Tories are again lowering the corporate Taxes

[Keepitsimple]

It's not just Ottawa:

Federal Tax

Provincial Tax

Municipal Property Tax

GST

User Fees

The important thing is Roles and Responsibilities. What services are we getting for our money and is it clear who is providing them? A good example is Healthcare and closely behind is Education. These are Provincial responsibilities where the Federal Government kicfks in a small portion through transfer payments.....but to hear some people talk about these issues, you'd think that it was the Federal Government who actually can "save Healthcare for a generation". In fact, the feds are just a convenient whipping boy when the Provinces run short of cash. As for whether cutting corporate taxes creates more corporate tax revenue....we've seen the opposite hold true. Back in Bob Rae's day, businesses were fleeing Ontario because of high tax rates. Love him or hate him, Mike Harris slashed taxes and businesses came back, revenues grew, and we were able to get back to investing in Education and Healthcare.......and lets not get into Harris bashing - he did his thing and got out.

[Wild Bill]

No one likes paying taxes. My general view of taxes is that a good tax incites less foolish behaviour in trying to avoid paying it. IMV, the measure of a tax, the way to judge a tax, is the potential foolishness of people to avoid paying it. A good tax is unavoidable.

The GST is a good tax. If you want to buy something, you pay GST.

Tax on liquor, gasoline or cigarettes are good. If you want booze, gas or smokes, you pay excise taxes.

Corporate taxes lead to all kinds of crazy accounting, legal nonsense in an effort to avoid them. They're a bad tax.

I don't mean to pick apart your model instead of your point, August but are you sure your 'good' examples truly fall into that category?

Millions of Canadians avoid paying the GST every day! The underground economy ballooned practically from the first day Mulroney inplemented his tax. The GST is certainly one of the taxes most avoided.

Liquour, gasoline or cigarettes? How much booze is smuggled and bootlegged every day? How many gas stations went out of business in border towns, from people buying their gas on the other side of the border? You don't need an expensive survey. Just go to any border town and try to find a gas station! There aren't nearly as many as in other towns. The only reason people buy domestic gas is if they live too far from the border.

Cigarettes? The OFFICIAL estimate here in Ontario is that over half of the cigarettes consumed are contraband from native factories and smuggling operations! Apparently, the government garners their stats by having people pick up butts from outside buildings and analyzing them to determine their source. The two biggest offenders? Schools and government buildings!

If the government admits to 50% the real number is likely much higher. Seems to me you couldn't find a better example of avoiding a tax.

Again, this doesn't change your point, just your examples.

Edited January 11, 2011 by Wild Bill

[DrGreenthumb]

. Back in Bob Rae's day, businesses were fleeing Ontario because of high tax rates. Love him or hate him, Mike Harris slashed taxes and businesses came back, revenues grew, and we were able to get back to investing in Education and Healthcare.......and lets not get into Harris bashing - he did his thing and got out.

No of course we can't bash Harris, but a drive by attack on Bob Rae is fine with you hey?

[Wild Bill]

No of course we can't bash Harris, but a drive by attack on Bob Rae is fine with you hey?

Dr. G, Rae DID drive business and their jobs out of Ontario! After he was gone and the business taxes were lowered, much business did come back.

Seems to me it's only fair to use Rae as an example of the point in discussion, when Rae fits the bill so perfectly.

Is it wrong to EVER use a politician's deeds as an example? Or only the ones you personally don't like?

[msj]

Bottom Line: msj doesn't like Conservatives/Reform. msj supports anyone who opposes Harper.

Hey, msj caters to clients like the rest of us.

Do you dispute the facts?

If so, check out the budget documents online at the Department of Finance's website for yourself.

Bottom line: I put the facts in front of people rather than try an ad hominem attack because I don't wear ad hominem attacks like you do (because I don't have as much practice).

[eyeball]

I don't mean to pick apart your model instead of your point, August but are you sure your 'good' examples truly fall into that category?

Millions of Canadians avoid paying the GST every day! The underground economy ballooned practically from the first day Mulroney inplemented his tax. The GST is certainly one of the taxes most avoided.

Liquour, gasoline or cigarettes?

Speaking of avoiding taxes, anyone figure out a way around property tax? Mine looks set to go up given how they just jacked up the value of our land by some 300% this year.

If they're making an offer, I accept.

[guyser]

Speaking of avoiding taxes, anyone figure out a way around property tax? Mine looks set to go up given how they just jacked up the value of our land by some 300% this year.

If they're making an offer, I accept.

Search comparable properties that sold recently and file an appeal . MVA people are notoriously lazy to do the job properly so do it for them and win .

[Evening Star]

Dr. G, Rae DID drive business and their jobs out of Ontario! After he was gone and the business taxes were lowered, much business did come back.

Seems to me it's only fair to use Rae as an example of the point in discussion, when Rae fits the bill so perfectly.

Is it wrong to EVER use a politician's deeds as an example? Or only the ones you personally don't like?

It's worth remembering, though, that Rae took power during a nationwide recession, which he certainly did not cause, one that was significantly worse in Canada than the most recent recession was. Ontario was heavily hit, with our manufacturing sector crashing. NAFTA did not help this. I wouldn't claim that Rae's government handled the situation brilliantly but I also don't think that the economic troubles of the time can be blamed entirely on his government, let alone their tax policies. And how high were corporate taxes under Rae anyway? I can't find the rates anywhere but it was never my impression that he raised them to extreme or unprecedented levels. As far as I remember, the changes in economic policy were fairly modest.

Btw, looking just at the rates, corporate tax in the US seems steeper than ours: http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#Federal_tax_rates

What am I missing? Is it the combination of federal and provincial rates?

[Smallc]

Btw, looking just at the rates, corporate tax in the US seems steeper than ours: http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#Federal_tax_rates

What am I missing? Is it the combination of federal and provincial rates?

US corporate taxes are higher.

[msj]

Btw, looking just at the rates, corporate tax in the US seems steeper than ours: http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#Federal_tax_rates

What am I missing? Is it the combination of federal and provincial rates?

Rates are lower in Canada but you are missing the provincial rates which need to be added to the federal.

So, a corporation (not qualifying as a small business) in Ontario is looking at a combined tax rate of ~31% (I split the difference between 14% and 12% rate for July 1, 2010 - results will vary by fiscal year end etc).

[Evening Star]

Do we really have flat corporate taxes, without even the brackets that the US has? Hm, I didn't totally realize that until now.

[robert_viera]

Federal Tax Revenue - Income Tax:

2007-2008:

Personal $113,062,564,000.00

Corporate $40,627,679,000.00

2008-2009:

Personal $116,024,280,000.00

Corporate $29,475,891,000.00

2009-2010:

Personal $103,947,000,000.00

Corporate $30,361,000,000.00

Source: Public Accounts of Canada

[Evening Star]

Ah, so revenue was in fact greater in the last year with the old 21% tax rate.

[eyeball]

Search comparable properties that sold recently and file an appeal . MVA people are notoriously lazy to do the job properly so do it for them and win .

We're on it and the whole neighbourhood is singing from the same hymn book too.

[August1991]

Millions of Canadians avoid paying the GST every day! The underground economy ballooned practically from the first day Mulroney inplemented his tax. The GST is certainly one of the taxes most avoided.

Liquour, gasoline or cigarettes? How much booze is smuggled and bootlegged every day? How many gas stations went out of business in border towns, from people buying their gas on the other side of the border? You don't need an expensive survey. Just go to any border town and try to find a gas station! There aren't nearly as many as in other towns. The only reason people buy domestic gas is if they live too far from the border.

Cigarettes? The OFFICIAL estimate here in Ontario is that over half of the cigarettes consumed are contraband from native factories and smuggling operations! Apparently, the government garners their stats by having people pick up butts from outside buildings and analyzing them to determine their source. The two biggest offenders? Schools and government buildings!

WB, I chose my examples deliberately.

Compare GST evasion and income tax evasion. It is easier to evade income tax than GST. (At least your local carpenter pays GST on his materials.)

Liquor and gasoline, it is hard to avoid these taxes. Cigarettes? This is my key example and I'm happy that you mention it. Because cigarette excise taxes are so high, they encourage foolish behaviour as people drive out of the city and seek tax-free cigarettes. A better cigarette tax would be lower - and that's precisely my point.

Harper is wise to lower Canada's corporate taxes for the same reason provinces would be wise to lower cigarette excise taxes.

Do you dispute the facts?

Not really. (Some of your conjectures have no basis. For example, how do you know that a change of the corporate tax from 19% to 16% will have little effect?)

But msj, you spin the facts while pretending to be objective. The fact is, you don't like Harper or Reformers.

Edited January 12, 2011 by August1991

[msj]

Ah, so revenue was in fact greater in the last year with the old 21% tax rate.

Maybe so but you have to also consider other factors like:

1) Total corporate taxable income

2) Losses being carried forward and being applied in the current year

3) Losses that have been carried forward from current year to prior year(s)

4) Accelerated depreciation (for example, certain computer technology is 100% deductible if purchased within certain dates)

etc....

So, once again, I would like to see a study done by a real economist who considers such factors before coming to conclusions based on a very poor data set.

[Evening Star]

Fair point, msj.

August, I'm not sure how well that analogy holds. Our cigarette taxes are pretty steep but I'm not sure that our corporate taxes are in the same way, even compared to the United States'.

[dre]

WB, I chose my examples deliberately.

Compare GST evasion and income tax evasion. It is easier to evade income tax than GST. (At least your local carpenter pays GST on his materials.)

Liquor and gasoline, it is hard to avoid these taxes. Cigarettes? This is my key example and I'm happy that you mention it. Because cigarette excise taxes are so high, they encourage foolish behaviour as people drive out of the city and seek tax-free cigarettes. A better cigarette tax would be lower - and that's precisely my point.

Harper is wise to lower Canada's corporate taxes for the same reason provinces would be wise to lower cigarette excise taxes.

Not really. (Some of your conjectures have no basis. For example, how do you know that a change of the corporate tax from 19% to 16% will have little effect?)

But msj, you spin the facts while pretending to be objective. The fact is, you don't like Harper or Reformers.

Lowering taxes so that people cheat less is silly. If people are evading taxes than you need to close loopholes and crack down on tax evaders. People arent going to stop cheating and evading just because taxes go down.

[August1991]

Lowering taxes so that people cheat less is silly. If people are evading taxes than you need to close loopholes and crack down on tax evaders. People arent going to stop cheating and evading just because taxes go down.

Dre, what fantasy world do you live in? I live in the real world.

Heck, even Mick Jagger left England because of taxes.

Speaking of avoiding taxes, anyone figure out a way around property tax?

Bribe, seduce the municipal appraiser. Somehow reclassify/rezone your property.

In general, property tax is the best tax of all. You can't avoid it (unless you sell the property) and it captures changes in environmental value. Location, location, location.

[bush_cheney2004]

Dre, what fantasy world do you live in? I live in the real world.

Heck, even Mick Jagger left England because of taxes.

Indeed....really pissed off George Harrison too:

Let me tell you how it will be,

There’s one for you, nineteen for me,

‘Cause I’m the Taxman,

Yeah, I’m the Taxman.

Should five per cent appear too small,

Be thankful I don’t take it all.

‘Cos I’m the Taxman,

Yeah, I’m the Taxman.

(If you drive a car ), I’ll tax the street,

(If you try to sit ), I’ll tax your seat,

(If you get too cold ), I’ll tax the heat,

(If you take a walk ), I’ll tax your feet.

Taxman.

‘Cause I’m the Taxman,

Yeah, I’m the Taxman.

Don’t ask me what I want it for

(Taxman! Mister Wilson!)

If you don’t want to pay some more

(Taxman! Mister Heath!),

‘Cause I’m the Taxman,

Yeah, I’m the Taxman.

Now my advice for those who die, (Taxman!)

Declare the pennies on your eyes, (Taxman!)

‘Cause I’m the Taxman,

Yeah, I’m the Taxman.

And you’re working for no-one but me,

(Taxman).

[August1991]

US corporate taxes are higher.

Stated US corporate tax rates are higher. Effective US rates are another story.

[msj]

Not really. (Some of your conjectures have no basis. For example, how do you know that a change of the corporate tax from 19% to 16% will have little effect?)

But msj, you spin the facts while pretending to be objective. The fact is, you don't like Harper or Reformers.

Sure, it's conjecture.

One would expect that a 32% cut in income taxes (from 28% points to 19% points) would have a bigger impact than a mere 13% cut from 19% to 16%.

It even seems reasonable conjecture at that.

But, I suppose I'm "pretending to be objective" by showing the fact that 32% > 13%?

Still, much more reasonable than your ad hominem nonsense.

[msj]

Stated US corporate tax rates are higher. Effective US rates are another story.

Effective CDN taxes are also another story.

[dre]

Dre, what fantasy world do you live in? I live in the real world.

Heck, even Mick Jagger left England because of taxes.

Bribe, seduce the municipal appraiser. Somehow reclassify/rezone your property.

In general, property tax is the best tax of all. You can't avoid it (unless you sell the property) and it captures changes in environmental value. Location, location, location.

Dre, what fantasy world do you live in? I live in the real world.

No you live in an world of fantasies and fairy tails. If you think the massive tax evasion industry is going to go away because you lower the rate a percentage and a half I have a used bridge you might be interested in.

[Wild Bill]

Ah, so revenue was in fact greater in the last year with the old 21% tax rate.

Be fair, Star! You're choosing the very next year, which is too short a time frame to see strong effects from tax level changes. You're also choosing a year of deep recession. A few percent cut from the corporate tax rate was hardly going to save many businesses fighting a global depression!

You really should give it a bit of time. Maybe pick a year of more ordinary circumstances, too.