An article in Canadian newspapers today documents the investigation into the accuracy of Steven Harper's conservative government's proposed six billion dollars in spending cuts to fix the budget.
Ottawa's Financial Post is reporting that the Canadian Center for Policy Alternatives has release a study based on business investment and cash flow from 1961 thru 2010, countering the conservative government's claim that corporate tax cuts are a boon for the economy.
The numbers for the Canadian government taxation trends very much resemble the steady decline in Corporate taxes America's largest companies have been getting.
"Business fixed capital spending has declined notably as a share of cash flow since the early 80's- despite repeated tax cuts that have reduced the combined federal-provincial corporate rate from 50% to just 29.5% in 2010." said economist Jim Stanford.
According to the study, (remember this is Canada) a three point reduction in the corporate tax rate would cost $6Billion dollars a year while only garnering $600 million in stimulation of new business investment annually.
"If the federal government spent $6Billion on public infrastructure instead of corporate tax cuts, the total increase in investments would be more than ten times as great as the increase in private investment from tax cuts alone." Stanford writes.
Also cited in the article was a previous study by the center concluding that Canada's largest publicly traded corporations made 52% more profit in 2009 than in 2000, while paying 29% less in taxes.
It seems the same things are being tried by the Steven Harper gov't up here, at least they have an organization that has enough credit with the media to respond to the propaganda of the right.