[Newsbot]

Title: Corporate Tax Cuts May Be �One Of The Great Policy Blunders Of The Past Generation': Study
Category: Business
Posted By: DrCaleb
Date: 2015-12-01 07:53:06
Canadian

[bootlegga]

So much for that idea...

[DrCaleb]

bootlegga bootlegga:

So much for that idea...

What, you didn't believe in 'trickle down' economics?

[andyt]

$1:

But in fact, the study seems to show that corporate tax rates are often irrelevant to how well the economy is doing.

This is what i came away with from the article. Other factors are far more important than tax rates. It certainly suggests Trudeau could raise corporate taxes a bit with no problem, back to pre Harper levels. Didn't he run on that plank?

[DrCaleb]

andyt andyt:

$1:

But in fact, the study seems to show that corporate tax rates are often irrelevant to how well the economy is doing.

This is what i came away with from the article. Other factors are far more important than tax rates. It certainly suggests Trudeau could raise corporate taxes a bit with no problem, back to pre Harper levels. Didn't he run on that plank?

Yup. But when Rachael Notley dose the same thing to companies making more than $500k, she's destroying Alberta.

[OnTheIce]

One of the major things the article didn't and can't touch on would have been the results if we didn't lower tax rates.

Would we be in the same position now if we had left corporate tax rates at 1970's/80's levels?

[andyt]

When Trudeau gets around to it, it will be the same reaction.

[DrCaleb]

OnTheIce OnTheIce:

One of the major things the article didn't and can't touch on would have been the results if we didn't lower tax rates.

Would we be in the same position now if we had left corporate tax rates at 1970's/80's levels?

How could there possibly be a study on that? How can you study something that didn't happen?

[Lemmy]

The whole notion that businesses pickup and move, wholesale, in response to changes in relative tax rates, electricity costs, etc is logical, theoretically, but isn't supported by actual evidence. We've pretty much pooh-poohed the idea of "job creators" and trickle-down economics, not because the theory doesn't make sense, but because it just isn't happening...anywhere. We have seen companies move operations to take advantage of low-cost unskilled labour, but that's the only business cost that can be shown to influence a business's decision to relocate operations.

On the other hand, however, tax rates can be shown to discourage new business start-ups. There's been a lot of research done on Quebec and, while it's not clear whether it's the tax-rates, solely, or whether other factors overwhelm (like the language police, fear of separation, etc) and discourage investment in Quebec, the fact is that Quebec has the lowest entrepreneurial rate in Canada (9.6%). That's a surprisingly low number since Quebec has cheap and abundant hydro. Other rates of entrepreneurship, for comparison, are: Ontario (11.9%), Alberta (18.6%), Sask (14.0%), and BC (12.6%). Without public sector investment (which is also highest in Quebec, nearly double Ontario's rate) there would be no business growth in Quebec.

We'll also have to keep an eye on the relationship between carbon pricing and business movement and start-up. Unless carbon pricing is revenue neutral, there's a theoretical possibility it will encourage business movement. I'm skeptical that it will actually happen but it could. I'm convinced, however, that non-revenue-neutral carbon pricing will discourage new investment, just like taxation seems to be doing in Quebec.

edits for typos

[Thanos]

The argument Jim Prentice, with all his flaws or not, made was that each percentage point of tax increase on businesses equals 20000 jobs that won't be created and/or cut outright. If one is going to argue for tax hikes, especially during a recession, then they should be obligated to prove that their job creation efforts are going to counter what business is going to do naturally under the threat of tax increases. You can't have your cake and eat it too, unless that doesn't apply anymore under the rules the left-wing parties want to live by.

[DrCaleb]

Thanos Thanos:

The argument Jim Prentice, with all his flaws or not, made was that each percentage point of tax increase on businesses equals 20000 jobs that won't be created and/or cut outright. If one is going to argue for tax hikes, especially during a recession, then they should be obligated to prove that their job creation efforts are going to counter what business is going to do naturally under the threat of tax increases. You can't have your cake and eat it too, unless that doesn't apply anymore under the rules the left-wing parties want to live by.

I think the general sentiment of the article is that Jim Prentice is full of shit when he said that. He had no data on which to make those claims, and that means he pulled them out of thin air. Which is why he's probably still unemployed after having been Grand Poohbah of the CIBC.

Partisanship like that is why this province is worse off than all the others right now.

[Thanos]

No, economic warfare courtesy of our friends and allies in Saudi Arabia is why we're in the position we now occupy. In case anyone else hasn't noticed yet the provinces that engaged in leftist economics didn't save any money either and, like Quebec, would collapse completely without the feds propping them up.

[peck420]

Claiming economic theory is incorrect, while ignoring the fact that no economic theory has every been fully implemented by politicians is laughable.

Here...I will use the same analysis method on climate change.

Is the climate changing? Yup.

Do we have an idea as to why? Yup.

Do we have potential solutions? Yup.

Have you attempted any of these solutions? Yup.

Did climate change stop? Nope.

Crap, I guess there is no solution for climate change!

Trickle down never worked because trickle down was never implemented. Politicians chose the pillars that were politically suitable, and ignored the rest. Then, blamed the economists when their version of the 'theory' failed.

No different at the other end. Does Keynesianism work? Who knows...I, for one, have never seen that fully implemented either.

[DrCaleb]

Thanos Thanos:

No, economic warfare courtesy of our friends and allies in Saudi Arabia is why we're in the position we now occupy. In case anyone else hasn't noticed yet the provinces that engaged in leftist economics didn't save any money either and, like Quebec, would collapse completely without the feds propping them up.

Have you forgotten every government in Alberta since Klein's has used the Heritage Trust Fund's interest earnings as the method they use to 'balance' budgets? Harper's torpedoing of the full Census and Alberta PC governments OCD like focus on reducing spending at all costs have left us with public infrastructure maintenance costs that will require a generation of spending to get ahead of. But, at least we don't spend at nearly the same rate as Quebec.

"Lefties" are hardly the cause here.

[OnTheIce]

DrCaleb DrCaleb:

How could there possibly be a study on that? How can you study something that didn't happen?

Exactly.

We don't know what the effect would have been had there not been a decrease.

To assume that things would be exactly the same in terms of jobs, economy and revenue just isn't accurate.

Would the results been worse had we not lowered taxes? We just don't know.