Kansas Tax Cut Hasn't Created “tens of thousands of jobs.”

[Tonington]

Yup but doing business in low or no tax regimes leads to other potential problems .
Such as is my shop going to be blown up ?
Are my goods going to be confiscated ?
Can I get my product to market ?

Yes, you're getting my point. There are far more things to consider than just the tax rate...

 

[pgs]

Yes, you're getting my point. There are far more things to consider than just the tax rate...

No kidding Sherlock .

 

[Tonington]

No kidding Sherlock .

OK, my reply that you quoted was to someone else who asked a question. If you got it then you're just repeating my own point back to me, and your questions were what, rhetorical? Not sure what your point is Polly.

 

[petros]

The biggest expense any company has is labour. A labour tax credit would have went further than a drop in the flat rate.

 

[pgs]

OK, my reply that you quoted was to someone else who asked a question. If you got it then you're just repeating my own point back to me, and your questions were what, rhetorical? Not sure what your point is Polly.

I want a cracker .

 

[petros]

I've been called a cracker.

 

[PoliticalNick]

There are fiscal and qualitative reasons, because taxes aren't the only expense on the ledger and there are other factors to consider. Sometimes it's because the cost of transporting goods gets too expensive. Other times it could have something to do with quality manufacturing or skilled labour pools. On the quality aspect, a recent survey of Canadian manufacturing firms found that businesses here will be looking less to China and India when sourcing inputs for their businesses.

I mean if you take your question to the extreme, if they only cared about tax rates, then countries like Iraq would be a great destination, their 15% rate is favourable compared to Canada's 26.5%. For obvious reasons Iraq isn't a great place to move your business.

If the government would let me keep more of my earnings, I won't be increasing my spending. I will be paying off debt more quickly, and putting more in my savings. Not really big economic multipliers. Considering the fiscal troubles of the past half decade+, I wouldn't be surprised if others were more careful with any extra money they take home.

Actually Tonn it is proven that savings create far more economic growth than spending. When you save your money the banks can then lend it or use it for investment capital. It does not produce e direct profit which is what most people seem to concentrate on but it does create economic stimulus allowing for new business to open and be viable.

 

[Tonington]

Actually Tonn it is proven that savings create far more economic growth than spending. When you save your money the banks can then lend it or use it for investment capital. It does not produce e direct profit which is what most people seem to concentrate on but it does create economic stimulus allowing for new business to open and be viable.

Hmm, well it's only about 1/8 of my savings that are in a bank. But really, to use the example in this thread, let's say my province, PEI, lowered the tax rates. Of the fraction of new take home income I receive, the savings are going into a variety of different funds managed by my financial planners, and into a savings account from a national bank that isn't technically even in the province I reside in. How much of that is actually going to spur economic development in PEI? I don't know, but I would guess it's peanuts compared to if I did actually spend it all at local businesses.

Also, I would imagine bank leveraged growth from my savings account would happen on longer time scales than spending money at a furniture store, or buying a boat from the local marine shop. Capital expenditures in the company I work for take a hell of a lot longer to approve than a purchase order.

I'd think for long term growth what you're saying is pretty important. Any link to a proof you're mentioning? I'd love to read some more about this. I'd like to see the correlation between consumer savings rates and bank financing rates.

ETA: Passing thought. Hasn't there also been a weak demand for credit in the last few years? I remember stories of companies sitting on all kinds of cash. Hmm, food for thought.

 

[petros]

How much of that is actually going to spur economic development in PEI?

Peanuts but it helps. Your contributing to GDP which attracts investment from national and foreign banks and investment houses. Is there a PEI pension plan or flow throughs so you can invest locally?

SPP did 15.77% last year with 8.33% over the 5 year average. The flow throughs that have matured in my portfolio have been incredible. It's hard to find numbers that good these days