop from 18% to 16.5% next year and then to 15% the following year. Many of the provinces appear to agree with the feds, since they are reducing their own corporate rate to 10%, with the intention of giving Canada a 10-point tax advantage over the United States.

The Liberal leader has set up a false dichotomy in his depiction of spending on either seniors or giant corporations. The real choice is between spending money we don’t have or investing in the future.

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