Given that recent reports have helped to puncture the myth of job-creation benefits arising from corporate tax cuts and corporate welfare, I was pleased to read Martin Regg Cohn's article in this morning's Star.
Entitled NDP leverages vote results to pressure big business to create jobs, the article discusses the current popularity of the provincial NDP in Ontario. Leader Andrea Horvath used her leverage in the last budget to both secure a tax hike on the income enjoyed by the wealthiest Ontarians and prevent another scheduled corporate tax reduction; the party also blocked Premier Dalton McGuinty's ruthless bid for a majority government in this month's by-election in Kitchener-Waterloo through the victory of NDP candidate Catherine Fife.
As Cohn reminds us, she also won McGuinty's pledge to look seriously at a job-creation tax credit that would reward companies for increasing their payrolls. Horwath argued her $250 million program, modelled on a similar U.S. plan, would deliver better value for taxpayers' money that is now doled out to corporations with no strings attached.
That pledge is about to come to fruition through McGuinty's new Jobs and Prosperity Council, chaired by Royal Bank CEO Gordon Nixon, hardly likely to be favorably disposed to such a notion. As Cohn makes clear, Nixon embodies the corporate welfare and tax leakage that the NDP condemns: Canada's banks benefited handsomely from a series of Liberal corporate tax cuts, reaping record profits without creating the kind of high-value jobs that merit taxpayer subsidies. He has, however, promised to hear Horwath out on her proposal
Let us hope that a clash of ideologies does not prevent some productive recommendations from emerging. I suspect that ignoring increasing public awareness of the injustice of unproductive tax cuts could prove politically costly to the beleaguered McGuinty.
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