Small Disagreement Over Corporate Taxes Isn’t Worth An Election

Ben Eisen, Blog, Uncategorized

I think that we’d be better off with a corporate income tax rate of 15% rather than 16.5%, but is this really worth an election?. Both sides seem to be exaggerating the importance of this relatively small policy dispute. Cutting the rate, as planned, won’t add that much to the deficit and won’t have an appreciable long-term impact on our ability to finance othter priorities. Nor will leaving the rate at 16.5% severely undermine the recovery or Canadian competitiveness.

It’s not a trivial policy dispute, but it isn’t even close to being worth having an election over. NAFTA was worth having an election over, and this ain’t NAFTA. Canadians should expect minority parliaments to be able to work out sensible compromises in situations such as these. Split the difference, set the rate around 16%, and we can relitigate this issue among many others when the next election rolls around.

Update: This version of the post has been updated to correct an error- the current corporate tax rate is 16.5%, not 17% as stated  in the original post. The title has also been updated.