Stop the Corporate Tax Giveaways

Corporate executives in Canada will be dancing in their suites and celebrating Corporate Tax Freedom Day on January 30. A CLC research report shows that by that date corporations will have paid their entire share of taxes for the year to all levels of government.

Corporate income taxes in 2011 amounted to only 8.3% of all government revenues, down from 8.8% in 2010 and an average of 11% in the 1960s and 70s. In return for tax breaks, companies are supposed to be investing their windfall, but studies have shown that rising corporate after-tax profits are not all invested in increased productivity and the creation of good jobs in Canada.

There were 1.35 million unemployed Canadians in December 2012 compared to 1.1 million unemployed in October 2008, just prior to the recession. Today’s unemployment rate of 7.1% remains well above the pre-recession rate of 6%.

The federal corporate tax rate has dropped from 28 per cent in 2000 to 15 per cent today.  Provincial rates have also declined, but not as dramatically.

Between 2001 and 2011, the total cash reserves of private, non-financial private corporations in Canada grew from $187 to $575 billion.

Between 2010 and 2011 alone, there was a one-year increase of $72 billion in cash reserves. This is a figure more than double the entire $33.4 billion federal government deficit for 2010-11.

Click here to read more about corporate tax giveaways.