In the next federal election, Stephen Harper, Jim Flaherty , and Conservative candidates across the country will be crowing about how their tax cuts and tax subsidies have helped to draw new investment and (desirable) immigration into Canada. But the Truth is that most of the tax advantage Canadian companies enjoy vis a vis the United States is thanks to Tommy Douglas, not to Stephen Harper.
That's because most of the differential in corporate tax rates and payroll costs is due to the presence of progressive income taxes and public universal medicare in Canada and the absence of those two things in the United States.
It's true. One of the most basic facts of our existence in North America is that conservatism in the United States has made business taxes relatively higher---because populist conservative ideology coupled with constant Congressional electioneering has meant that tax burdens and health care costs are shifted onto employers---and socialism in Canada, which tolerates a more progressive income tax, which in turn underwrites a larger pool of public universal health care that doesn't constitute a payroll tax upon business.
Of course, Conservatives can't go around thanking Tommy Douglas, so they exaggerate the relative importance of their own modest contribution to this state of affairs. But the danger is that if they delude themselves and enough of us sufficiently, they will pursue policies--like further tax cuts and the non-enforcement of the Canada Health Act--that could jeopardize the very foundation that they are now capitalizing upon politically.
When that starts happening, we will lose far more than we will gain.
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