Corporate tax cuts are not working

[Walter]

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

Right now they are below where they should be.

There should be no corporate tax because any expenses corporations have are passed on to the consumer. No corporate tax means lower prices for the consumer. Lower consumer prices means the consumer has more $ to buy more things and that means the govmint gets more revenue through consumption taxes.

 

[Machjo]

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

That's too general a statement. It would be like saying exercise is healthy, but that does not mean working out 24/7 is healthy.

On the one hand, reducing taxes stimulates the economy just as printing money and increasing government spending and lowering interest rates stimulate an economy.

At the same time though to overdo it would lead to inflation or even hyperinflation. Add to that that lowering taxes and borrowing and spending does indeed stimulate an economy for the short term but it is unsustainable.

So, does increasing taxes slow down the economy? Yes it does.

But debt leads to an even worse predicament later on. So from that standpoint, it would be preferable to maintain higher taxes until the debt is paid off while reducing spending (tax and axe) and then slowly and gradually reduce taxes once the debt is paid off so as to ensure a more stable tax reduction.

 

[mentalfloss]

There should be no corporate tax because any expenses corporations have are passed on to the consumer.

So what?

How do expenses to the consumer invalidate a corporate tax?

 

[Machjo]

There should be no corporate tax

All else being equal, I agree, but not as a tax reduction in the midst of federal debt. Do so once the debt is paid.

because any expenses corporations have are passed on to the consumer.

Or the worker by way of lower wages, or both. I agree with that. But so do most taxes anyway, so while I oppose corporate taxes in principle, this is not the reason i oppose it since the reason you give is not unique to corporate taxes anyway.

No corporate tax means lower prices for the consumer.

But higher interest rates as the government must borrow more to pay off the interest on its debt. Nice trade-off. Just like sleep and exercise and food, a balance must be met between debt, taxes, etc.

Lower consumer prices means the consumer has more $ to buy more things and that means the govmint gets more revenue through consumption taxes.

Oh wait, consumption taxes? So you're still promoting taxes, and a consumption tax reduces purchasing power all the same. Back to square one.

Now if you were talking about shifting corporate taxes to resource taxes, maybe I could agree to it, but the debt has to be paid.

 

[Walter]

Oh wait, consumption taxes? So you're still promoting taxes, and a consumption tax reduces purchasing power all the same. Back to square one.

Check my posts; I've always advocated that the only tax should be a consumption tax.

 

[WLDB]

There should be no corporate tax because any expenses corporations have are passed on to the consumer.

If thats the case then what makes you think they'll lower the prices if corporate taxes are eliminated? They can just keep it the same and get more profit. No matter what we do they won't lower their prices.

 

[Machjo]

Check my posts; I've always advocated that the only tax should be a consumption tax.

Fair enough. I'd say even more fair in most cases would simply be for the government to sell crown resources at a higher price. That way we choose whether to buy or not.

If thats the case then what makes you think they'll lower the prices if corporate taxes are eliminated? They can just keep it the same and get more profit. No matter what we do they won't lower their prices.

Not necesarily.

But to ensure more fairness in the workplace, German-style codetermination legislation could help workers ensure a fair distribution of profits, bearing in mind that this does not necessarily guarantee salary increases and sometimes merely means ensuring everyone accept equal pay cuts to the workers, but even that is still fair.

I can't remember if it's Saudi Arabia or another country, but I remember one country that has no taxes and instead relies exclusively on the sale of crown resources. That would not be a bad idea either. It would mean that the cost of resources would rise considerably and that that cost would be passed down to manufacturers, but it woudl still be fairer than any tax probably.

Though I would not oppose a moderate flat 100% 1:1 charity-deductible income tax for education for example to ensure all make a contribution for our children's education, thus allowing those who do not wish to pay that tax to give that money to a public school of their choice or charity of their choice.

But the rest should come from the sale of crown resources.

 

[Walter]

If thats the case then what makes you think they'll lower the prices if corporate taxes are eliminated? They can just keep it the same and get more profit. No matter what we do they won't lower their prices.

Competition is a wonderful thing; it reduces prices, improves product and inspires innovation.

 

[mentalfloss]

More evidence that corporate tax cuts are not increasing competition or the economy as Caterpillar decides to close a Canadian plant in favour of production in the U.S.

Oh, and that also just killed 450 jobs.

And all those tax breaks they got from us are now wasted.

Thank you Harper.

Canadian Taxpayers Left Holding the Bag in London Plant Shutdown
Georgetti says Caterpillar should be forced to seek Canadian buyer

The President of the Canadian Labour Congress says the federal government should force Caterpillar Inc. to put its London, Ontario diesel assembly plant up for sale to a Canadian buyer to keep jobs in this country.

Georgetti was commenting on an announcement by the U.S.-based Caterpillar that it will close its Electro-Motive Canada plant rather than negotiate a new contract with 450 workers who the company locked out on January 1st. "This is corporate thuggery and Caterpillar should not be allowed to get away with it," Georgetti says.

In 2010, the federal government approved Caterpillar's purchase of Electro-Motive through its wholly-owned subsidiary Progress Rail Services. The approval came under the Investment Canada Act. "The Investment Canada Act says these sales must be of net benefit to Canada," Georgetti says. "It is of no benefit when Caterpillar buys a plant only to close it down."

Caterpillar recently reported record revenues but the company demanded concessions from its London workers that would have seen their wages reduced by up to 50 per cent. The workers were locked out and now the company has announced that it will close the plant.

In 2008 Electro-Motive benefited from tax measures from the Harper government estimated to be worth $5 million. "Once again Canadian workers and taxpayers are left holding the bag," Georgetti says. "This is a ripoff and Ottawa should demand its money back."


Canadian Taxpayers Left Holding the Bag in London Plant Shutdown - MarketWatch

 

[captain morgan]

More evidence that corporate tax cuts are not increasing competition or the economy as Caterpillar decides to close a Canadian plant in favour of production in the U.S.
http://www.marketwatch.com/story/ca...g-the-bag-in-london-plant-shutdown-2012-02-03

Dude, you're on glue... Those jobs are heading South because the cost of labor at their US plant just over the border is 50% less. Fact is, the unionized workers in the Canadian plant have priced themselves out of the market.

So, with this in mind, how is this circumstance Harper's fault?

 

[CDNBear]

Fact is, the unionized workers in the Canadian plant have priced themselves out of the market.

But they're entitled to their collectively bargained entitlements.

 

[L Gilbert]

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

Yup. Gov't lives beyond its means.

 

[darkbeaver]

I think the market for industrial equipment is flat.

 

[captain morgan]

But they're entitled to their collectively bargained entitlements.

Very true, but the fly in the ointment is that if the plant closes, those benefits are about as valuable as the paper they are written on.

 

[L Gilbert]

I think the market for industrial equipment is flat.

Quit thinking then, because it's of no use to you.
Industrial equipment wears out. Populations keep growing, which results in more equipment to build things to keep them happy.

 

[CDNBear]

Very true, but the fly in the ointment is that if the plant closes, those benefits are about as valuable as the paper they are written on.

I like poking the union guys in the eye, but to be honest, I have a problem when last month Cat posted a profit increase of 83%, to a record $4.9 Billion. I don't know what their Electro-Motive division pulled in. Which could be why it hasn't been reported. It doesn't suit the media hype, to expose the fact that perhaps Electro-Motive Canada, isn't very profitable, or efficient in today's market.

 

[Ron in Regina]

I think the market for industrial equipment is flat.

We (the small company I'm with) will have purchased another $400,000 Loader
(we bought one a few months ago too, to go along with the others) in the next
month.

I spent all of January modifing an $800,000 machine, and anything we're not
using can be sold in a heartbeat to Mexican or South American buyers....

 

[captain morgan]

I like poking the union guys in the eye, but to be honest, I have a problem when last moth Cat posted a profit increase of 83%, to a record $4.9 Billion. I don't know what their Electro-Motive division pulled in. Which could be why it hasn't been reported. It doesn't suit the media hype, to expose the fact that perhaps Electro-Motive Canada, isn't very profitable, or efficient in today's market.

I don't disagree with you relative to the optics as they apply to the profitability of the company, Caterpillar will have egg on their face for that. On that note, considering Obama's recent SOTU speech, his focus on manufacturing, the notion that Caterpillar is US-based and the stark difference in the cost of the labor in the Canadian plant - well, they are in one helluva tough position.

 

[Liberalman]

The government should consider consumer tax cuts so they can spend more to support local business.

 

[taxslave]

Dude, you're on glue... Those jobs are heading South because the cost of labor at their US plant just over the border is 50% less. Fact is, the unionized workers in the Canadian plant have priced themselves out of the market.

So, with this in mind, how is this circumstance Harper's fault?

Harper never banned unions. If he had these workers would still have jobs.
This is one of the three reasons so many sawmills closed in BC. We managed to kill the goose that laid the golden egg. Catalyst Paper is now in the same position and may very well declare bankruptcy because one union in one of the three mills would not agree to concessions required for a refinancing plan. We are not talking huge cuts either and many of these mill workers make over $80 a year.

The government should consider consumer tax cuts so they can spend more to support local business.

All levels of government should consider massive spending cuts so working people could keep more of their paycheques.