Bylo Selhi wrote:1. Canada is not the economic basket case that Ireland et al are (in large part thanks to the tough measures FM Martin took 15 years ago.)
True. But a country doesn't have to be an economic basket case to benefit from much lower corporate income taxes. I listed a few arguments upthread. None of them depend on being an economic basket case.
2. Canada is not in a "debt crisis"
True. But see NormR's comment upthread. Anyway, the real debt crisis is developing at the provincial level -- Ontario and Quebec already have some pretty scary levels. With an aging population and growing health care costs, it's going to get much,. much worse. We need all the productivity-enhancing measures we can get (Canada is a laggard in productivity and this is a serious problem).
3. Ignatieff isn't calling for a rise in corporate income tax rates. He's calling for a freeze on previously-announced cuts....
That's just semantics. The key point for me is that the Conservatives are promising lower tax rates than the Liberals.
...Why? Because we don't need them and because we can't afford them (thanks to 2.)
Yes, we need tax increases (as per the discussion above). But we should get them from those taxes that do the least harm. I think that there is general agreement that consumption taxes such as the HST are top of the list. So let's reverse the HST tax cuts, with minimal damage, instead of of corporate taxes, which are much more damaging.
Another possibility is a meaningful carbon tax. That would raise revenues AND help the environment by cutting down on use of energy, which has significant negative externalities. But I suppose that has become the third rail of politics for both the Liberals and the Conservatives.
4. Canada's corporate tax rates are already among the lowest, if not the lowest, in the G-8. We already have a competitive advantage on corporate tax rates.
Same for Ireland.
Having "competitive" corporate income tax rates is desirable, I suppose, but contrary to what the Conservatives are saying, it's not a very strong reason for cutting corporate tax rates. (Creative transfer pricing usually lets profits pop up in the least taxed jurisdiction anyways.) The strong reason, in my opinion, is that it is a very distorting tax, deters productivity increases, and leads to waste of society's resources.
I should mention that equity considerations are also very important. Often corporate taxes are shifted, and ultimately paid, by the middle class and the disadvantaged (who have little bargaining power when selling their labour).
The plural of anecdote is NOT data.
In God we trust, all others bring data (William Edwards Deming)