Ireland: The High Cost of Corporate Tax Cuts and the IMF

In the mid-1990s, Ireland slashed Corporate Income Tax rates to 12.5%. Many credit this move as the beginning of the age of Ireland’s reputation as the ‘Celtic Tiger’.

It seems all things must pass.

Ireland’s reckless reductions contributed to a long-term structural deficit that it is only now wrestling with and trying to rein in.  The finances of the country are a mess and the current Prime Minister, Brian Cowen, just announced this past Saturday that he will be resigning his position given the level of public animosity towards the IMF and EU ‘austerity’ measures.

Under Stephen Harper’s government, Canada is poised to follow the same path.  We could only be so lucky to see Stephen Harper resign in humiliation as well.

Why?

Stephen Harper has recklessly hacked away at corporate income taxes and the GST in this country, creating a massive and unprecedented structural fiscal deficit.  It is the largest in Canadian history, even bigger than Canada’s previous deficit records set by another (Progressive) Conservative leader, Brian Mulroney.

The most important part is that it is a structural deficit.  There is no promise of balance until corporate income taxes and the GST are brought back into line.

But this is part of the Con shell game, isn’t it?  Create enormous and bloated fiscal distortions, spend good money with your defense and prison system buddies and then claim that ‘belts need to be tightened’ as they drool at the prospect of slashing everything from health care to the CBC to other critical social institutions.

The Harper Conservatives have already downloaded a number of grievous hidden financial costs to the Canadian public, including increases in EI, alterations to pensions and retirement benefits, downloading costs to other governments (eg. the ‘Economic Action Plan’ insisted on equal parts of participation from other levels of government – where are they going to get the money?) and we should expect the trend to continue.

And all of it is endorsed – no, encouraged – by the IMF and other unelected and unaccountable institutions, most of which are organized by and managed for the largest corporations of the world. By proxy, it’s a system of financial ruin that is being decreed by the world’s elite.

It must end.

Canada can save itself from the insane financial mismanagement of the Conservative government, but we have to act quickly and make sure that by Iggy and Jack are looking out for Canadians.  If we don’t, Harper will find a way to weasel around with one of them and we’ll continue to pay what corporations should be.