HST fits long pattern of tax cuts for business
Days before we vote in the HST referendum and either accept or reject a massive, $2 billion tax-shift from businesses to families and individuals, we should re-examine the array of business tax cuts the Campbell-Clark Liberals have instituted over the last decade.
In the summer of 2001, weeks after winning the general election, the B.C. Liberals slashed the corporation income tax rate from 16.5 per cent, to 13.5 per cent. It stands today, after four further reductions, at an even 10 per cent. The revenues lost to the provincial treasury from these corporate income cuts: approximately $650 million, each and every year.
The corporation capital tax also was narrowed and reduced in 2001, and then abolished entirely in 2009. At one time it generated more than $400 million annually.
The sales tax was removed from production machinery and equipment in 2001 at a cost of $160 million, each and every year. That exemption was expanded in 2002, at a further cost to the provincial treasury of $15 million annually.
In 2008, the B.C. Liberals slashed the school-tax rate for large industries, and in 2009 they provided a new tax credit for major industrial and light industrial properties. The former move cost the provincial treasury $24 million annually; the latter, $52 million.
Space does not permit an exhaustive listing of all the tax cuts and reductions handed over to the business sector by the B.C. Liberals over the last 10 years. The list is lengthy and costly.
$12 billion already given away, for what?
The B.C. Federation of Labour has prepared an analysis that calculates revenue losses for the provincial treasury since 2001 from reductions in the corporation income tax rate alone at between $7.7 billion and $8.5 billion.
The total cost of all of the B.C. Liberal corporate tax cuts over the last decade may only be estimated; it almost certainly is no less than $12 billion.
Again, what did British Columbians get for this massive expenditure? We clearly didn't gain the new jobs as promised, because the B.C. Liberals' record on job creation over the last five years has been no better or different than the provincial average since 1980.
Despite spending billions of dollars on corporate tax cuts, the B.C. Liberals created no more jobs in the last decade than did Social Credit in the 1980s or the New Democratic Party in the 1990s.
The Harmonized Sales Tax is yet another in a long, long string of corporate tax cuts instituted by Gordon Campbell, Christy Clark and the B.C. Liberals over the last 10 years.
Their earlier tax cuts created nary a single new job, so why would reasonable, rational people expect anything different from the HST?
British Columbians should vote YES in the HST referendum -- YES to get rid of the HST, YES to stop the massive, $2 billion tax shift from corporations onto working families, and YES for tax fairness.
And, let's start thinking about how to create new, decent paying jobs.