Ontario Spending on Tax Cuts for Business

The 2010 Budget continues the government’s spending on corporate tax cuts, with a reduction in the rate from 14% to 12% this year and 10% next year. The Small Business tax is lowered to 4.5% and the Small Business surtax is eliminated.

Here is the government’s comment on this in its media release 3 June 2010:

TAX CUTS FOR BUSINESS
Starting July 1, 2010, the government will be providing tax cuts totalling more than $4.6 billion over three years for large and small businesses:
• The general Corporate Income Tax (CIT) rate will be lowered from 14 per cent to 12 per cent and then to 10 per cent over three years;
• The Corporate Income Tax rate on income from manufacturing and processing, mining, logging, farming and fishing will be lowered from 12 per cent to 10 per cent;
• The small business Corporate Income Tax rate will be cut from 5.5 per cent to 4.5 per cent;
• The small business deduction surtax of 4.25 per cent will be eliminated.
• These tax cuts are in addition to the more than $1.6 billion in annual savings for businesses from the elimination of the Capital Tax on July 1, 2010.

In fact, Table 2 in the Ontario government’s Ontario Tax Plan for Jobs and Growth (page 15) itemizes $8.4 billion in annual savings that will accrue to the business sector from the introduction of the HST, cuts to corporate taxes and elimination of the capital tax, when fully implemented.

That's $8.4 billion annually that could otherwise be used to reduce the deficit, or pay for public services that benefit everyone.

dallan@cupe.ca

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