Profitable Canadian businesses are set to reap $2.85 billion in additional income tax savings in 2012, even as Prime Minister Stephen Harper complains about all the private “money sitting on the sidelines.”
The last of five annual corporate tax cuts took effect Sunday, reducing the federal rate by another 1.5 points to 15 per cent.
The move comes as corporate Canada, from multinationals to midsize businesses, squirrels away hundreds of billions of dollars as it rides out a second storm of global economic turbulence in the past three years.
The latest figures from Statistics Canada through the third quarter of 2011 show Canadian business sitting on more than $583 billion in Canadian currency and deposits, and more than $276 billion in foreign currency. Read More…
It’s funny that so many corporations have so much cash on hand but yet dont want to use it. Why? Because as the article says they are looking for the right times to put it into the market to generate the best returns. The way to stimulate the economy is then to increase government spending which has continually shown to boost the economic environment as whole.
Tax cuts for corporations tend to only benefit the few at the top and nothing more.
I guess Canada is no different than America since these tax cuts are just going into the pockets of corporate execs by way of swollen bonuses.
Canada is looking more like having a regression tax system like it is in the States. Not good. Why doesn’t Harper just cut the rate to 0% and see mass pay days and no economic growth so we can get to it already?
I would love to get my marginal tax rate cut to 15% and then bank $2.85 billion. So remind me again what the point of tax cuts are?
Even if you cut the rate down to 0% businesses will still have no incentive to put that money into the economy. Why would they? Businesses have no loyalty to their home country. They have no emotions.
I am a long time conservative and even i am a bit puzzled by what is happening. I feel it is merely a matter of time and things will turn around.
This is proof once agian that Conservatives are worthless in power. When you apply simple commonsense one can clearly see that companies have no reasons to use those savings in a market when no one is interested in buying.
Enough with this nonsense. Increase government spending. Lead economists and history shows that the economy improves NOT from endless tax cuts but on government spending. Is it so hard to pick up a book and read the facts?
Hey i know a solution: More tax cuts! You just know Stephen Harper is going to propose yet another round of cuts in 2012.
In the US they have a repatrioting clause that allows companies to pull all their money they have stored in tax heavens outside the US and bring that money back into the US by dropping their corporate rate to a jaw-dropping 5%. They’ve done this every 5 or so years and every single time all the companies did was have giant bonsues for their top employees (usually the top 3) and layoff workers.
Tax cuts is a silly way out of a problem.