Corporate tax cuts are not working

[captain morgan]

Dropping corporate taxes generally has less effect the further down the effects trickle.
Like I said, gov't should just find a set of rates for taxes and then leave them alone.

It's a fickle relationship.

The market and private sector will (can) withstand cost increases when the economy is strong and money is transacting through the system. That said, there is also a point when the econ conditions are marginal wherein a tax increase will act as a discouraging factor and inhibit growth or add pressure to down-sizing.

A great example is what Stelmach did (or threatened to do) to Alberta's royalty structure for oil & gas. In effect, he stated that the royalties were poised to increase - industry responded by reducing their planned operations in Alberta and instead pursued oil/gas opportunities in BC and Sask.

The fallout for AB is that once the money and corporate resources are applied elsewhere, it stays for a period of time. A simple reversal of policy can not undo the lost investment, etc.

 

[damngrumpy]

Why is it the corporate leadership tells the world there is no free lunch while tax wise
they are eating one. There is a place for tax cuts in some cases but not when we are
facing serious problems left over the the cheap low cost era. Over the last few
decades we have had governments Federally and Provincially that didn't look after
the infrastructure we all share. Now repairs are coming due and there is no money to pay
the debt, the interest, the funding for current programs and much of the infrastructure
that has not been kept up.
On the other side of the coin when the Liberals were in they didn't update the changes
needed for the military and other issues and the present government had to update those
areas. The real problem is we all need to pay more to get out of the mess we are in at
present. There is a lot of things that need to be done and once source for the money.
Governments go about saying we won't mortgage our children's future. Yet at the same
time for short term political gain they all ignore the real cost of things and use the route
of cheaper taxes and tax cuts to get themselves re-elected. Wow use our money to make
them popular, and wow we follow believing every word even though last week most of
us called them a bunch of liars about other issues.

 

[Machjo]

"Corporate tax cuts are not working".
What? Trickle-down theory not working? Say it ain't so! (sarcasm)
Trickle down theory is also know as the horse and sparrow theory - if you feed the horse enough oats, some will end up on the road for the sparrows. IOW, the rich get richer and the poor only may be slightly better off.

If they do actually have an effect, it ain't much and are not spontaneous by a long shot. And tax cuts are also known by another term, corporate welfare.
Corporate tax cuts don't spur growth, analysis reveals as election pledges fly - The Globe and Mail

How does tax revenue translate to Joe Lunchbucket's job and pocketbook?

IMO, the stunned gov't should leave taxes alone and provide REAL incentives for small and medium sized businesses, which, BTW are the backbone of the economy.

Should you introduce German-style codetermination legislation though, suddenly workers get a vote on the board of directors and so can ensure a more equitable profit-sharing... bearing in mind that corporate taxes do cut into profits.

That said, I'm still opposed to tax cuts as long as we continue to have government debt. Once that's paid though...

 

[L Gilbert]

It's a fickle relationship.

The market and private sector will (can) withstand cost increases when the economy is strong and money is transacting through the system. That said, there is also a point when the econ conditions are marginal wherein a tax increase will act as a discouraging factor and inhibit growth or add pressure to down-sizing.

A great example is what Stelmach did (or threatened to do) to Alberta's royalty structure for oil & gas. In effect, he stated that the royalties were poised to increase - industry responded by reducing their planned operations in Alberta and instead pursued oil/gas opportunities in BC and Sask.

The fallout for AB is that once the money and corporate resources are applied elsewhere, it stays for a period of time. A simple reversal of policy can not undo the lost investment, etc.

There are exceptions, but like I said, as a general rule ....
At this point in time, I'd still suggest the gov't quit fiddling with taxes and can gov't waste if it wants money.

 

[petros]

What the Govt needs is enough excuses to buy two years of time until infrastructure projects start to pay and pay big in volume.

 

[L Gilbert]

What the Govt needs is enough excuses to buy two years of time until infrastructure projects start to pay and pay big in volume.

Gov't is an excuse.

 

[WLDB]

That said, I'm still opposed to tax cuts as long as we continue to have government debt. Once that's paid though...

I dont believe we've ever had 0 government debt. So I guess taxes are never going down.

 

[Machjo]

I dont believe we've ever had 0 government debt. So I guess taxes are never going down.

Then obviously taxes have always been too low and spending too high.

 

[darkbeaver]

Yall seem to think tax collection is a government thingy, that ceased to be the case long long ago. Take for instance the business called the Federal Reserve in yankee land, the power to create paper money is at one and the same time the power of taxation. The power of taxation went private while we slept. Governments today are the tax collectors for the wealthy, this is a time honoured tradition of stupid citizens.

 

[mentalfloss]

Then obviously taxes have always been too low and taxes too high.

Austerity alone can't pay off the debt. You need tax revenue.

 

[darkbeaver]

Austerity alone can't pay off the debt. You need tax revenue.

You are obcessing about the debt needlessly. The time honoured method of debt relief is to simply eliminate the debt holders. No need to service corruption and crime, unless you enjoy it.

 

[captain morgan]

You are obcessing about the debt needlessly. The time honoured method of debt relief is to simply eliminate the debt holders. No need to service corruption and crime, unless you enjoy it.

Corporate entities (and the obligations thereto) live on forever.

 

[Machjo]

Austerity alone can't pay off the debt. You need tax revenue.

Sorry, just corrected myself in my post. I meant:

Taxes too low and spending too high.

 

[mentalfloss]

Sorry, just corrected myself in my post. I meant:

Taxes too low and spending too high.

Right, and depending on the economy also won't cut it. It makes it worse for all of us if the economy is performing poorly despite low corporate tax rates.

 

[darkbeaver]

Corporate entities (and the obligations thereto) live on forever.

Christ another believer in corporate personhood! You do have to get the roots ya know.

 

[Walter]

Right, and depending on the economy also won't cut it. It makes it worse for all of us if the economy is performing poorly despite low corporate tax rates.

When has increasing taxes ever improved an economy?

 

[mentalfloss]

When has increasing taxes ever improved an economy?

Why do you assume it would make it worse?

 

[WLDB]

When has increasing taxes ever improved an economy?

World War II.

 

[Walter]

Why do you assume it would make it worse?

History tells us that increasing taxes reduces the amount of economic activity.

 

[mentalfloss]

History tells us that increasing taxes reduces the amount of economic activity.

Depends on how high - and we are referring specifically to corporate taxes of course.

Right now they are below where they should be.