Corporate tax cuts don't spur growth

The Globe and Mail:

Canadian companies have added tens of billions of dollars to their stockpiles of cash at a time when tax cuts are supposed to be encouraging them to plow more money into their businesses.

But an analysis of Statistics Canada figures by The Globe and Mail reveals that the rate of investment in machinery and equipment has declined in lockstep with falling corporate tax rates over the past decade. At the same time, the analysis shows, businesses have added $83-billion to their cash reserves since the onset of the recession in 2008.

But the reality is there are no easy answers when it comes to measuring the impact tax rates have on job creation. Economic growth in Canada can be attributed to a lot more than just corporate tax rates. Such things as commodity prices and the value of the Canadian dollar also play a role.

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