In the good old days, prior to world war II there was no income tax and there was a period of prosperity, however the government got hooked on the benefits of a war tax and continued to tighten the tacks on the backs of hard working Canadians. Now we are at the stage where bankruptcies are at an unprecedented high.

Apparently Manitoba understands the principles of reduced tax rates generates more total taxes, by way of increased employment. The ration is simple. More corporations going to Manitoba for tax breaks, means more jobs, more jobs means more employees, more employees means more income tax paid out in payroll.

I wonder if Ontario will wake up and try to keep as much business at home as possible.?

for more information on tax issues [1] click here.

The following article written by Carol Sanders, is a reprint from the Winnipeg Free Press print edition January 3, 2011 A4

Starting Jan. 1, Manitoba has totally wiped out its general corporation capital tax.

The tax was eliminated July 1, 2008 for manufacturers and processors and, starting this year, other corporations don’t have to pay it, either. The change will save Manitoba businesses more than $119 million annually starting next year, Finance Minister Rosann Wowchuk said in a press release Friday.
The Manitoba Chambers of Commerce said the province jumped at a federal incentive to eliminate the tax and deserves credit for acting on it quickly.
“Each province had until 2011 to accommodate that removal,” president Graham Starmer said Friday. “The province was very proactive a couple of years ago in 2008 removing it from manufacturers and processors,” he said. Now it is following through and totally removing it. “I give the province credit for following through with their commitment,” Starmer said. “If only they could do that with the payroll tax, we’d be very happy.”
On Dec. 1, Manitoba became the first province in Canada to permanently eliminate the small business income tax rate.
But Manitoba is one of three provinces — including Ontario and Quebec — that still collect the payroll tax, he said. And Manitoba charges the largest percentage, taking $370 million a year from employers, said Starmer.
“It deters companies from expanding because it expands the tax they have to pay on payroll. That’s probably why some corporate head offices have moved to other locations.”
carol.sanders@freepress.mb.ca
Republished from the Winnipeg Free Press print edition January 3, 2011 A4