Comment 28776

By A Smith (anonymous) | Posted February 18, 2009 at 11:21:18

JonC >> If you're going to reduce the income in you need to reduce the expenses out.

In 1999, corporate tax rates at the federal level were 27%, today they are 19%. In that time period, total corporate tax revenue (all of Canada) has increased 96%, from 33.62B to 65,99B. In 1999, top federal marginal rates on income were 29% and today they are still at 29%. However, from 1999 to 2008, income tax revenue has only gone up 51%, from 127.7B in 1999 to 193.5B.

In fact, if you compare the ratio of corporate tax revenue to income tax revenue, it has gone from 26.3% in 1999 to 34.1% in 2008.

Therefore, rather than getting less money from corporations as a result of cutting their tax rate, the country has gotten more.

>> There is a reason that every city sets tax rates at a certain level. It's not like the city of Hamilton is greedy.

Are you telling me that if tax rates were brought down to 1% and then capped, the city couldn't pay its bills? That is ridiculous. It simply would mean that politicians would have to limit their spending to the basics and budget accordingly, like all private citizens have to. Average people don't have the luxury of simply demanding more money from their bosses, they have to decrease their costs in harder times. The same should be true of government, in good times, set up reserve funds and use those to even out slower periods.

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