The Great Revenue Robbery by Richard Swift

Author:Richard Swift
Language: eng
Format: epub
Publisher: Between the Lines
Published: 2013-03-14T16:00:00+00:00

At the same time, many provincial governments reduced their own statutory tax rates (often pressed by companies that threatened to relocate their reported profits from one province to another to take advantage of interprovincial tax differences). The combined federal–provincial statutory rate declined from almost 50 per cent in the early 1980s to 29.5 per cent in 2010 and will fall to an estimated 25 per cent if all planned provincial reductions are fully implemented.8 Combined federal–provincial statutory tax rates will thus have been cut in half by 2013, compared to the early 1980s.

Due to the impact of various deductions and loopholes, the effective tax actually paid by corporations can vary significantly from the theoretical statutory rate. An approximate effective tax rate can be estimated by dividing the sum of direct taxes paid by business by the pre-tax profit base. To reflect the lag times in processing and submitting tax returns, we divide taxes paid by the previous year’s before-tax profit.9 This effective tax rate is almost always lower than the statutory rate. It is interesting to note that the effective tax rate did not decline noticeably following the 1988 tax reform (which simultaneously reduced the rate and closed loopholes, apparently with little net impact on taxes paid). However, the effective rate did begin to decline following the Martin cuts of 2001, gathering pace with the additional across-the-board rate cuts implemented by the Harper government. The Harper rate reductions applied to a broader class of businesses than either of the previous reforms and hence translated more powerfully into a lower effective tax rate.10

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.