When is a tax increase not a tax increase?

So let's get this straight. All though out 2007 and 2008, the federal and provincial Cons chided the government of Ontario to reduce corporate taxes because without the reduction, business would move out of, or not locate in Ontario. "Lower corporate taxes are essential," spewed Flaherty. He being a former Ontario Minister of Finance made his word ring with truth (chuckle).

So lowering taxes on profit is a good thing. As a small business guy I like paying lower taxes... if now I could only make a profit!

So here we are in 2009, the Cons finally figured out that the economy is in the toilet and after 3 years of seven percent program spending growth, maybe, just maybe, they have to do something about the deficit which will be $50b-75b in 2009 depending on who does the math.

One of the problems for the government is that they are collecting a lower tax rate on less profit. The perfect storm! So what to do?

Raise the EI premiums paid by business! According to Cons it is not a tax increase. Tell that to the people who have to pay it!

The reality is that they gave tax breaks to big corporations making huge profits (read: banks and investment firms) and now they want to ding the smaller guys with a higher bill for EI. These are the same small firms that are not making a profit to take advantage of the tax-rate reduction. Will they have to lay of people to pay the EI... um... tax increase? Or will they just have to do without new employees?

Either way it is dumb.