Summary:
The cited article is a brief update on the current corporate tax cut dispute that is occurring amongst the federal government of Canada. Currently, the federal government is pursuing the final phase of their 5 year corporate tax cut plan, but is seeing strong opposition by the Liberal party. The reasoning behind the federal government’s decision on decreasing the corporate tax cut was to create more jobs and investment opportunities in Canada, boosting the economy. However, the liberal party disagrees with the federal government and claim that “the tax relief is no magic solution for stoking job creation and increased investment” The liberals are now securing a firm ground on opposition to the new plan in a possible election concerning this, noting that this is not the correct approach when the federal government is still in a deficit.
Connections:
The current struggle for the correct approach on the corporate tax system is a viable example for the key concepts engraved in chapter 4 of our economy textbook, which is about the overall involvement and actions of government in the economy. Since taxation is one of the more notable controls of the government, it is elementary to see the connection between the article and the concepts involved. Further analysis could be made on the difference between the federal and provincial, yet another core concept of the chapter. It demonstrates how provincial governments do not have any power in this struggled to control the corporate taxes. Provincial governments are more responsible for the healthcare, and education of their own assigned region, rather than affairs that concern the country as a whole.
Reflection:
This article was a very good example to show the involvement and struggles of government intervention in an economy. In my opinion, it gives more depth to the final decision that governments make, whether you agree or disagree with them. It shows the consideration and care that goes into the final decision of the government. Referring back to the argument about decreasing the corporate tax, I would have to side with the proposition against the decrease of corporate tax. I am not convinced that merely decreasing the amount of tax a corporation must pay will increase their willingness to hire more employees; it is indeed no magical solution for creating jobs in my opinion.
