The small business tax rate at 10-15% is analagous to RRSPs where the tax rate is 0%.  You are permitted to build up capital with little tax (or no tax for an RRSP)  which permits you to build a better or bigger business (or build up a nest egg for an RRSP).  Once you start personally enjoying the income from that built-up business or nest egg, you pay full taxes. And that built-up business inevitably results in hiring additional employees to the benefit of society.  And that nest-egg has provided substantial investment funds for our economy until it is used.