Liberals would lock in corporate taxes

[blueblood]

It is a great tax to get those poor people to pay taxes, I mean they have buy food and milk for their kids so we will get their tax money that way. Who cares if they have less of it to spend on milk just means they go a little hungry. Isn't that what Canada is about?

The only benefit I see from income tax cuts are the benefit of saving. Sure you can make your money and throw it in the bank, but you can't spend it. You can make more with interests, and investments, but you still cant spend it if you want to enjoy the tax cut.

It's like being out on a dinghy out on the ocean and marvelling how much water you have at your disposal, but its useless to you.

The GST is indirectly an income tax in itself. To get the best benefit out of tax cuts, both have to be cut.

[msj]

Well some business leaders agree that corporate taxes may be necessary (and/or other forms of taxation too - but, hey, business people can be as whiny as the rest of us and say "tax them because it's more efficient" and, in some quarters, it is believed...):

Executives say it's time to raise taxes

Can't say I disagree too much though.

Yes, I would prefer to see GST raised first before any other taxes.

I would also like to see the government find some spending cuts (although that would mean taking a close look at spending/budgets and we don't like doing that type of thing).

But, there's political reality and freezing corporate tax cuts makes the most sense in this context.

Edited March 30, 2010 by msj

[blueblood]

But, there's political reality and freezing corporate tax cuts makes the most sense in this context.

That would be all they could get away with because any other tampering with taxes would result in a definite hike, and there's the political reality of having to deal with that come election time.

Then there is some of the potential spending the Liberals might want to do. PMPM had a boat load of ideas just prior to being punted.

The 90's were an ideal situation to cut costs. A divided opposition for the better part of the decade to prevent paying the price at the polls, and not to mention the fact that Canada basically had a gun to its head to do something about its finances. I can't see a situation developing like that in quite some time.

[msj]

It is a great tax to get those poor people to pay taxes, I mean they have buy food and milk for their kids so we will get their tax money that way.

If you're gonna whine about the poor paying taxes then you really should use better examples than food and milk.

Tell you what, next time you go to the grocery store, buy milk, fruits, vegetables, maybe some rice, pasta, meat (no, not the already prepared and served for you as you sit down to eat food - I'm talking real food you take home and prepare yourself).

Then post your receipt here so we can see how much GST or PST your paid.

The amount, of course, will be $0.

[punked]

If you're gonna whine about the poor paying taxes then you really should use better examples than food and milk.

Tell you what, next time you go to the grocery store, buy milk, fruits, vegetables, maybe some rice, pasta, meat (no, not the already prepared and served for you as you sit down to eat food - I'm talking real food you take home and prepare yourself).

Then post your receipt here so we can see how much GST or PST your paid.

The amount, of course, will be $0.

You are right then I will heat my home so my family doesn't freeze to death and pay my HST on that, I will buy a sweater for my child because now we have less heat and pay HST on that, then I will turn off the lights because I am paying HST on the electric bill. Sales taxes hurt the poor.

[Bonam]

You are right then I will heat my home so my family doesn't freeze to death and pay my HST on that, I will buy a sweater for my child because now we have less heat and pay HST on that, then I will turn off the lights because I am paying HST on the electric bill. Sales taxes hurt the poor.

Your child should already have a sweater and lighting costs are negligible (really, they are, do the math).

[msj]

You are right then I will heat my home so my family doesn't freeze to death and pay my HST on that, I will buy a sweater for my child because now we have less heat and pay HST on that, then I will turn off the lights because I am paying HST on the electric bill. Sales taxes hurt the poor.

If you're in BC then you won't be paying HST on your hydro or child sized clothing. Not to mention a HST rebate to compensate.

If in ON, well, you get that large HST rebate which will more than make up for the HST for those who are poor.

It's the middle income tax payers that will truly be paying the HST (although the "rich" will also be paying a lot of it - but as a percentage of their income it won't bite as much, but, hey, that's why they pay progressive tax rates at 44+% for).

[Jack Weber]

Shady is the worst tax expert I know, if he is against I know it is a good idea.

Shady's a free market putz....

[capricorn]

Theoretically. It's a good question to ask. Not to say that you aren't right but I'd honestly like to see a statistic (not asking for it, I'd just like to see the study done) to see if there's a correlation between wages and lower corporate tax rates or whether that extra revenue is reinvested in another avenue.

There does appears to be a causal effect between higher corporate taxes and wages.

This study examines this correlation between

corporate tax rates and wages, and it

finds a causal relationship. States with comparatively

low corporate taxes have seen

wages rise beyond what they would have otherwise.

Specifically, a one percent drop in the

average tax rate leads to a 0.014 percent rise

in real wages five years later. In dollar terms,

that means wages rise $2.50 for every one

dollar reduction in state-local corporate income

taxes.

The reverse is also true: A one percent

hike in the average tax rate leads to a 0.014

percent drop in real wages, or roughly a

$2.50 loss in wages for each one-dollar rise

in corporate tax collections.

These results add to a growing literature

in the international arena that compares

changes in corporate tax rates and workers’

wages. Altogether, this body of work draws

into question the conventional wisdom that

corporate taxes add to the progressivity of the

tax system. If instead of burdening capital,

the corporate tax primarily burdens labor, as

this study finds, then the corporate income

tax does not add to the progressivity of the

tax system.

Key Findings:

• States with high corporate income taxes have depressed their workers’ wages over the long term, while states with low corporate

taxes have boosted worker productivity and real wages.

• This finding is consistent with other research focusing on the international trend towards lower tax rates: high corporate

taxes tend to depress real wages.

♦ According to this study, on average, between 1970 and 2007, a one-dollar increase in the average state-local corporate

tax rate caused a $2.50 dip in wages five years later, compared with lower-taxed states.

• A growing body of literature is showing that the burden of corporate income taxes falls predominantly on labor.

http://www.taxfoundation.org/files/sr169.pdf

It made sense to me that the more tax a company pays, the more it will look to cutting back wages to make up some of the difference.

[DrGreenthumb]

There does appears to be a causal effect between higher corporate taxes and wages.

http://www.taxfoundation.org/files/sr169.pdf

It made sense to me that the more tax a company pays, the more it will look to cutting back wages to make up some of the difference.

I don't buy it. Probably an average brought up up because the wages of those at the top went up by enough to boost the average. Also a $2.50 cent increase over 5 years should be expected if good work has been provided. Sounds like info put out by the corporations to convince government to shift the tax burden onto the worker. Do the wages and huge bonuses of the executives and managers get calculated into the average increase/decrease?

[capricorn]

I don't buy it.

I didn't think you would.

Sounds like info put out by the corporations to convince government to shift the tax burden onto the worker.

"Scott A. Hodge is president of the Tax Foundation in Washington, D.C., and is recognized as one of Washington's innovative thinkers on tax policy, the federal budget and government spending."

http://www.taxfoundation.org/staff/show/5.html

The head of the Tax Foundation is a "thinker" in the likes of Ignatieff, the greatest thinker of all, so he can't be that bad.

Do the wages and huge bonuses of the executives and managers get calculated into the average increase/decrease?

It would stand to reason.

[DrGreenthumb]

It would stand to reason.

Well then its meaningless. When the corporation is taxed less it pays the top few guys a LOT more money. That is the problem. Meanwhile the decrease in tax revenue will be made up for by the working class.

[blueblood]

Well then its meaningless. When the corporation is taxed less it pays the top few guys a LOT more money. That is the problem. Meanwhile the decrease in tax revenue will be made up for by the working class.

Those top few guys deserve that money. They take all the risk and make all the decisions. Not only that they have loads of experience and credentials. Some people make more money than others boo hoo. Instead of dipper supporters bitching about it, how about they get their ass to school, or get their ass to work.

By charging corporations less it allows them to spend more money, which results in more jobs all around. The revenue is made up from increased taxes on dividends and income from the shareholders of the corporation, the income taxes from the jobs created, and the sales tax from the crap that everyone buys.

If the poor want services from the gov't, the poor can bloody well pay for them.

[capricorn]

Meanwhile the decrease in tax revenue will be made up for by the working class.

What if you're wrong? What if the findings of the study I posted are true which shows lower business taxes generally result in higher workforce wages? I would think a dipper would applaud conditions that would improve the lot of the downtrodden. Perhaps you have a reference showing that lower taxes don't have an impact on wages, or that they result in lower wages?

[capricorn]

By charging corporations less it allows them to spend more money, which results in more jobs all around. The revenue is made up from increased taxes on dividends and income from the shareholders of the corporation, the income taxes from the jobs created, and the sales tax from the crap that everyone buys.

There's also the fact that lowering the rate would attract more foreign investment resulting in the creation of more jobs.

[Smallc]

There's also the fact that lowering the rate would attract more foreign investment resulting in the creation of more jobs.

We've already lowered the rate to half of what it was.

[blueblood]

We've already lowered the rate to half of what it was.

And how well did our economy do during that time and how much better after?

[Smallc]

And how well did our economy do during that time and how much better after?

Our economy is doing well. At the same time, there comes a point where you can't lower taxes and still maintain services.

[blueblood]

Our economy is doing well. At the same time, there comes a point where you can't lower taxes and still maintain services.

I'd be all for lowering taxes in relation to growth. The cuts would be small, but over time they would add up. If growth stops, freeze the cuts. Services can be cut, and ran more efficiently.

[Smallc]

Maybe a middle ground could be found, where the cuts were introduced over a period of 4 years or 6 years rather than two...?

[msj]

Sure, the government could continue to cut corporate taxes for med/large companies over many years.

We are talking 3% points though. From 18% to 15%.

Sure, the Laffer curve idiots will tell us that this is a big deal but it isn't.

To go from 29% to 18% is a big deal and will have a positive effect on our economy for many years to come.(I checked the corporate tax rate back in 1998 and 2000 and it's 29% rather than the 35% mentioned in an article that has been linked to earlier - but this takes into account abatement and other factors that may or may not be applicable depending on circumstances).

From 18% to 15%? Sure, it'd be nice but the benefits are nowhere near as great.

Also, keep in mind that the corporate tax cuts have been implemented slowly over the years - 29.12% in 2000 to 22.12% in 2007 to 19% in 2009 etc.... (these are just federal tax rates for public companies, provincial rates are on top of this).

Given all the accelerated write-offs the feds have allowed for various capital assets in the past few years, I wouldn't worry about a 3% point tax freeze.

[Mr.Canada]

The economy is on the way up due to the Tories corporate tax startegy. Like it or not, it's working. If the Liberals got power and raised corporate taxes that economic progress would evaporate.

[msj]

The economy is on the way up due to the Tories corporate tax startegy. Like it or not, it's working. If the Liberals got power and raised corporate taxes that economic progress would evaporate.

It's more like the Liberal/Tory corporate tax strategy.

Corporate taxes were scheduled to be cut under the Liberals and started to fall in 2001.

In fact, by the time the CPC got around to continuing with the scheduled tax cuts (with the 2006 budget), the corporate tax rate was already down to 22% (from 29%).

For 2009 it's down to 19%, so, thank you Harper for continuing with the last few years of tax cuts.

[Battletoads]

And how well did our economy do during that time and how much better after?

Well I remember being a lot richer back before the tax was cut in half...

[Jerry J. Fortin]

It is my hope that someday a government will come to power with the intent of reducing expenditures and cleaning up bureaucracy. I suggest that these things need to be done first before any simplistic slash and burn process is undertaken just to cut taxes. Corporate tax is one thing, and personal tax another. Four fifths of government tax revenue comes from personal income taxes and other forms of direct taxation. Only twenty percent comes from corporations. Last time I checked, corporations don't vote so it becomes a simple case of political economics to evade the true issues here.

We all need jobs, so why not just call a spade a spade and live with the reality. Corporations have lower rates, and in fact pay very little in taxes. Leave them alone, give them a tax holiday and see once and for all what the results, not predictions would be. I will suggest that corporations would flock to this nation from around the planet. That would mean jobs for us, and foreign investment for us. It would be a win then win again scenario.