McGuinty’s Business Tax Breaks
Posted by Erin Weir under banks, corporate income tax, Don Drummond, HST, manufacturing, Ontario, Saskatchewan.
February 19th, 2012
Comments: 1
An interesting nugget in last week’s Drummond report is Table 11.1, an updated version of Table 2 from “Ontario’s Tax Plan for Jobs and Growth” (2009).
It provides a sectoral breakdown of the McGuinty government’s recent business tax breaks: HST input tax credits, cutting the corporate income tax, and eliminating the corporate capital tax.
The combined annual cost of these tax breaks, when fully implemented, will be higher than originally estimated: $8.7 billion vs. $8.4 billion.
But they will help the manufacturing sector even less than originally estimated: $1 billion vs. $1.2 billion.
The old table suggested that these measures would be a wash for the financial sector. The HST would apply to some previously exempt financial services while finance companies would pay less corporate income and capital tax.
The new table reveals a net gain of $590 million for the financial sector. In particular, the estimated cost of eliminating the corporate capital tax for banks has jumped from $520 million to $740 million.
Restoring a capital tax for banks in Ontario is looking more appealing. The great Wall of Saskatchewan’s Maoist government, for example, continues to levy such a tax.
Comments
Comment from janfromthebruce
Time: February 19, 2012, 4:26 pm
McGuinty should really follow the Sask lead – instead children and workers will take the hit and the financial sector again, gets a break.
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