Tories must abandon corporate tax cuts

The global recession and recent policy decisions made by the federal Conservative government have combined to create the largest fiscal deficit in Canada’s history, and difficult choices must now be made in the coming budget that will have huge repercussions throughout our society for decades to come.
Can the Harper government shake off its neo-conservative ideology that favours massive deregulation of industry and corporate tax cuts, or will they insist upon repeating the unfortunate mistakes made by our neighbours to the south?
Up until now, federal Finance minister Jim Flaherty has proven to be a reliable adherent to the same failed neo-conservative ideology that has brought down the once mighty U.S. economy and crippled their federal government.
The basic tenet of Mr. Flaherty’s neo-conservative economic theory is that government is bad and its role in society must be reduced in favour of private enterprise. Deregulation of industry and across-the-board corporate tax cuts have been the preferred methods for reducing the role of government by neo-conservatives like Mr. Flaherty for some time.
Unfortunately, history repeatedly has shown that when conservative administrations win power in industrialized countries like ours, and deregulation and corporate tax are enacted, the net result more often than not is a serious economic crisis of one kind or another.
The repeated failings of neo-conservative movements, and the precarious state of the Canadian and global economic recovery, are the reasons why our federal government must cut the ties that bind them to their failed ideology and unproven economic theories.
For evidence of these ideological failings, they should look no further than the example that is the United States today.
At the same time as their financial system was nearing a meltdown due to the deregulation of the banking system, and the unchecked lending and borrowing practices of their institutions, the Bush administration was introducing more than $1 trillion in corporate tax cuts which they claimed would fuel growth and create jobs throughout our lifetime.
It was a great theory, but it really hasn’t panned out as more than two million jobs have been lost in just the last two years.
The end result of this failed neo-conservative economic experiment is a weakened U.S. banking sector, stagnant economy, and a federal government near bankruptcy which now must roll back the massive tax cuts of the last several years or make cuts to cherished social programs like Medicare and Old Age Security.
It is no secret in Ottawa or elsewhere that it was the twin policies of deregulation and indiscriminate corporate tax cuts are what has crippled the U.S. economy and I want to make sure that the same does not happen here.
To this end, my New Democrat colleagues and I will be looking for Mr. Flaherty to abandon at least one of the so-called “sacred cows” of the neo-conservative movement in his coming budget and eliminate the huge corporate tax cuts that are scheduled to come into effect between 2010-13.
It is simply irresponsible to bring in this $60-billion corporate tax cut while the federal government is running massive deficits and while our existing corporate tax rate is lower than those in the United States and most “Euro Zone” countries.
If Mr. Flaherty cannot abandon his neo-conservative ideology and insists upon implementing this massive corporate tax cut, then he does do so knowing they must be financed by massively increasing our national debt on the backs of our grandchildren, or by cutting back on funding for essential services like health care, national defence, and post-secondary education.
Given the precarious state of the global recovery and the structural deficit of $18.9 billion that they have created to date, I believe Mr. Flaherty and the Conservative government have no choice to but to exercise fiscal discipline in the coming federal budget and eliminate the costly and ineffective $60 billion in corporate tax cuts that are set to come into effect over the next three years.
I have no doubt that restoring fiscal discipline and cancelling these tax cuts will prove to be a difficult choice for our neo-conservative finance minister, but it would, without question, be the most responsible decision for Canadian families, today and tomorrow.

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