Taxing these transfers of money would be like taxing a person for moving his wallet from one pocket to another. 11 percent of the profits not subject to tax were earned by firms which in the year before had lost money. The tax system takes the long view of profits and allows firms to carry their losses forward. In fact the company has made a loss. It makes no sense to tax it.
Corporate profits are at record highs, but corporations are paying less tax than ever before.
While on paper corporate profits have nearly doubled since 1992, after taking inflation into account, they are lower than they were in 1987. It should also be noted that profits taxes are only a part of what corporations pay to governments. Corporations can afford to pay a little more so that Canadians do not pay for government cost cutting. Salaries fall, prices rise, and shareholder dividends shrink. Shareholders seem like invisible people, which is perhaps why corporations make an easy target for social activists.