Harper's Best Fiscal Stimulus Package: Cut Taxes

[Smallc]

Please make no mistake in what I am saying. The failing corporations are their own problem, inside our capitalistic system this is the basic economic law.

There is your mistake. We don't have a pure capitalistic system. We never have and I hope that we never will.

The citizen is what matters, not the corporation. I would have no problem funding citizens to find other work.

Citizens work for corporations. This country need corporations to survive. Especially ones that directly and indirectly employ so many people.

Edited December 25, 2008 by Smallc

[Jerry J. Fortin]

So you support the rise of corporatism. Good for you ! I for one am just about ready to start thinking about retirement, 6 more years to go. I will not have to worry about the problems you and folks like you are creating. I will move to someplace where I would have to pay to see a snowflake, so you can believe I will save a lot of money.

Corporatism may be a good thing, it will depend on who is in control. From my perspective, the folks running the auto industry are not the right kinda guys to do the job. I can see that many folks choose not to learn from the mistakes of others. From Enron forward there has been writing on the wall, but we need to take the time to read it. The "Big Three" are leading folks down the path, Stevie the Wonder Economist too.

[Jerry J. Fortin]

There is your mistake. We don't have a pure capitalistic system. We never have and I hope that we never will.

Nor do we have a purely socialistic system, and I hope we never do.

Citizens work for corporations. This country need corporations to survive. Especially ones that directly and indirectly employ so many people.

Not all folks are wage slaves to massive corporations, in fact there is likely more people working for small business than large business.

[Oleg Bach]

Most people who work for large corporations contribute nothing to society. There job is that of justifiers - they get paid because the corporation has so much money that it does not know what to do with it - so the beast feeds itself - and produces nothing of value - plus all corporate workers are the bottom of the barrel types who comply to corporate stupidy - as long as they get paid...Once asked a friend of mine..who worked for a major American Insurance company - They gave him a producer of the year award - and fired him the same year for being useless....now he drives a school bus...I used to ask him what he really does? Now he finally has an answer _"I drive a school bus"...at least now he is working, for about 200 thousand less - but he's happy and drinks less.

[Smallc]

Nor do we have a purely socialistic system, and I hope we never do.

And there's no danger of that. We have a mixed system, and what we are doing now reflects that mix.

[Oleg Bach]

And there's no danger of that. We have a mixed system, and what we are doing now reflects that mix.

Mixed system in deed! A tiny group of fellows that control all the money - a few liberals who will say and do anything for a few bucks - and then our so-called NDPer super lefties - who will grovel like scoop mouthed babies at the foot of the masters table ---- waiting for a few crumbs with the promise to the top guys to continue to dupe and debase as much of the population as possible with their animalistic socialism. Of course there will never be a true socialist government - Socialist are still governed by greed and materialism - they can be bribed right in to right wing conservatism no problem - as if the lefties are loyal to humanity - what a joke - all want one thing - not goodness - not fairness and equality - MONEY that's the ticket! They all want more cash.

[Jerry J. Fortin]

Free trade is at the heart of the problem. The government is no longer able to protect our jobs and our companies from foreign influence. We are subject to the whims of the international market and that means we cannot control what happens in economic terms. That being the case, jobs will continue to disappear and corporations will continue to move to locations with lower labour costs. There is not thing one that can be done about this problem at this point short of withdrawing from these trade agreements.

[bush_cheney2004]

Free trade is at the heart of the problem. The government is no longer able to protect our jobs and our companies from foreign influence. We are subject to the whims of the international market and that means we cannot control what happens in economic terms....

Point of order...your "government" (federal and provincial) solicited foreign investment for many years, including tax incentives that resulted in relocations from other nations for manufacturuing and services.

The worm has turned.

[August1991]

Free trade is at the heart of the problem. The government is no longer able to protect our jobs and our companies from foreign influence. We are subject to the whims of the international market and that means we cannot control what happens in economic terms. That being the case, jobs will continue to disappear and corporations will continue to move to locations with lower labour costs. There is not thing one that can be done about this problem at this point short of withdrawing from these trade agreements.

Who is this "we" that you speak of? Jerry, by what authority do you speak for the collective? Does Stephen Harper even have that right?

[BC_chick]

Who are these "cooperations" and how do I become one?

The government can only tax people.

You're kidding right?

From Revenue Canada site:

Corporations

A corporation is a separate legal entity. It can enter into contracts and own property in its own name, separately and distinctly from its owners. It has to pay tax on its income, and therefore must file its own income tax return.

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/menu-eng.html

I learned that in Accounting 101 (basic bookkeeping).

IOW, it taxes people who own the business, people who work for the business or people who buy products or services from the business.

When there are many 'owners' in a corporation (shareholders), they are taxed on dividends. If a sole proprietorship or partnership incorporates and the owner(s) stays on as 100% shareholder, they can take a salary and be taxed on that according to individual income tax laws.

However, the 'corporation' still pays a business tax on its revenue as well. The salaries are regarded as expenses and deducted before paying corporate taxes.

Edited December 27, 2008 by BC_chick

[BC_chick]

Added to the post above.

Edited December 27, 2008 by BC_chick

[Jerry J. Fortin]

Who is this "we" that you speak of? Jerry, by what authority do you speak for the collective? Does Stephen Harper even have that right?

The we that I speak of is the citizens of this nation, and no I do not speak for them, I do speak as one of them. In my opinion, which I should not have to cite on this or any other public forum, the right of the individual to speak must be the foundation from which we derive our citizenship.

[August1991]

I learned that in Accounting 101 (basic bookkeeping).

...

When there are many 'owners' in a corporation (shareholders), they are taxed on dividends. If a sole proprietorship or partnership incorporates and the owner(s) stays on as 100% shareholder, they can take a salary and be taxed on that according to individual income tax laws.

However, the 'corporation' still pays a business tax on its revenue as well. The salaries are regarded as expenses and deducted before paying corporate taxes.

IOW, in Accounting 101, you learned that a person (someone) pays a corporate tax. We all pay taxes and corporate taxes are among the taxes we pay. If you'd paid attention, you might have noticed BC Chick a subtler point of my post: who pays the corporate tax?

In the first instance, it could be customers, employees or shareholders. Who exactly? Dunno. But I feel comfortable in saying that no corporation pays the tax - it is someone (a person) who pays it.

The we that I speak of is the citizens of this nation, and no I do not speak for them, I do speak as one of them. In my opinion, which I should not have to cite on this or any other public forum, the right of the individual to speak must be the foundation from which we derive our citizenship.

Jerry, you are perfectly entitled to speak for yourself - but you are not entitled to speak for "we Canadians". To be more specific, if one Canadian chooses to buy a Japanese car, should anyone have the right to forbid this or even make the transaction difficult? Should we encourage/subsidize domestic business? Should we direct individual choices?

If Jerry J. Fortin falls in love with a Japanese girl and decides to marry her, should "we" make him think twice about the decision?

Edited December 28, 2008 by August1991

[Jerry J. Fortin]

Governments are making choices for us, they have for years. The real question should be phrased; "Should the citizens be entitled to have a specific say in a specific issue?"

Where do we draw the line with respect to individual choices? When harm or the potential for harm to oneself or another individual exists? Does the majority rule the individual in this society or not? Do we have a form of democracy or not?

In my case, I advocate a direct democracy where the government proposes legislation and the public ratifies or sanctions the effort by democratic method. The individual is the basis of our society, and the right of the individual must prevail.

To your point August, I never claimed the right to speak for others. I very carefully stated that I could speak as a Canadian citizen who has the right to a form of free speech. To answer your question;

To be more specific, if one Canadian chooses to buy a Japanese car, should anyone have the right to forbid this or even make the transaction difficult?

my answer to this question is yes, it is a fact that government is charged with the responsibility of providing regulations for public safety.

Should we encourage/subsidize domestic business?

My answer here is that government should not subsidize private ventures.

Should we direct individual choices?

Governments already legislate a form of morality the serves that specific purpose.

The thought police are already in position, they are the partisan spin doctors so omnipresent in our society today.

[BC_chick]

In the first instance, it could be customers, employees or shareholders. Who exactly? Dunno. But I feel comfortable in saying that no corporation pays the tax - it is someone (a person) who pays it.

The post to which you were responding was discussing Harper's corporate taxes (at a time when individual taxes should be cut). You insinuate that cutting corporate taxes is, in fact, cutting *somebody's* taxes.

Wow, you really missed the point, didn't you? Why do companies incorporate? Other than for liability purposes (which are no longer as limited as they used to be), it's because of the lower tax brackets. So other than attracting investors, companies incorporate when their profits are high enough that it is beneficial to keep the profits separate from the owner(s).

In other words, Harper's tax policy is cutting taxes for the select group who are the presumably the highest earners in the entrepreneurial world.

So let's put your little semantics game aside and address the real issue. Harper's is banking on a 'trickle down' economics where the corporations take their nice little tax breaks, lower their prices to margins where we can afford them and we spend our money on them stimulating the economy once again. That's a great fantasy, but unfortunately, that's not the way consumerism seems to work.

In reality, corporate taxes do nothing other than maximize profits for the highest earners in society (aka a good part of Harper's base). Even if by some miracle the lower corporate taxes do end end up lowering prices, at a time like this when consumer confidence is next to nil, we don't end up spending our money on these corporations because we are afraid (we being the non incorporated businesses and payroll-income earners).

IOW, it's nothing short of insanity to think lowering corporate taxes during an economic crisis does anything other than make rich people even richer.

Edited December 29, 2008 by BC_chick

[Progressive Tory]

I recently saw Art Laffer on Bill Maher and he claimed that he never said that lowering taxes would stimulate the economy. Huh? Who am I to argue? That is certainly what fans of the Laffer Curve thought. If the link works it's an interview with ecomomists Peter Schiff and Arthur Laffer, and the infamous bet.

http://angloaustria.blogspot.com/2008/12/p...hur-laffer.html

The fact is that Global economics have become a very complex issue so no single theory can dictate. We need a little John Keynes because borrowing for infastructure to create jobs is a good thing. We also need to protect good union jobs, but have to be careful about bailouts, making sure that they benefit the workers and not the execs.

The cut to the GST was nothing more than a gimick. Art Laffer did say that the only way tax cuts work is if government spending is reduced. However, this governemnt has spent more money than any other, and now we're in trouble.

Stephen Harper calls himself an economist and follower of Arthur Laffer/Ronald Regan; but while he graduated from University with an economic degree; he has never actually WORKED as an economist. Other than an entry level position at Esso and running the neo-Conservative National Citizens' Coalition; he has no real experience in the private sector.

However, what concerns me the most was Flaherty's economic update which showed a roughly 800 million dollar surplus (down from the 13 billion they inherited). But when you read down the list this surplus included the sale of 12 billion dollars in Canadian assets (in a buyer's market). Does this mean we already have an 11 billion dollar deficit? Sorry if I don't trust Flaherty but this kind of creative bookkeeping was typical of the Mike Harris gov't.

[DrGreenthumb]

However, what concerns me the most was Flaherty's economic update which showed a roughly 800 million dollar surplus (down from the 13 billion they inherited). But when you read down the list this surplus included the sale of 12 billion dollars in Canadian assets (in a buyer's market). Does this mean we already have an 11 billion dollar deficit? Sorry if I don't trust Flaherty but this kind of creative bookkeeping was typical of the Mike Harris gov't.

I've said it before and I'll say it again, Harper voted non confidence in his own government at a time when he thought he could win a majority, largely because he knows that if the cons books were opened, Canadians would find out how badly they have mismanaged the economy. Once Canadians find out the truth the tories will have a hard time ever getting elected again. When we finally do get to see the books, I''ll bet we are in a lot worse shape than the cons are admitting. They pissed away the surplus they inherited and are now forced to sell the furniture to pay the rent. What Canadian assets are they planning to sell? I've heard the CN tower mentioned, what else that we own are the cons going to sell to balance their books?

[normanchateau]

I've said it before and I'll say it again, Harper voted non confidence in his own government at a time when he thought he could win a majority, largely because he knows that if the cons books were opened, Canadians would find out how badly they have mismanaged the economy. Once Canadians find out the truth the tories will have a hard time ever getting elected again. When we finally do get to see the books, I''ll bet we are in a lot worse shape than the cons are admitting. They pissed away the surplus they inherited and are now forced to sell the furniture to pay the rent. What Canadian assets are they planning to sell? I've heard the CN tower mentioned, what else that we own are the cons going to sell to balance their books?

I think most Canadians are aware that Harper has mismanaged the huge federal surplus he inherited from the Liberals. Among his more stupid acts was giving Quebec an extra $3 billion per year beginning in 2008. Note how Quebec has used the money:

http://www.theglobeandmail.com/servlet/sto...budget2007/home

Stupid, stupid Harper. :angry:

[Alta4ever]

I think most Canadians are aware that Harper has mismanaged the huge federal surplus he inherited from the Liberals. Among his more stupid acts was giving Quebec an extra $3 billion per year beginning in 2008. Note how Quebec has used the money:

http://www.theglobeandmail.com/servlet/sto...budget2007/home

Stupid, stupid Harper. :angry:

oh you mean the one that the liberals got by raiding the EI surplus.

[normanchateau]

oh you mean the one that the liberals got by raiding the EI surplus.

Oh in that case it was a brilliant strategy for Harper to give Quebec another $3 billion per year from the EI surplus.

Stupid, stupid Harper. :angry:

[Jerry J. Fortin]

A surplus is a surplus. Why allow money not to do its job and preform its task, which is to circulate. It is the hording of money that detracts from its value. In terms of government spending, this goes double! How on earth could you allow tax dollars to rot? Either reduce the tax load, because you obviously didn't need the money considering that there is some left after programed spending, or shift the funds to some place where more spending is required.

[Toro]

The greatest con perpetrated on people is the dogma that tax cuts help the economy. It ranks right up there with the magic of blanket deregulation. Such a tax notion is so simplistic as to be pure nonsense. Moreover, there are no examples--let me repeat "no examples"--of tax cuts, as they are preached by simplistic conservatives, helping an economy.

Tax cuts on corporate income increase the corporate tax share as a percentage of GDP

http://www.cato.org/pubs/tbb/tbb_1107_49.pdf

Decreasing payroll taxes and instituting a flat corporate income tax would triple entrepreneurial activity.

http://www.nber.org/digest/nov02/w9015.html

Taxes on wireless services destroys more economic value than the tax revenues it brings in.

http://www.nber.org/digest/jan00/w7281.html

Higher tax rates on labor income and consumption expenditures lead to less work time in the legal market sector, more time working in the household sector, a larger underground economy, and smaller shares of national output and employment in industries that rely heavily on low-wage, low-skill labor inputs.

http://www.nber.org/digest/dec04/w10509.html

High Income Taxes Inhibit the Growth of Small Firms

http://www.nber.org/digest/apr01/w7980.html

Taxes Discourage Mutual Fund Investors

http://www.nber.org/digest/jul00/w7595.html

Differences in taxes across countries are a very important piece of the explanation for the vastly different levels of hours of market work hours of work in the United States were roughly the same in 1956 and 2004, while hours of work in Germany decreased by about 40 percent over this same period.

http://www.nber.org/digest/may07/w12786.html

Internet sales are highly sensitive to local taxation. People who live in high sales tax locations are significantly more likely to make purchases over the Internet.

http://www.nber.org/digest/may99/w6863.html

Estate taxes do have a negative impact on the accumulation of wealth. An estate tax rate of 50 percent (just below the current top rate) is associated with a reduction in the reported net worth of the richest half percent of the population of 10.5 percent.

http://www.nber.org/digest/mar01/w7960.html

U.S. equity Foreign Portfolio Investment in the average treaty country rose by over 90 percent relative to U.S. equity holdings in the average non-treaty country, in response to the large relative decrease in the dividend tax rate for corporations in treaty countries.

http://www.nber.org/digest/jul08/w13281.html

Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent.

http://www.nber.org/digest/mar08/w13264.html

Europe's failure to develop the kind of thriving service sector that has transformed the U.S. economy, a deficiency for which high taxes are largely to blame, is the main culprit behind the fact that over the last fifty years, hours worked in Europe have declined by almost 45 percent compared to hours worked in the United States. That's the conclusion of NBER Research Associate Richard Rogerson in Structural Transformation and the Deterioration of European Labor Markets (NBER Working Paper No. 12889). He finds that over the last half a century, European economies have suffered from a form of arrested development.

http://www.nber.org/digest/septoct07/w12889.html

Our data reveal a consistent and large adverse effect of corporate taxation on both investment and entrepreneurship. A 10 percentage point increase in the effective corporate tax rate reduces the investment to GDP ratio by about 2 percentage points, and the official entry rate by 1.3 percentage points ...

Recognizing that we have data on many developing countries, we also consider the effect of corporate taxes on the unofficial economy. We find that higher corporate taxes are associated with a larger unofficial economy, consistent with our findings on entry by official firms. This suggests that an important margin on which corporate taxation might influence macroeconomic outcomes is by keeping firms unofficial.

http://www.nber.org/confer/2007/pef07/shleifer.pdf

We examine the extent to which taxes on corporate income are shifted onto the workforce in the form of lower wages. We find that a significant part of the effective incidence of the tax falls on wages. Our central estimate is that 54% of any additional tax is passed on in lower wages, even in the short run; other estimates are larger than this. In the longer run, a $1 rise in the tax liability results in a fall in total employee compensation in excess of $1.

http://users.ox.ac.uk/~mast1732/RePEc/pdf/WP0707.pdf

And so on...

[punked]

pretty sure almost all of those come from right wing think tanks

[Jack Weber]

Right wing "think" tanks "thinking" that tax cuts will solve almost all social ills?

Don't be ridiculous...That's impossible!

[bush_cheney2004]

pretty sure almost all of those come from right wing think tanks

I can't resist: Is that because there are no "left wing" think tanks?