Caught between a rock and a hard place, Canada's Prime Minister Paul Martin has found himself in an almost impossible political position over proposed corporate tax cuts, with the left threatening to withdraw support for the minority government unless the plans are dropped from the economic agenda, and the right threatening to do likewise if he capitulates to these demands.
In February's budget, Finance Minister Ralph Goodale announced a number of measures intended to relieve the tax burden on the nation's businesses. These included a phased cut in corporate tax to 19% from 21% by 2010, and a pledge to eliminate the unpopular corporate surtax by 2008.
However, Jack Layton, leader of the left of centre New Democratic Party has warned Martin that he will withdraw support for the government unless the C$4.6 billion ($3.7 billion) in tax cuts are dropped.
Compounding Martin's problems, the Conservatives, upon whom the government relied for support to get the tax cut proposals through the House of Commons, have indicated that they will no longer back the government if the proposals are dropped.
Business groups are also strongly opposed to the idea of shelving the tax cuts.
In an open letter to the Prime Minister, the Canadian Federation of Independent Business (CFIB) outlined its opposition to any move towards eliminating the corporate tax cuts announced in the 2005 federal budget.
"Elimination of the corporate tax cuts would be a slap in the face to all small- and medium-sized enterprise (SME) owners, who create most of the new jobs in every community across Canada," remarked the CFIB's executive vice-president, Garth Whyte.
The open letter from the Canadian Federation of Independent Businesses to Paul Martin can be found in the Tax-News Resources section
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