August1991 Posted March 29, 2011 Report Posted March 29, 2011 (edited) I was clear that I was was talking about foreign corporations which have few shareholders in Canada. If the profits are not taxed by the Canadian government then money that goes to shareholders is not taxed either. It is rather unfair to tax the employees and customers but not the shareholders.So I guess you're making the argument that corporate taxes are a way for the Canadian government to tax foreign shareholders. There are better ways of doing that: for example, through withholding taxes. Of course, we have tax agreements so that Canadian holders of foreign shares get equal treatment. And that really strikes at the heart of your argument. If we try to tax foreign shareholders, they will just invest their money elsewhere.Don't get me wrong. There are ways we can tax foreigners but corporate taxes are not necessarily the best way to do it. ---- The best taxes are ones that are difficult to avoid - as long as we keep in mind that taxes should also be fair. Corporate taxes are too easy to avoid and don't tax rich people. That's why most jurisdictions have reduced them or give numerous exemptions. You mean it doesn't affect the earnings of major shareholders? If this is true that corporate taxes can just be deferred to the consumer, why are they moving headquarters's to fake addresses in the Cayman Islands, and other tax free zones to reduce corporate taxes owed in the U.S. and Canada?Shareholders resident in Canada must pay income tax on unsheltered investments whether the corporation has its headquarters in Anticosti, Cayman Islands or Timbuctou.As for your link, the CCPA is a left wing research group with an obvious agenda. If I have time, I'll look at your link in more detail. But here's one thought to chew on. In the past 40 years or so, women have dramatically increased their labour participation rate and now dominate university enrollments. Moreover, like it or not, educated, high-earning women tend to marry educated, high-earning men. The effect is that we would see greater extremes of family incomes now compared to 40 years ago. What do you propose the government do about this, if anything? Edited March 29, 2011 by August1991 Quote
cybercoma Posted March 29, 2011 Report Posted March 29, 2011 If a government wants to tax rich people, it should do so directly. Taxing corporations is a dumb way to tax because it's not clear who is getting taxed.It's perfectly clear who is being taxed. Corporations, in the United States anyway, are considered a legal person (at least they have the same rights). Given that, they ought to have the same responsibilities as legal persons as well. Quote "Ridicule is the only weapon which can be used against unintelligible propositions." --Thomas Jefferson
M.Dancer Posted March 29, 2011 Report Posted March 29, 2011 It's perfectly clear who is being taxed. Corporations, in the United States anyway, are considered a legal person (at least they have the same rights). They don't have the right to vote, drive or drink. Quote RIGHT of SOME, LEFT of OTHERS If it is a choice between them and us, I choose us
bush_cheney2004 Posted March 29, 2011 Report Posted March 29, 2011 They don't have the right to vote, drive or drink. ...or get abortions! Quote Economics trumps Virtue.
TimG Posted March 29, 2011 Report Posted March 29, 2011 There are better ways of doing that: for example, through withholding taxes.Withholding taxes only work if the corporation a Canadian entity. You cannot impose withholding taxes on foreign corporate payouts to their shareholders. Taxing the profits made by their Canadian operations is the only way to impose a tax on their shareholders. Quote
August1991 Posted March 30, 2011 Report Posted March 30, 2011 (edited) Withholding taxes only work if the corporation a Canadian entity. You cannot impose withholding taxes on foreign corporate payouts to their shareholders. Taxing the profits made by their Canadian operations is the only way to impose a tax on their shareholders.That's the point Tim. You can't tax them because they wouldn't come here in the first place if you tried.It's perfectly clear who is being taxed. Corporations, in the United States anyway, are considered a legal person (at least they have the same rights). Given that, they ought to have the same responsibilities as legal persons as well.Cyber, you can declare a corporation a "person" if you want but the government can't make corporations pay taxes. At some point or another, the tax will fall on an individual: whether it is a shareholder, a customer or an employee of the corporation.It is possible for the government to impose taxes on crown natural resources but this is just a tax on people too. My point in response to the OP is that people are wrong to think that "corporate taxes" fall on rich, evil corporations. Corporate taxes may not even fall on "rich shareholders". Tim's argument is that "corporate taxes" are paid by foreign shareholders but I argued that there are better ways to tax foreigners than corporate taxes. In short, "corporate taxes" sound like a good idea (some rich anonymous entity pays for my government services) but in fact they are not. A general rule is that good taxes are difficult to avoid, and are fair. Corporate taxes meet neither of those criteria and most wise governments don't use them anymore. Edited March 30, 2011 by August1991 Quote
TimG Posted March 30, 2011 Report Posted March 30, 2011 That's the point Tim. You can't tax them because they wouldn't come here in the first place if you tried.You are missing the point. There are three types of corporations operating in Canada: Canadian corporations, foreign Canadian corporations and foreign corporations. Foreign corporations make money in Canada yet this money cannot be taxed if it is payed out to shareholders because the payments to shareholders are controlled by another government. The only way to tax the shareholders of those corporations is to tax the corporation. Quote
Bonam Posted March 30, 2011 Report Posted March 30, 2011 (edited) You are missing the point. There are three types of corporations operating in Canada: Canadian corporations, foreign Canadian corporations and foreign corporations. Foreign corporations make money in Canada yet this money cannot be taxed if it is payed out to shareholders because the payments to shareholders are controlled by another government. The only way to tax the shareholders of those corporations is to tax the corporation. How are these foreign corporations that operate in Canada not taxed in Canada? What do they do here? Do they employ workers here? Sell goods or services here? Extract resources here? Transport items here? All of these activities are taxed and/or require payment of fees to Canadian bodies. Edited March 30, 2011 by Bonam Quote
TimG Posted March 30, 2011 Report Posted March 30, 2011 (edited) How are these foreign corporations that operate in Canada not taxed in Canada? What do they do here? Do they employ workers here? Sell goods or services here? Extract resources here? Transport items here? All of these activities are taxed and/or require payment of fees to Canadian bodies.They do everything that a Canadian corporation does - except their shareholders pay no tax to Canada. This is an inequity that can only be rectified by corporate taxation.Here is a link describing the distinction under Canadian law: http://www.lowtax.net/lowtax/html/offon/canada/can_business.html Edited March 30, 2011 by TimG Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.