“Tax cuts create jobs.” Paul Ryan and the Republican nominee Mitt Romney told a group that Canada just cut their corporate taxes to 15%.
Paul Ryan was obviously insinuating that these tax cuts put America at a disadvantage, and that the Canadian economy is going to explode and take all of our jobs. Corporate taxes in 2006 were already just 21%. In January 2011, Canada cut the corporate tax rate to 16.5%, then cut them again to 15% January 2012.
Overall, Canada has cut corporate taxes by almost 30% in 6 years.
The only problem is, the Canadian economy isn’t blasting off at all. It is still stuck in an anemic recovery. just like the United States. The Canadian economy only grew 1.8% in the second quarter of 2012. The United States on the other hand has a much higher statutory corporate tax and the economy grew at 1.7% in the same quarter. How can this be? Higher taxes hurt job creation, right? Yet both countries are stuck in the same slow recovery.
Unemployment in Canada has only dropped 1% since the recession ended, less than the drop in the United States which dropped almost 2%.
Unemployment should be dropping like a rock in Canada, not staying pace with the United States.
So for the last 3 years, 2009- 2012 the Canadian economy has failed to produce jobs at a healthy clip, even though corporate taxes are on the verge of being the lowest of the G7 countries.
By Ray Medeiros