Mr. Speaker, I know of the Laffer curve, but we also have to keep in mind, and I think the member said it, that he believes the tax rate right now is more or less fair. I agree with that. Now is not the time for a further decrease. I call it a cut and the member may call it an adjustment, but at the end of the day there is less money required for corporations to pay in terms of the rate, the percentage.
I understand what the member is saying about the work that has been done on the Laffer curve. It is the idea that perhaps by reducing the amount of tax required, we actually will increase more investment, and therefore there will be more money in the coffers. I fully understand that.
There is also the law of diminishing returns. That is, if we lower the rate and money is not reinvested, if we do not attract more investment, we potentially will have less money in revenues as well. In other words, if we do not see reinvestment and if we do not attract more investment, then we will have less money in the treasury to redistribute or invest. I do not think there has been enough work done on this and certainly there has not been enough debate to suggest that we should go ahead with it at this point.
In fact, I remember what TD economist Don Drummond said back in 2005 when we got the then Liberal government to change the budget's $4.5 billion in corporate tax cuts. He said those corporate tax cuts would not go into reinvestment but in fact into excess profit. Now, the Laffer curve would deal with that as well and would say that if the money is going to go into excess profits then we should not make these kinds of reductions or what I call tax cuts.
I think it is a valid point. That is why I think this should be debated. That is why I think the clause should be deleted until we have the evidence and proof, which we have not had. All we have seen is a widening prosperity gap.
As I have mentioned, the investments we need to make right now are investments in people, in things such as an affordable drug plan and affordable education and, for goodness' sake, reinvesting in the infrastructure of the country before we hand over tax cuts in the way that is being proposed in the bill.