THE WESTERN CANADIAN LUMBER WORKER “INCOME TAX CUTS LEGAL PURSE LOOTING By HARRY RANKIN Recent legislation passed by the House of Commons cutting income tax rates for manu- facturing and processing in- dustries from 49 to 40 percent is nothing less than legal looting of the public purse. For the big U.S. and Canadian corpora- tions that dominate our economy, it means a gift of hundreds of millions of dollars annually. And since the money to run the country must come from somewhere, it also means that the ordinary citizen will have to pay more. The phoney reason given by *the Liberal party for in- ~ troducing the legislation, and the Conservatives and Social Creditors for supporting it, was that it would spur investment and create jobs. The fact is that it will not create any new investment and will likely reduce the number of jobs. Corporations expand produc- tion only when they have an expanding market. If the tax cuts passed by the Commons vare not transferred directly - into the pockets of the share- holders of these companies, _ they will be used to introduce technological changes that will cut the number of jobs, and thereby increase profits still more. Imperial Oil, for exam- ple, is building a new refinery at Edmonton, but closing its refineries at Winnipeg, Regina and C ; This most recent cut in corporate income taxes is only one more in a long series of welfare handouts to big cor- porations. Mining companies are permitted to re-invest their profits and to deduct such investment as an expense for income tax purposes. Not only that, they are permitted, for income tax purposes, to put down $4 million as an expense for every $3 million they re- invest. ; Manufacturing and process- ing corporations are allowed to depreciate new machinery at the rate of 50 percent per year. _ Corporations can defer in- come tax payments, which amounts to the same thing as interest free loans from the government. It is estimated that at present rates, such . deferred taxes by the end of os decade will amount to $12 on. According to N.D.P. national leader David Lewis, unpaid meome taxes by corporations (that is taxes they should be paying if there weren’t getting SO many exemptions) amoun- ted to $2 billion in 1969. Former federal Liberal Cabinet Minis- fer Erie Kierans estimated them at $4.7 billion for 1972. As the result of such cor- porate welfare legislation, corporations now keep two sets of books, one for shareholders showing their actual state of affairs, and one for income tax purposes designed to take advantage of all special exemptions granted by succes- sive federal governments. Machinery, for example, which can be writen off in two years for income tax purposes, can last for 20 years so remains in the books as an asset long after it is written off. In addition to corporate tax cuts there are literally dozens of government aid-to-industry programs which are simply handouts of big business from the public treasury. They amount to hundreds of millions of dollars annually and over 85 percent of them go to big for- eign corporations. The net result of all this is that today over half of all corporations in Canada pay no income taxes at all. The remainder pay at far lower rates than the average citizen. The oil and gas industry in 1969, for example, paid only 8.6 percent while the mining in- dustry paid only 12 percent. The giant U.S. owned Inter- national Nickel Company at Sudbury made a clear profit of $94 million in 1971 but because of corporate welfare legis- lation, paid no taxes at all that year and in addition was gran- ted a tax credit of $2.8 million! In 1951 corporations paid 28 percent of all income taxes while individuals paid 26.7 per . cent. Last year, according to estimates, corporations paid only 12 percent while the share of individuals went up to 50 percent. Isn’t it hypocritical for the owners of these industries and their political spokesmen to scream and rave about welfare rates for the down and out, as well as to clamour for crack- downs on unemployment in- surance benefits, when they have turned the whole machi- nery of government into -one vast system of corporate wel- fare handouts for themselves? The federal government can- not find the will or the money to undertake a large scale hous- ing program and to clear up slums, to subsidize modern transportation systems for our cities, to establish crown owned industries to process our resources at home and to develop our energy resources to meet Canadian needs, The reason is obvious — it’s a case of everything for corporate welfare and as little as possible for the welfare of the people. )-PANT UNIONISTS. are trade unionists two pay boosts of REESE Sure 7 : f - “ pe eS Telephone: 684-3931 DUMARESQ LOGGERS’ AGENCY 328 Carrall Street, Vancouver 3, B.C. “The Loggers’ Favourite Job Centre” NICK BRONTE ae MEMBERS OF LOCAL 1-405 IWA employed on the afternoon shift at the Revelstoke Sawmill in Radium, pose for their picture following a safety meeting with Regional Safety Director Max Salter who made a tour of operations in the Local Union in company with Financial Secretary Art Damstrom. 2 Now brewed under licence in British Columbia. DREI KRONEN BRAUEREI (1308) LTD.