[Bruce_the_vii]

I thought I would post a reminder that Canada has a national economic development program. It's to borrow money to afford tax cuts for corporations. It's a huge deal, the amount they are putting on debt to do this is $50 billion. It requires a deep conviction that lower corporate taxes will create jobs. So by now the Canadian economy should be growing, maybe restrained by the rest of the world, but we should be seeing the results. $50 billion in debt.

[Canadian_Mind]

True or not, would you stop making excessive threads for the same topic? It's annoying.

Further, I don't see tax cuts going towards creating jobs, but going straight into investors pockets. Which is the primary reason why we have a wage gap, the corperations have a responsibility to make money for their owners, and every year they are supposed to produce a growth in the amount of dividents they provide, which in turn iuncreases a corperations value. This, in turn, increases the value of an investers portfolio. So they have two different ways that their income is always increases, one feeding off the other.

There. Happy? I get it.

Problem with your argument is that tax cuts are only a part of the problem that feeds this cycle. If the tax cuts aren't given, corperations will find ways to cut the fat elsewhere, such as outsourcing jobs, declining work hours, pay cuts, etc. So in a way, the tax cuts more help to maintain the current standard, then they go towards providing new jobs or higher wages for the current jobs.

Another issue is that we must remain competative with other buisiness savvy countries, else the whole corperation will move. Means that those 1% CEOs who pay 33% of our taxes will no longer reside in our country, and thusly no longer pay our taxes. This is why the US revenue guys were originally allowed to go after americans abroad; to get the appropriate tax revenue from executives working in corperations that litterally outsourced themselves into foreign tax havens. On top of this, you no longer have this massive corperation, whatever it is, paying any taxes to the federal government whatsoever.

So really, tax cuts for corperations are a needed double-edged sword.

What I would like to see is a base level tax established, and corperations earn small tax cuts based on job and wage growth (adjusted for inflation of course). So long as these numbers and wages are maintained, so is the tax cut. So a corporate tax of say, 25 percent is made. If a corperation with 10 000 canadian employees adds another 5000 canadian employees to its workforce, and maintains it's average wage level, it'll earn a cut of 5% down to 20% tax. Conversely, if the average wages of those NOT in the executive staff rises by 50%, they also get a cut of 5%. Of course, these cuts can only go so far, and I'd set the minimum at 15-18%.

Of course, a base tax would have to be established, as would a base year to compare from. I'd also set a base for size of a corperation so that it is applied primarily to those already established.

I don't know if it would be easy to implement, but it.s just a thought meant to generate discussion.

[Bruce_the_vii]

Canadian_Mind wrote:

True or not, would you stop making excessive threads for the same topic? It's annoying.

Sorry, I'm sort of a one topic poster - jobs.

Tax cuts may prevent out sourcing, the effect of tax cuts maybe multidimensional.

I didn't really follow you arguement about the rich CEO moving offshore and thus dinting the economy.

The idea of giving tax cuts to firms that create jobs is supported by the NDP. It makes more sense than borrowing to afford tax cuts for all corporations.

[andyt]

Canadian_Mind wrote:

True or not, would you stop making excessive threads for the same topic? It's annoying.

Further, I don't see tax cuts going towards creating jobs, but going straight into investors pockets. Which is the primary reason why we have a wage gap, the corperations have a responsibility to make money for their owners, and every year they are supposed to produce a growth in the amount of dividents they provide, which in turn iuncreases a corperations value. This, in turn, increases the value of an investers portfolio. So they have two different ways that their income is always increases, one feeding off the other.

There. Happy? I get it.

Problem with your argument is that tax cuts are only a part of the problem that feeds this cycle. If the tax cuts aren't given, corperations will find ways to cut the fat elsewhere, such as outsourcing jobs, declining work hours, pay cuts, etc. So in a way, the tax cuts more help to maintain the current standard, then they go towards providing new jobs or higher wages for the current jobs.

Another issue is that we must remain competative with other buisiness savvy countries, else the whole corperation will move. Means that those 1% CEOs who pay 33% of our taxes will no longer reside in our country, and thusly no longer pay our taxes. This is why the US revenue guys were originally allowed to go after americans abroad; to get the appropriate tax revenue from executives working in corperations that litterally outsourced themselves into foreign tax havens. On top of this, you no longer have this massive corperation, whatever it is, paying any taxes to the federal government whatsoever.

So really, tax cuts for corperations are a needed double-edged sword.

What I would like to see is a base level tax established, and corperations earn small tax cuts based on job and wage growth (adjusted for inflation of course). So long as these numbers and wages are maintained, so is the tax cut. So a corporate tax of say, 25 percent is made. If a corperation with 10 000 canadian employees adds another 5000 canadian employees to its workforce, and maintains it's average wage level, it'll earn a cut of 5% down to 20% tax. Conversely, if the average wages of those NOT in the executive staff rises by 50%, they also get a cut of 5%. Of course, these cuts can only go so far, and I'd set the minimum at 15-18%.

Of course, a base tax would have to be established, as would a base year to compare from. I'd also set a base for size of a corperation so that it is applied primarily to those already established.

I don't know if it would be easy to implement, but it.s just a thought meant to generate discussion.

If you don't want Bruce to keep posting this stuff, then don't reply to it.

But actually a good, thoughtful reply. Sounds pretty good, tho I'm sure that like any govt program it can be gamed by the companies. And, I wonder if a company would add a significant number of workers that they wouldn't otherwise just to get a small tax cut. That's the problem with a lot of government tax deductions, they reward behavior that would happen anyway, they don't change behavior. Also, your scheme has a 25% tax rate. We've just lowered it to 15% "to be competitive with other countries." And I believe the small business tax is even lower. In Manitoba small businesses already pay 0% corp tax provincially.

I certainly wouldn't do it just for companies already established. If we had this scheme, nothing wrong with supporting star ups as well. We'd just have to stop established businesses pretending to be a new one and getting a credit for all the workers they already have.

The underlined part is just bs. Hell 50% of rich Chinese want to move here or the US because of conditions in China, including, ironically, corruption. Companies move their manufacturing to Asia because they can exploit the workers there much more than here, not because of taxes. The resource and the service sectors certainly can't do that in any event. Maybe some smarty pants can figure out a way we could support (subsidize) our manufacturing in a way that doesn't break trade agreements and doesn't leave us paying out more than we take in on the deal. Don't know. It would be nice to know what a country like Germany does to support their industry. They're an exporting powerhouse. A lot, I'm sure, has to do with the quality of their technical education system that creates productive workers. But look what we do here. BC decided to buy ferries made in Germany instead of right here in BC. There are people that argue that BC can't build ships anymore, but the committee that awarded 8 billion in govt shipbuilding didn't seem to think so. How many jobs would building the ferries here have created, instead of in govt subsidised shipyards in Germany? That's the kind of shit we do that where we just undercut ourselves. Or, why aren't we refining our own oil in Canada instead of shipping bitumen south or east? Maybe some govt priming of the pump, with a return of investment later would be a good idea there. ETc.

[eureka]

One problem with corporate tax cuts is that they are self perpetuating. If one country does it for competitive reasons then others will follow. That is what has been happening since 1980 when every OECD country began to reduce corporate taxes.

That led to necessary replacement for lost revenue that was shifted to the consumer in the form of consumption taxes (every country except Switzerland did that).

Those consumption taxes could only be made to a certain level or there would be mass protest that would dwarf what we have been witnessing for the past few weeks. Consequently, every Western country has seen a decline in revenues that has led to reduced services everywhere AND to higher poverty levels.

We do not need this kind of tax incentive and particularly not in Canada where the levels are already lower than most and certainly lower than our neighbour's.

[andyt]

Well, CM did propose raising the corp tax by 10% first - ie closer to the US.

Many of our corps have headquarters in the US. When they pay a low tax rate here, they are then assessed at the higher US rate for the remainder. Our low tax rate is shipping tax dollars to the US treasury.

[BartSimpson]

Bruce_the_vii wrote:

Sorry, I'm sort of a one topic poster - jobs.

+1 for honesty and humility. Both are always in fashion.

[BartSimpson]

andyt wrote:

Well, CM did propose raising the corp tax by 10% first - ie closer to the US.

Many of our corps have headquarters in the US. When they pay a low tax rate here, they are then assessed at the higher US rate for the remainder. Our low tax rate is shipping tax dollars to the US treasury.

Nope. One of the problems with our corporate tax structure is that a US firm with operations in Canada will pay Canadian taxes on its earnings but be exempt from US taxes so long as the profits are kept in Canada. Any profits brought back to the USA are subject to taxation and are also frequently subjected to Kafkaesque bureacratic penalties. Consequently our tax structure is good for Canada in this regard.