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On taxes, Paul Ryan looks ‘overseas’ to Canada

U.S. Republican vice presidential nominee Paul Ryan listens to U.S. Vice President Joe Biden during the U.S. vice-presidential debate in Danville, Kentucky October 11, 2012.

MATT SULLIVAN/REUTERS

Canada's corporate tax code is worth emulating, U.S. vice-presidential candidate Paul Ryan said in Thursday night's debate.

The Republican Congressman gave Canada the kudos (his only, passing mention of the country) while explaining why the U.S. needs tax reform.

"That's why we're saying we need fundamental tax reform. … where I come from, overseas, which is Lake Superior, the Canadians, they dropped their [corporate] tax rates to 15 per cent," Mr. Ryan said.

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"The average tax rate on businesses in the industrialized world is 25 per cent, and the President wants the top effective tax rate on successful small businesses to go above 40 per cent."

The United States has one of the developed world's highest business taxes while Canada has one of the lowest.

The federal rate in Canada is 15 per cent, which was cut in stages from 21 per cent when Prime Minister Stephen Harper took power in 2006.

The U.S. federal tax rate, by comparison, is 35 per cent. (State and provincial taxes vary; when combined with the federal into the "statutory" rate, Canada is 26.1 per cent and the U.S. is 39.2 per cent, according to a recent University of Calgary study.)

The Conservative government certainly seems to think the cuts are working to stimulate the economy. Ottawa recently said its corporate tax revenue was up slightly from last year even with the rate cuts, reported The Globe's Bill Curry.

The lone mention of Canada in the first presidential debate was also courtesy of the Republican ticket.

Mitt Romney, in speaking about the importance of strong energy policy to create jobs, said he would "bring that pipeline in from Canada."

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That's a reference to the Keystone XL pipeline, which would run from the Alberta oil sands to U.S. refineries in Texas. It's been held up by President Barack Obama, a Democrat, over environmental concerns about the pipeline's proposed route.

Mr. Ryan's use of geography, however, was more questionable. He described Canada as being "overseas" because he comes from Wisconsin, across Lake Superior from northern Ontario.

It's hard not to think of the last Republican vice-presidential candidate, Sarah Palin, and her infamous comments about Alaska and Russia.

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About the Author
Assistant editor, Ottawa

Chris Hannay is assistant editor in The Globe's Ottawa bureau and author of the daily Politics newsletter. Previously, he was The Globe and Mail's digital politics editor, community editor for news and sports (working with social media and digital engagement) and a homepage editor. More

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