Business Tax Rates

hamiltongardener(CAN 6a)December 3, 2012

Canada has been steadily moving to one of the lowest corporate tax rates in the world, recently moving to the eighth most advantageous places to pay corporate tax. Now, that's not just tax rates... that takes into account things like the complexity of the country's tax codes, the amount of red tape, and how difficult it is to file the taxes.

Now, as much as I view this as good news, it makes me wonder exactly how much room there is to raise taxes in Canada. Are we too low? We talk about American taxes so much and raising tax rates there... it seems logical on the surface that Canadian corporation have room to contribute more too.

As some may have noticed, I am a huge advocate of paying down the national debt, I see a country's public debt as one of it's worst enemies. Canad has recently hit the $600 Billion mark in public debt and I am hoping Harper will be able to not just balance the budget, but follow in the previous Liberal government's footsteps and actually start paying off our national debt.

So, is raising corporate tax rates, even just by a bit, the answer to balancing the budget?

Canada has moved up three places to eighth in a global comparison of the most advantageous place to pay corporate taxes, placing the country in the top 10 for the first time.
The annual study by PwC, in conjunction with the World Bank and the International Finance Corporation, shows Canada moving sharply up in a 185-country comparison.
Canada placed 28th as recently as 2010, but continuing reductions of the corporate rate both federally and provincially, as well as reduced red tap, has dramatically improved its standing.

The advance, from a business point of view, coincides with the federal government's efforts to brand a 25-per-cent national corporate tax rate, harmonization of sales taxes in Ontario, and improvement in the easy of filing taxes.
"As far as most countries are concerned, we're actually a pretty friendly jurisdiction," said Jason Safar, a partner with PwC's tax service in Toronto.
"Canada's current tax laws have attractive tax regimes, which impact all companies � in particularly small-medium sized domestic companies."

Here is a link that might be useful: Corporate taxes

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I think we could use some of that Canadian common sense down here. Your government makes setting up shop in Canada very attractive. Heck, if I had a business I wanted to expand, I would be comparing corporate tax rates, and wondering how the US could ever hope to compete with Canada for new corporations and the jobs they bring.

Congratulations to Canada! I've thought for quite a while now that your politicians are far better stewards of your people and national interests than our politicians are of ours. Down here in the states, we're so stuck on stupid, we're going to spend another four years raising taxes and blowing that money (and more) on another round of government "stimulus" schemes.

Along with not being able to compete for new business as we should, we will spend the next four years watching existing businesses struggle or go under. There will be fewer full time employees as businesses seek to stay afloat. One way to cut costs is to cut hours, and move workers to part time. Politicians can define "full time" how ever they like. Employers will simply schedule their workers accordingly, to avoid crossing that threshold. Scheduling more workers may require a bit more work, but the thousands of dollars saved on not buying Obamacare for just one employee ought to cover it nicely. Hiring a part time scheduler might make sense.

    Bookmark   December 3, 2012 at 12:20PM
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hamiltongardener(CAN 6a)

Hmmm... Nik,

Your argument about Obamacare and employee hours actually points to the better alternative of a Universal Healthcare instead of Obamacare... one that's not tied to number of hours or fulltime/parttime employees. That way, workers can't be punished by businesses looking to find ways to avoid paying for healthcare. Score one for single-payer, universal healthcare.

In the meantime, what about debt? Again, lower corporate taxes than most of the world and an unbalanced budget... methinks raising the corporate tax rate a percentage or two could balance the budget while still remaining lower than many of the other countries.

    Bookmark   December 3, 2012 at 12:47PM
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marquest(z5 PA)

The US Business pay less with the tax code being very business friendly.

It is being proposed in the US of lowering the Business tax and adjusting the tax code.

To lower the debt the more money going into the economy is the only way to get the debt down. If we do not have consumers we are never going to pay our debt down. You cannot sustain a business if no one has sufficient income to buy your product. Taxes are the least of the problems.

Here is a link that might be useful: US Business tax

    Bookmark   December 3, 2012 at 1:00PM
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