The Conservatives and the Liberals say their corporate tax plans frame the forthcoming electoral choice - with Conservatives arguing that further cuts are the only path to job creation, and Liberals saying that a return of the rate to 2010 levels is the only way to extend the social safety net.
The parties, divided by 2.5 percentage points, are indulging in the narcissism of small differences. Corporate tax cuts do not create as many jobs, and hikes do not yield as much revenue, as the parties claim. It is important to keep the rate within a low band, so that companies are not pushed to other jurisdictions, and to give them enough certainty to plan their investments.
But taxes - payroll taxes, that is - are going up, by 15 cents per $100 of insurable earnings. It's a modest increase this year: a maximum of $40 for a worker, and $55 for employers for every employee. But a like increase is planned for every future year. Add that across the entire economy, and it's a significant bite into incomes and pocketbooks.
Each of the parties tries to address the problem in their platforms: a premium holiday for youth hires (Liberals, $160-million), a premium credit for small businesses (Conservatives, $165-million), and a payroll-tax rebate for new hires (NDP, $1-billion). But none of these measures helps workers directly, especially lower-income workers struggling with the cost of living. The parties should commit to holding the line on EI premium increases across the board. It can be done without bankrupting the EI system, and it's the best way to help workers, and businesses of all sizes.
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