Corporate tax cuts/breaks don't create jobs!

[CPCFTW]

According to the economic development agency Invest Quebec, 86 companies and 8,236 jobs have migrated to Quebec as a result of a government program under which 37.5 percent of a video game company's payroll is subsidized by the majority French-speaking province in the form of a refundable tax credit.

Put another way, for every dollar a video game company spends on paying its development staff, it receives 37.5 cents from the Quebec government.

http://ca.reuters.com/article/technologyNews/idCATRE7815FN20110902

I suppose the hippies don't mind these corporate tax breaks because they are funding the "arts"?

Stop the evil corporate elites and the race to the bottom!!! Give the US its jobs back!!

Edited September 3, 2011 by CPCFTW

[TimG]

I suppose the hippies don't mind these corporate tax breaks because they are funding the "arts"?

To be fair those tax breaks are really subsidies to the employees who are earning 60% more than they should be getting given the market demand for their services.

More importantly, the question is how many jobs are lost because the government subsidizes the workers in this industry.

Edited September 4, 2011 by TimG

[William Ashley]

To be fair those tax breaks are really subsidies to the employees who are earning 60% more than they should be getting given the market demand for their services.

More importantly, the question is how many jobs are lost because the government subsidizes the workers in this industry.

They can but there is no guarantee unless the tax breaks only apply to new positions. Example up to 10% of corporate taxes can go to personnel with salaries under $80,000 etc.. or under $50,000 depending on the target of job creation salary range. This same could be used to increase the median wages giving payroll, or a staff to income ratio. For every $100,000 of taxable net taxable income can be applied to salary of up to $50,000 example 50% tax cuts but those 50% have to be applied to new job starts, and salaries for new jobs can only go up to $xx,xxx to target unemployment reduction.

In my policy plan - RIGHT TO WORK, the baseline salary of my job start ups is approx $20,000 (plus potential bonus on profit / work share) - this outright means that companies could start job starts at $20,000 and offset the governments need to socialize a segment of the workforce to insure employment. The threshold I would aim to give tax free employment would be $20,000-$30,000 in tax savings to employers for each job start up (prorated for period of personnel employment).

The issue is that private job start ups directly translates to increased public debt unless profits meet or exceed the cost of employment meaning each start up needs to generate an additional 20-30k in taxable costs, meaning each employment start up needs to yield a 200% return on investment.

The reason is that in my plan, for the first 15 years corporations pay down the debt, while the public pays for their services and at minimum balances the debt interest payments. Start ups thus would need to be in the 30k to 40k range so individuals were fully accountable for their own debt tax interest - this would in turn create a higher corporate tax rate - sans paid down debt variance since my corporate tax rate is locked into the public debt amount.

This would require private start ups to only be 25%-50% tax deductible and requiring the position to have a salary of at least 30k but ideally 40k.

This is doable though.

IF you want jobs your breaks need to be DIRECTLY related to jobs.

You can think, the more they have the more they spend.

In reality it is

The more they have the more they keep.

Money makes money, not wings.

Unless you are going for a pilots license. In that case Money makes wings and like the pub wings makes money.

Edited September 4, 2011 by William Ashley

[dre]

IF you want jobs your breaks need to be DIRECTLY related to jobs.

These is pretty obvious... followers of the no-tax religion usually oppose the idea of targetted tax cuts or making hiring workers a condition to qualify for rebates or subsidies, because at the end of the day theyre simply using jobs as an excuse to get the tax breaks they want.

At this point anyone that believes in trickle down economics is not paying attention. Taxation is actually one of the least important factors in economic growth, and have a lot more to do with educational surpluses than anything else. Growing the economy is tied way more tightly to educating the workforce than anything else.

Edited September 4, 2011 by dre

[Topaz]

If you look at the job banks you'll see that the businesses are getting their tax breaks but most are just hiring part timers, some less than 20 hours per week. They don't want to pay any benefits and some small businesses need more help but they refuse to hire anymore. So tell me, how are the Tories corporate tax cuts helping to create jobs? My neigbour's son has to travel 2 hours for his job,, which is only partime, there's no jobs in this area, and he's only doing in hopes of getting on full time. His parents are paying for the gas which could be up 150.00 weekly and he has to travel everything friday, two hours, to get his paycheque because the owner won't go automatic deposit because of the cost! As far as I'm concern, these corporate taxes cuts, help more ministers who own businesses, than the workers.

[Newfoundlander]

Corporations don't pay taxes, their customers do.

[Saipan]

Most jobs are lost by union's demand for higher wages and minimum wage laws - demanded by unions.

Government and unions don't create jobs.

[TimG]

I think it would be worthwhile to have some numbers.

Here are the profit margins by industry category:

http://www.dailymarkets.com/economy/2011/05/12/oil-industry-profit-margin-ranks-114-out-215/

Application Software is 22.7% (I am not sure if computer games fall in this category).

This means a profitable business makes a spends $100 million makes $122 million.

Corporate taxes at 50% would be $11 million.

In the case of software 80% of the cost of sales is labour.

$80 million * 37.5% = $30 million.

The bottom line is these job subsidies are bloody expensive and cannot be paid for with corporate taxes.

The money to pay these job subsidies must come from consumers.

This is why job subsidises are only used in 'sexy' industries. They are simply too expensive.

These number also show why their effect is apparently larger that simple tax breaks.

No company will turn down a subsidy that is double their total profit.

No tax break can compete with that.

The one virtue of tax breaks is they are not a 'subsidy' that takes money from other taxpayers and gives it to a company. This makes them sustainable and scalable.

Edited September 4, 2011 by TimG

[William Ashley]

I think it would be worthwhile to have some numbers.

Here are the profit margins by industry category:

http://www.dailymarkets.com/economy/2011/05/12/oil-industry-profit-margin-ranks-114-out-215/

Application Software is 22.7% (I am not sure if computer games fall in this category).

This means a profitable business makes a spends $100 million makes $122 million.

Corporate taxes at 50% would be $11 million.

In the case of software 80% of the cost of sales is labour.

$80 million * 37.5% = $30 million.

The bottom line is these job subsidies are bloody expensive and cannot be paid for with corporate taxes.

The money to pay these job subsidies must come from consumers.

This is why job subsidises are only used in 'sexy' industries. They are simply too expensive.

These number also show why their effect is apparently larger that simple tax breaks.

No company will turn down a subsidy that is double their total profit.

No tax break can compete with that.

The one virtue of tax breaks is they are not a 'subsidy' that takes money from other taxpayers and gives it to a company. This makes them sustainable and scalable.

It isn't too expensive. You just need to get it from where it will hurt the least.

For instance my system cycles down based on $10000 thresholds. Funds to put to work 3 Million Canadians runs at about 75 Billion dollars. But in turn it creates productivity.

The voodoo is very simple.

Either people consume and do not contribute or they consume and they produce.

Goods cost does not reflect the labour to produce them.

Something costing $500 may only have a $20 input. The costs are relative.

In order to give private entities the option contra the government to "just take the money from the public/private to insure training and utilization of human resources, it gives companies an option to take a portion of allocated funds for job start ups.

Provided they insure that individuals contribute meaning that $20,000 on a salary of upward of $30,000. Meaning the private entity gets up to 66% of those funds from tax deductions.

[William Ashley]

I think it would be worthwhile to have some numbers.

Here are the profit margins by industry category:

http://www.dailymarkets.com/economy/2011/05/12/oil-industry-profit-margin-ranks-114-out-215/

Application Software is 22.7% (I am not sure if computer games fall in this category).

This means a profitable business makes a spends $100 million makes $122 million.

Corporate taxes at 50% would be $11 million.

In the case of software 80% of the cost of sales is labour.

$80 million * 37.5% = $30 million.

The bottom line is these job subsidies are bloody expensive and cannot be paid for with corporate taxes.

The money to pay these job subsidies must come from consumers.

This is why job subsidises are only used in 'sexy' industries. They are simply too expensive.

These number also show why their effect is apparently larger that simple tax breaks.

No company will turn down a subsidy that is double their total profit.

No tax break can compete with that.

The one virtue of tax breaks is they are not a 'subsidy' that takes money from other taxpayers and gives it to a company. This makes them sustainable and scalable.

It isn't too expensive. You just need to get it from where it will hurt the least.

For instance my system cycles down based on $10000 thresholds. (People can live on $10,000, they can live ok on $20,000, an individual on $30,000 should be able to live a nice lifestyle. 40/50/60k you are getting into family / dependent / drug habit /addiction territory --- this system then has $10,000 increases on cycle share for poverty reduction initiatives. The tax system only addresses poverty and essential services -- as the basic role that public fees should defaultively exist on.. everything else should be a service people can opt for. Funds to put to work 3 Million Canadians runs at about 75 Billion dollars. But in turn it creates productivity.

The voodoo is very simple.

Either people consume and do not contribute or they consume and they produce.

Goods cost does not reflect the labour to produce them.

Something costing $500 may only have a $20 input. The costs are relative.

In order to give private entities the option contra the government to "just take the money from the public/private to insure training and utilization of human resources, it gives companies an option to take a portion of allocated funds for job start ups.

Provided they insure that individuals contribute meaning that $20,000 on a salary of upward of $30,000. Meaning the private entity gets up to 66% of those funds from tax deductions.

The US only offers a 6.2% payroll incentive

http://tinyurl.com/yaz4akc

These incentives in my program would come on a first come first serve basis for amounts exceeding the debt paydown quota. So they would be available as much as extra funds exist to meet the debt repayment schedule on the 15 year timeframe.

Awards would be done on a day by day basis awarding job starts to companies from those startup funds on a split capita ratio of the companies on the share of debt repayment fees they pay.

Private Entity pays more they have more starts available.

Private Entities can transfer their start deduction to another party.

This number is done on an annual basis and would redistribute unused start deductions at the end of each month reassigning starts - so they have to use it or they loose it (or it gets reduced).

The debt paydown quota is an amount that varies year on year to insure debt repayment within 15 years.

The actual amount paid is the amount of debt interest + any extra funds to pay down the debt (this comes from people who pay down their own personal portion of the public debt, or those who help others pay down their potion of the public debt).

Corporate entities in turn pay a mirror of the amount the public paid - at minimum the debt interst amount that would be applied directly to paying down the debt. Extra funds would be a floating point but deductions would be provided from this amount. The debt interest amount also reduces by about 6.7% each year at minimum - but could be much larger initially meaning base corporate taxes would reduce by just under 7% of their value each year - so 7% of 15% year on year.

or about 1% each year. In reality it could be more than 1%.

Unlike the Harper government these moves would not result in debt increase or deficit.

I don't think people want a command economy - I think people need a strong mixed economy, that insures the best productivity, lowest taxes, and freest government and people - one without debts, and obligations to private entities.

The Social Goals are:

-REMOVAL OF FEDERAL INCOME TAX, AND REMOVAL OF THE FEDERAL DEBT WITHIN 15 YEARS

-THE RIGHT TO WORK FOR ALL, AND A FREE EDUCATION FOR CITIZENS

-A PRIVATE MEDICAL SYSTEM BOTH THE POOR HAVE FREE ACCESS TO AND THE RICH HAVE NO NEED TO BECOME POOR TO HAVE ACCESS

- A SECURE NATIONAL COMPUTING NETWORK FOR BUSINESS, COMMUNICATION AND GOVERNMENT ACTIVITIES

- NO NEED TO HAVE A PRIVATE BANK ACCOUNT

- NO NEED TO FILE TAXES

- SECURE NEIGHBORHOODS, WHILE EMPOWERING THE PEOPLE

- A PEOPLE'S ASSEMBLY TO FORM A DIRECT FEEDBACK AND ADVISORY WHERE EVERY CITIZEN HAS A VOTE ON EVERY ISSUE.

- A SIMPLIFIED JUSTICE SYSTEM, AND THE OPTION OF PRODUCTIVE PENAL TIME

- THE REMOVAL OF POVERTY

- A CLEANER AND MORE RESOURCEFUL NATION

- SOCIAL EQUALITY, AND SOCIAL JUSTICE.

Edited September 5, 2011 by William Ashley

[Evening Star]

To be fair those tax breaks are really subsidies to the employees who are earning 60% more than they should be getting given the market demand for their services.

Yeah, this is really far from a supply-side-style tax break. (I'm a little more favourably disposed towards it than you are, though.)

Edited September 5, 2011 by Evening Star

[Rick]

Most jobs are lost by union's demand for higher wages and minimum wage laws - demanded by unions.

Government and unions don't create jobs.

Yes, god forbid that anyone should be looking out for the workers best interests and ensuring they get treated fairly.

I mean the gall of some people to dare cut into the CEO's golfing budget....

If Conservatives had their way, we'd all be working in sweatshops.

Or they'd legalise slavery.

[Rick]

If you look at the job banks you'll see that the businesses are getting their tax breaks but most are just hiring part timers, some less than 20 hours per week. They don't want to pay any benefits and some small businesses need more help but they refuse to hire anymore. So tell me, how are the Tories corporate tax cuts helping to create jobs? My neigbour's son has to travel 2 hours for his job,, which is only partime, there's no jobs in this area, and he's only doing in hopes of getting on full time. His parents are paying for the gas which could be up 150.00 weekly and he has to travel everything friday, two hours, to get his paycheque because the owner won't go automatic deposit because of the cost! As far as I'm concern, these corporate taxes cuts, help more ministers who own businesses, than the workers.

You've nailed it.

Corporate tax cuts have done nothing to help out the workers. What should be abolished are temp agencies which more and more companies are utilizing as a means to get out of paying workers full time wages and benefits.

[TimG]

What should be abolished are temp agencies which more and more companies are utilizing as a means to get out of paying workers full time wages and benefits.

Right. You want companies to hire more and your solution is to make it even more expensive to hire people? You are crazy if you believe that would do anything other than increase the unemployment rate even more than it is today.

[WWWTT]

Yes,corporate tax cuts create lots of jobs!

Lots of jobs for people who shuvle money into the trunks of CEO's or what I call "money shuvlers"

And if the "money shuvlers" ever get laid off or ever find themeselves struggling,our country will become plaged with chronic unemployment followed by terrorists.

The only way to prevent this is to increase corporate tax cuts and buy the best fighter jets money can buy!Lots of them!

WWWTT

[Rick]

Right. You want companies to hire more and your solution is to make it even more expensive to hire people? You are crazy if you believe that would do anything other than increase the unemployment rate even more than it is today.

As opposed to the current working poor who are expected to work for peanuts and no benefits because corporations are too bloody cheap to employ them directly and give them full time wages plus benefits.

Lordy...we can't cut into the corporate pigs trough to feed the slaves now can we.

Keep it up, please keep your neanderthal slavery loving ways of thinking because it's exactly the fuel that will ignite the uprising here that we are witnessing everywhere else in the world.

[Wild Bill]

Yes, god forbid that anyone should be looking out for the workers best interests and ensuring they get treated fairly.

I mean the gall of some people to dare cut into the CEO's golfing budget....

If Conservatives had their way, we'd all be working in sweatshops.

Or they'd legalise slavery.

The problem is not with the idea of unions or collective bargaining. Rather, it is with the innate intelligence of most unions.

Virtually all unions in the western world were formed during times when their companies market was mostly domestic. They competed with other domestic companies and "split the pie" according to domestic factors.

The problem today is that few if any unions have paid any attention to the fact the world has changed! Their companies' competitors are now global. Unions are making demands that companies can no longer afford. If they give in, they will simply go bankrupt, either in a short time or a bit longer one.

Here in Hamilton we watched for years as the Steel company offered various profit sharing schemes, to try to tie their labour costs to their profitability.

The union flat out rejected the very idea every single time!

Now we have the local union out on strike for nearly a year, mostly over the pension scheme for new hires. Amazingly, their negotiating committee won't even allow their membership to vote, for fear they might disagree with their leadership's stance!

The union leadership is demanding a deal that no other steel company anywhere in North America gives! The company really has no choice. They have over 9,000 pensioners and only 985 or so workers! That's a 10 to 1 ratio of those making the company money and those draining it! How can ANY company stay profitable in such a situation? I understand the situation with the car companies is even worse, especially with GM.

If unions would only recognize the new factors it would make their demands much more reasonable.

[TimG]

As opposed to the current working poor who are expected to work for peanuts and no benefits because corporations are too bloody cheap to employ them directly and give them full time wages plus benefits.

Your avoided my question: do you think that increasing the cost of employing people will lead to more or less jobs?

The fact is, no matter what your opinion of corporations, increasing the cost of employing workers will result in them hiring *fewer* workers. So all you would do would make like better for a few while making life worse for people in general.

In any case, I thought the left was all hot about 'jon sharing' and 'reduced work weeks' to keep people employed.

[Rick]

The problem is not with the idea of unions or collective bargaining. Rather, it is with the innate intelligence of most unions.

Virtually all unions in the western world were formed during times when their companies market was mostly domestic. They competed with other domestic companies and "split the pie" according to domestic factors.

The problem today is that few if any unions have paid any attention to the fact the world has changed! Their companies' competitors are now global. Unions are making demands that companies can no longer afford. If they give in, they will simply go bankrupt, either in a short time or a bit longer one.

Here in Hamilton we watched for years as the Steel company offered various profit sharing schemes, to try to tie their labour costs to their profitability.

The union flat out rejected the very idea every single time!

Now we have the local union out on strike for nearly a year, mostly over the pension scheme for new hires. Amazingly, their negotiating committee won't even allow their membership to vote, for fear they might disagree with their leadership's stance!

The union leadership is demanding a deal that no other steel company anywhere in North America gives! The company really has no choice. They have over 9,000 pensioners and only 985 or so workers! That's a 10 to 1 ratio of those making the company money and those draining it! How can ANY company stay profitable in such a situation? I understand the situation with the car companies is even worse, especially with GM.

If unions would only recognize the new factors it would make their demands much more reasonable.

So your answer is, to permit U.S. Steel to extort concessions on pensions despite the legal commitments it made to the Government of Ontario when it promised to maintain the current pension regime until 2015.

U.S. Steel also closed down production which is in direct violation of commitments it made under the Investment Canada Act.

I find it curious how you fail to mention that small detail...

Edited September 5, 2011 by Rick

[Rick]

Your avoided my question: do you think that increasing the cost of employing people will lead to more or less jobs?

The fact is, no matter what your opinion of corporations, increasing the cost of employing workers will result in them hiring *fewer* workers. So all you would do would make like better for a few while making life worse for people in general.

In any case, I thought the left was all hot about 'jon sharing' and 'reduced work weeks' to keep people employed.

I think axing the ridiculous salaries of too many management pigs at the trough and forcing corporations to provide Canadian workers with full time jobs and wages that match if they wish to sell their goods in this country is what is needed.

Kissing the corporate ass doesn't lead to more jobs. We've already seen that.

[TimG]

I think axing the ridiculous salaries of too many management pigs at the trough and forcing corporations to provide Canadian workers with full time jobs and wages that match if they wish to sell their goods in this country is what is needed.

You are completely clueless then. You have no idea how business works.

[Wild Bill]

So your answer is, to permit U.S. Steel to extort concessions on pensions despite the legal commitments it made to the Government of Ontario when it promised to maintain the current pension regime until 2015.

U.S. Steel also closed down production which is in direct violation of commitments it made under the Investment Canada Act.

I find it curious how you fail to mention that small detail...

You completely evaded my point! I was NOT defending U S Steel in its present dispute with Local 1005! I was merely using Local 1005 as an example of unions not seeing the big picture, or not caring. Watch that situation closely, Rick. Comrade Rolf is going to get U S Steel to close that plant. When it happens, he will lay ALL the blame on the company!

Afterwards it will get very interesting. Sooner or later he is going to have to face a vote from his membership, if not on the contract then about his own leadership. Steelworkers have long memories.

The federal government is suing U S Steel for breach of its agreement. Personally, I hope they hang them!

So what? How does that change my point that unions today are living in the past?

The fact that you so completely missed my point to pounce on my model is EXACTLY what's wrong with much of union thinking today! Because the union leadership doesn't have to worry about the company's day to day struggle to be profitable they seem to believe that NO ONE has to worry about it! That it is written in the stars that the company will always be there to employ their membership!

I've worked for two companies that went bankrupt. Both times the writing was on the wall for months, if not years. Yet when the axe came down fellow workers all around me were totally shocked! They just couldn't believe it! Sadly but also laughably, at one firm some tried to organize some kind of effort to FORCE the company to stay in business, despite it's being broke and in debt!

Most of my career was in sales and one thing you learn early is that in any deal or partnership it has to be good for both parties if its going to last. If a deal is so much in your favour that it breaks your opponent then you both lose.

[Rick]

You are completely clueless then. You have no idea how business works.

Oh I know full well how business works.

Need some examples?

CEO's screw the workers while padding their own fat corporate asses

A CEO sees his salary as a measure of his worth, and views his employees as relatively worthless

[Rick]

You completely evaded my point! I was NOT defending U S Steel in its present dispute with Local 1005! I was merely using Local 1005 as an example of unions not seeing the big picture, or not caring. Watch that situation closely, Rick. Comrade Rolf is going to get U S Steel to close that plant. When it happens, he will lay ALL the blame on the company!

Afterwards it will get very interesting. Sooner or later he is going to have to face a vote from his membership, if not on the contract then about his own leadership. Steelworkers have long memories.

The federal government is suing U S Steel for breach of its agreement. Personally, I hope they hang them!

So what? How does that change my point that unions today are living in the past?

The fact that you so completely missed my point to pounce on my model is EXACTLY what's wrong with much of union thinking today! Because the union leadership doesn't have to worry about the company's day to day struggle to be profitable they seem to believe that NO ONE has to worry about it! That it is written in the stars that the company will always be there to employ their membership!

I've worked for two companies that went bankrupt. Both times the writing was on the wall for months, if not years. Yet when the axe came down fellow workers all around me were totally shocked! They just couldn't believe it! Sadly but also laughably, at one firm some tried to organize some kind of effort to FORCE the company to stay in business, despite it's being broke and in debt!

Most of my career was in sales and one thing you learn early is that in any deal or partnership it has to be good for both parties if its going to last. If a deal is so much in your favour that it breaks your opponent then you both lose.

Comrade Rolf eh...

You're not the least bit anti-union now are you.

Save your right wing anti-union propoganda. Your ignorance and apparent love of slavery through your profound defence of U.S. Steel's screwing workers over says it all. Your denial is about as deep as Tony Clement saying he never did anything wrong with the G8 slush fund..

[Wild Bill]

Comrade Rolf eh...

You're not the least bit anti-union now are you.

Save your right wing anti-union propoganda. Your ignorance and apparent love of slavery through your profound defence of U.S. Steel's screwing workers over says it all. Your denial is about as deep as Tony Clement saying he never did anything wrong with the G8 slush fund..

Once again, nice evasion! You never addressed a single point I made!

Did I vote for you once? Your way of doing things seems familiar...