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While we should be back from our trip tomorrow in time to catch the Ontario election news coverage, this seems an opportune time to remind readers of the kind of magical thinking so favoured by extreme right enthusiasts such as young Tim Hudak. Tim, as you may recall, has made even lower corporate taxes a major part of his plan to create one million jobs, despite the fact that Ontario's rates are among the lowest in North American, and despite the fact that no apparent empirical data supports the equation that lower business taxes create jobs.
Here is a letter from today's Star that I think makes the point rather nicely:
Leaders make one last push as campaign winds down, June 10
The Fortune 500 companies in the U.S. recorded $1.08 trillion in profits last year. That was an increase of 31.7 per cent over the year before. During that time, these same companies increased employment increases of 0.7 per cent.
A similar picture exists on Canada. In 2001 corporate tax rates were 22 per cent. Today they stand at 15 per cent. We’ve lost $6.1 billion in government revenue while corporate profits have skyrocketed to $625 billion.
Tim Hudak talks about creating one million jobs through a lower tax rate. During the Mike Harris years in Ontario this philosophy did not work out very well. The provincial debt during the Harris years went from $90.7 billion in 1994-95 to $130.6 billion is 2002-03. This, while cutting many jobs and services and giving the province the legacy of Walkerton among other atrocities.
Former Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney tried to convince Canadian corporations to spend some of the “dead money” they have been sitting on after accumulating such large profits over the years. To date, the corporations have not responded.
For years, right-wing government leaders from Margaret Thatcher to Ronald Reagan to Mike Harris have been selling the supply-side economic lie. It didn’t work for them and it won’t work for Tim Hudak. A first-year economics student could tell you the reason for this. The rich don’t tend to spend additions to their revenue. The poor do. The rich accululate this money as the corporations in Canada have been doing for years.
In the Conservative attack on Kathleen Wynne on the radio, they end by asking, “Can you afford to vote for Kathleen Wynne?” I am wondering if I can afford not to.
Carl Nelson, Huntsville