A Commentary by Doug Draper
Imagine the complete and utter stupidity of a political leader granting a company millions of dollars in tax breaks with no strings attached and no guarantee that the company will create a single new job, let alone keep its operations in the country that was so generous to it.
Well, you don’t have to imagine it. Look no further than Canada’s Conservative Prime Minister Stephen Harper who, with our tax dollars in hand, went to a manufacturing plant in London, Ontario in 2008. While there, Harper hand Electro-Motive (later the Caterpillar Corporation) that was running the plant about $5 million in tax subsides, only to have Caterpillar, which is swimming in record profits, close the plant this February and put more than 450 Canadians out of work.
And where was Harper this past January while workers for the Caterpillar plant were out on the street fighting for their jobs? Where was he after the corporation shut them out for refusing to accept a bid to reduce their benefits and chop their wages by up to 50 per cent and was already preparing to move its operations to a town in Illinois that has been devastated by the previous losses of manufacturing jobs and whose residents are now so desperate for work they will do it for wages that are dirt cheap. Why didn’t Harper come back and visit the workers on their picket lines and demand that Caterpillar reimburse the tax subsidies if they threw the jobs of these Canadians in a trash bin and left the country.
Instead, Harper was overseas in Switzerland at an economic forum, discussing the possibility of cutting pension assistance for millions of Canadians approaching retirement age. And in a move that didn’t receive much attention in the mainstream media, he and his Conservatives cut corporate taxes in Canada by another $3 billion.
Once again, this latest round of corporate tax cuts, like those the Harper Conservatives add the Liberals before them have rolled out over the past decades, are across-the-board cuts with no strings attached. In other words, corporations enjoy the cuts whether they use them to create jobs or feather the pockets of their own executives and shareholders, even while they are plotting to relocate their operations in regions of the world where they can get the job done for sweatshop wages.
The argument that the Harper government uses, and that provincial governments, including Ontario’s current Liberal government, use, that lower taxes for corporations will trickle down and mean more jobs for the rest of us doesn’t hold. Successive federal governments have lowered the corporate tax rate to about half of the 28 per cent they paid a decade ago and where are all the jobs? Our federal and provincial governments have cut corporate taxes over and over again and we are suffering through some of the highest jobless rates since the Great Depression of the 1930s.
To make matters worse for the rest of us who make up the 99 per cent, cutting corporate taxes means less revenue coming in to cover the costs of health care, education, seniors’ pension and other social programs. It inevitably leads to cutting these programs for people in the middle and lower end of the income ladder.
Why don’t our governments have the smarts and the courage to say to corporations that they are only going to give tax breaks to companies that show a track record of creating jobs here in Ontario and Canada? Why don’t they have the guts to come out and say what U.S. President Barack Obama said in his State of the Union address late this January?
“If you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it,” said Obama in his address. “No American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here. … My message is simple. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I’ll sign them right away.”
I know we have a few politicians leading opposition parties in Canada, like the Ontario NDP’s Andrew Horwath, who are talking like that, but we don’t hear that from Harper, Ontario Liberal Premier Dalton McGuinty or any other of our government leaders. And maybe it doesn’t come down so much to stupidity on their part.
It may have more to do with the fact that they more interested in giving tax breaks to the rich and powerful, including those who donate to their election campaigns, than they are in adjusting tax system in ways that encourage the creation of more good-paying jobs in this country.
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