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Why corporations don’t need more Harper corporate tax cuts

Harper and Flaherty and the rest of the Conservative government continue to insist that we need to keep giving corporate tax cuts to large corporations despite the deficit situation we are in. Otherwise, they won’t be able to produce jobs. In otherwards, they’re continuing to use a version of Reaganomics trickle-down theory ( or as others call it, the horse and sparrow theory).

Here’s an example of why a lot of Canadians aren’t buying this. On January 1st of this year, the corporate tax rate dropped – from 18% to 16.5% I believe. One month later, a couple of the major big banks did some trickling down all right – trickling down fee increases on their customers.

Here’s what’s changed at Scotiabank, effective Feb 1.

The monthly charge for a basic banking plan went up to $8.95 from $7, a 27 per cent increase. The minimum account balance needed for free transactions fell to $2,000 from $2,500. At the same time, the number of debit transactions covered by the monthly fee fell to 25 from 30. The monthly fee for the Scotia One Account, which offers unlimited number of transactions went up to $11.95 from $9.95, a 20 per cent increase.

At CIBC meanwhile, they’ve added charges to getting bankbooks for certain accounts, certain internal transactions will now have fees that didn’t before, and other fees are also increasing.

All of this is deemed necessary by the banks because it’s what other banks have done, and because they’re trying to adjust to online banking. That comes as Scotiabank just earned a 1.1 BILLION $ profit in the 4th quarter of 2010., and CIBC “only” earned half a billion dollars last quarter. These are just 4th quarter earnings.. look at the whole year for these 2 banks (and other banks) and you’ll see their profits for all of 2010 were probably in the couple to several billions of dollars; and yet they decide to increase rates and fees on their customers even more?

Harper and Flaherty wants to give further corporate tax cuts to big corporations like this; despite the deficit, and despite the fact the only thing they seem to be doing is ensuring they make even more profits for themselves on the back of their customers and the Canadian taxpayer. This is plain dumb, and Canadians can see it’s dumb. The point needs to be kept hammered at over and over again.

4 comments to Why corporations don’t need more Harper corporate tax cuts

  • Stan

    So now three banks compose our entire corporate economy?

    You need to get out more.

  • Tomm

    Scott,

    I can fully appreciate your needing to add your voice to the New Liberal Choir (not shared by those old stodgy Liberals like Manley, Martin and McKenna… but I digress); politics aside, let’s talk about impact.

    If our business taxes are near the middle of, or slightly below our competitors, it may have the effect of bringing new investment into Canada. Our relatively stronger survival during the last 3 years is a strong correlate with this.

    The path has been advertised, built into strategic business plans and part of corporate decision making since 2005. By cutting it off here (1-2% short of advertised goal) is a spiteful piece of retail politics and nothing but.

    Go ahead and try to sell it. I am hoping that Canadian’s see through the crust and into the self serving nature of this rhetoric.

    • Redrum

      @Tomm, you have the effrontery to accuse the _Libs_ “retail politics” in the same 24-hr. news cycle that the Cons. are floating trying to jury-rig the federal gas tax rules to allow them to subsidize an NHL hockey rink in Quebec to salvage their MPs seats in the next election? Puh-leeze. And as the senior StatCan economist who studies corporate matters announced a bit ago, the amount of taxes we’re talking about here barely makes a difference to corporations’ planning purposes — so much so that StatCan doesn’t even bother to track it. So that fear-mongering about how it’ll throw a monkey-wrench into things is just Chicken Littling.

  • Good post Scott. One more “kicker”, the CEO of said bank gave himself a 5.6% pay increase to 11 million per, while at the same time they are raising charges on the consumer. The disconnect is alarming!

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