Everybody benefits from corporate tax cuts.

I do love the above quote from Hayek and use it often. The goal of this post is not to try and reason with socialists. They are as lost cause as far as economic understanding goes. I do want to clarify just who benefits from healthy profitable corporations though as myths and misinformation on that subject are par for the course from defenders of big government. Non wonky people (the majority) don’t really put much thought into where corporate profits go and how they may benefit them. They are too busy working and paying taxes.


While we constantly hear of them and see them in the news, those corporate barons who rake in billions are actually pretty few and far between in the scheme of things.There are not many of them out there and contrary to popular belief they don’t hoard their cash and swim in money bins. They tend to re-invest their profits which of course keeps economic activity pumping.

While they may not know it or like to admit it, union members are some of the biggest beneficiaries of corporate profits

The Ontario Teachers Pension Plan has fantastic growth and is worth a staggering $189.5 billion dollars!

I say good for them.

What has made that plan value grow like that over the last 27 years though? I hate to break it to folks but the majority of growth comes from corporate investments and profits.

In other words, raising taxes on corporations will simply take a bite out of the pension plans of teachers. Yes those corporate fat cat types will pay a as well but as noted before, they are in a small minority.

Corporate profits are what makes RRSPs and mutual funds grow as well. If you have any sort of private plan, you are a corporate shareholder and those taxes will reduce your return.

You will pay taxes yet again on those funds when you convert them by the way. How many times and how much tax do you want to pay on your retirement?

But what about folks who don’t have private or union plans? What about people who are counting on the Canada Pension Plan?

Well, the CPP is of course as dependent on corporate growth as much as any plan is. To increase corporate taxes is to take a bite out of the return on investment for every person in Canada who contributes to the CPP.

Yes kids, the fund is worth $356 billion and that makes you a corporate shareholder. I guess if you never want to see the fund grow faster than inflation you could support higher corporate taxes but that really won’t make anything easier on yourself.

Not every dollar earned by a corporation goes back out to shareholders of course. Billions of dollars in corporate profit are re-invested which employs millions of people and generates billions more in taxes in the long run. Every dollar taken out of corporate profit through taxes however is another dollar that won’t contribute to economic growth.

Corporations are indeed bound by the goal of making a profit. They are impersonal and make decisions based on what will best serve the corporation. That means that the higher that a jurisdiction raises corporate taxes, the higher that chance that corporations will leave that jurisdiction in search of lower taxes. It isn’t personal, its math.

Calgary’s downtown is in a crisis with nearly 30% vacancy in downtown office buildings. If we want to bring investors and tenants back, one of the best things we can do is cut corporate taxes. We need to make ourselves more attractive to invest in and unfortunately with the triple whammy of high tax leadership from Nenshi, Notley and Trudeau, Calgary has become one of the worst places for businesses to invest in all of North America.

We can turn that empty office space into an opportunity but in order to do so we must cut taxes. Corporate taxes are among the easiest taxes to cut and we will get the most return in economic stimulus for doing so. We have to start getting rid of our high tax leadership in Alberta first of course. It is looking likely that Notley will be leaving office soon and then we can work on changing the other two levels of government.

Assuming that Jason Kenney becomes Alberta’s next Premier and that he keeps his promise of corporate tax cuts, don’t fall for the simplistic and inflammatory lines about the money lining the pockets of millionaires. Those tax cuts will help the line of each and every person in Alberta including you. Those cuts will help keep you employed today and keep you comfortable in retirement in the future. Celebrate them.

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