MacKinnon on raising taxes

MacKinnon on raising taxes

It really is a shame that Janice isn’t running in this election.

While Jack Layton and the federal NDP are proposing to raise taxes on corporations and high-income earners, NDP governments, like the one in Saskatchewan, have lowered taxes on income and on corporations, including making significant cuts in oil royalties. What’s the difference?

The federal NDP still clings to the traditional NDP line that everyone, including corporations, should pay their fair share of taxes. What is lacking is an acceptance of the realities of having to run governments in a global, market economy.

 Today borders are open and corporations and high- income earners can move their assets, income and operations to another jurisdiction if taxation levels become excessive.

 When I was Saskatchewan finance minister between 1993 and 1997, the NDP government cut various corporate taxes based on models done by the finance department that showed that the specific tax cut would lead to more jobs and more government revenue — in every case, the model proved to be accurate. In the case of oil, beginning in 1993 the government made various royalty rate cuts and the effect was to raise government oil revenue from less than $200-million in 1992 to almost $700-million by 1996. The biggest fight was an internal one with the left-wing of the NDP, which opposed each and every tax cut!

 The sad irony is that in many cases raising tax rates is not only bad public policy, it will often not even bring in any new money.

 It is merely feeding cynicism about politics when a party suggests that voters could have dramatic increases in social spending at no cost to themselves if governments only raised taxes on corporations and high-income earners. Elections should be about real choices, not phantoms.

From the Globe and Mail

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