The Ontario provincial election seems to be turning into a referendum on the 1980s-era economic theory known as “Reaganomics?”
Ontario Progressive Conservative leader Tim Hudak, reportedly on advice from a right-wing Tea Party/Koch Brothers-affiliated economist, is pledging to cut corporate income taxes as a way of creating jobs. According to Hudak cutting taxes on corporations will see the money saved re-invested by companies in new jobs in Ontario.
He doesn't say why the companies wouldn't just report this money as higher income and funnel the profits back to shareholders. But instead Hudak insists that cutting taxes is “biggest bang for the buck when it comes to job creation.” Less right-wing economists attribute the widening divide between rich and poor in America to such policies. Canada’s federal corporate tax rate is 15 per cent. In Ontario, the general corporate income tax rate is 11.5 per cent.
Hudak has pledged to cut the general rate to 8 per cent, a move he says would make Ontario’s business taxes the lowest in North America and would create 120,000 new jobs. Opponents say this is not an effective way to stimulate the economy and call the notion a myth that is unsupported by data.
Experts suggest the rate is already low and point out that companies look at other factors, such as an educated workforce when it comes ot investing in a region—Hudak has announced he will cut the education budget.
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