Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[alwaysfishn]

Suggesting that students are paying for corporate tax breaks is not a fact. Pure logic suggests that a corporate tax break is a discount or a credit, not a payment of cash. Therefore it would be impossible for students to be paying for corporate tax breaks!  

-- It is not directly related just a comparison  to put into prospective that students pay about the same for tuition in BC  as the Corporation's pay  in tax.  It is difficult for me to visualize what a Billion dollars means in terms of value. HST was much applauded by the forest industry as a direct reduction in their total tax burden.
--I'm not quite left wing enough to want all corporations taxed to death or nationalized (maybe some).. I liked the idea of the Canadian government owning Petro Can and its refineries.. It gave us something to squawk about... and also gave some perspective into the industry.
--I'm also very impressed that big business can be so united in their cause and slogan of lower taxes and less government. In public they insist on an even playing field yet behind closed doors each seeks a break for themselves only and a monopoly rather than competition. My perspective is that if they were united in purpose there would only be a need to register ONE lobbyist to speak on behalf for all corporations. I am quite sure there is more than one registered lobbyist and even a few as we have learned recently that are not registered.  

That comparison doesn't put anything into perspective!  It's like saying Jimmy Pattison spends as much to maintain his Yacht each month as 100 families spend on groceries.....  it's totally unrelated and irrelevant.

The problem with those kinds of statements is the naive take a statement like that and believe that we should lower tuition and increase the taxes on corporations.They have no idea of economics.

As far as Corporations lobbying, why shouldn't they. If as a result of their lobbying they are able to increase their profits then the investors will continue to buy the corporations shares. That may not seem relevant to you, however for those folks that either own shares, have RRSP's or participate in a pension plan and will someday collect from the Canada Pension Plan then it is very relevant. In other words the success of our corporations is relevant to 99% of Canada's population!

As far a the government owning Petro Canada or for that matter any corporation, it has been proven time and time again that politics/government and business are a terrible combination. The politicians end up appointing their buddies to management positions with little regard for their ability to manage. It's true that the government earns the profits however the profits are usually  less that the profits that a comparable private corporation can earn. Governments should be managing services for citizens and setting policy, not running something that private enterprise is more capable of doing.

[Novabonker]

That comparison doesn't put anything into perspective!  It's like saying Jimmy Pattison spends as much to maintain his Yacht each month as 100 families spend on groceries.....  it's totally unrelated and irrelevant.

Yeah we need to give ol' Jimmy some more tax breaks so he get a bigger yacht.

The problem with those kinds of statements is the naive take a statement like that and believe that we should lower tuition and increase the taxes on corporations.They have no idea of economics.

Keeping the electorate cloaked in ignorance and making education available only to the wealthy is really good economic policy.

As far as Corporations lobbying, why shouldn't they. If as a result of their lobbying they are able to increase their profits then the investors will continue to buy the corporations shares. That may not seem relevant to you, however for those folks that either own shares, have RRSP's or participate in a pension plan and will someday collect from the Canada Pension Plan then it is very relevant. In other words the success of our corporations is relevant to 99% of Canada's population!

You get the best government money can buy! One need not look any further than Campbell's sell out of oh, just a couple of examples- BC Rail (to his bestest buddy and fund raiser), Ruin of the river, etc.

As far a the government owning Petro Canada or for that matter any corporation, it has been proven time and time again that politics/government and business are a terrible combination. The politicians end up appointing their buddies to management positions with little regard for their ability to manage. It's true that the government earns the profits however the profits are usually  less that the profits that a comparable private corporation can earn. Governments should be managing services for citizens and setting policy, not running something that private enterprise is more capable of doing.

I THINK WE SHOULD HAVE NO CORPORATE TAXES _ IT'S NOT LIKE THEY DON'T USE INFRASTRUCTURE OR ANYTHING LIKE THAT! Let's all chip in to pave the streets with gold to all corporate head offices!!!
(That's what the HST is doing, like it or not- )

Oh my - We already have one of the lowest corporate tax rates in North America, but that still isn't enough. Greed and the greedy need more!

DISMISSED!

[BwiBwi]

http://en.wikipedia.org/wiki/Tax_rates_around_the_world

Tax rates around the world in a quick glance.

[salmonsturgeontrout]

Great link but based on levels in 2005, things have changed greatly in Canada since then. Corporate taxes aren't even close to those rates now. Here's a link for current rates : http://www.canadabusinesstax.com/corporate-income-tax-rates/  

Canada's corporate taxes are one of the lowest in the world currently

[alwaysfishn]

Great link but based on levels in 2005, things have changed greatly in Canada since then. Corporate taxes aren't even close to those rates now. Here's a link for current rates : http://www.canadabusinesstax.com/corporate-income-tax-rates/ 

Canada's corporate taxes are one of the lowest in the world currently

Corporate tax rates have a Federal and a Provincial component (just like personal tax rates). You need to add the 2 together to come up with the Canadian tax rates. You will likely have a different opinion on the statements you've made. 

It's also important to compare our tax rates with countries that are comparably attractive for corporations to move their businesses to. Comparing Canada's tax rate to Cameroon or Burundi is a pointless exercise.

Their are many other components that need to be considered such as materials and labor rates compared to other countries. When companies look at where to build their products they compare all the costs that go into running their business. If the costs to manufacture a product In Canada are higher than in another country, guess where the business will move. In Canada we have much higher labor costs than many other countries, so to be able to compete Canadian business's need to pay lower corporate taxes.

[StillAqua]

Their are many other components that need to be considered such as materials and labor rates compared to other countries. When companies look at where to build their products they compare all the costs that go into running their business. If the costs to manufacture a product In Canada are higher than in another country, guess where the business will move. In Canada we have much higher labor costs than many other countries, so to be able to compete Canadian business's need to pay lower corporate taxes.

Companies locate their businesses , not where corporate taxes are slightly lower, but where their costs are lowest (labour, materials), where their suppliers are, and where their customers are because those are the factors that determine their profitability. If they aren't profitable, they don't pay corporate tax because corporate taxes are paid on profits (revenues minus expenditures). Corporate tax rates only play a role is in the distribution of profits. Profits are divided into government taxes, retained earnings (invested back into the company) and dividends to shareholders (if there are any). So cutting corporate taxes may increase the amount available for retained earnings and stock dividends but it also cuts our shared tax revenue effectively providing a taxpayer subsidy to the profits of corporations. Personally, I'm against taxpayers subsidizing businesses that aren't profitable to supposedly "create jobs", particularly multi-nationals that export many of their jobs and revenues outside Canada.

[alwaysfishn]

Companies locate their businesses , not where corporate taxes are slightly lower, but where their costs are lowest (labour, materials), where their suppliers are, and where their customers are because those are the factors that determine their profitability. If they aren't profitable, they don't pay corporate tax because corporate taxes are paid on profits (revenues minus expenditures).

You forgot to add.......  "If corporations are not profitable, they cease to exist, shareholders lose their investment and employees lose their jobs".

Corporate tax rates only play a role is in the distribution of profits. Profits are divided into government taxes, retained earnings (invested back into the company) and dividends to shareholders (if there are any). So cutting corporate taxes may increase the amount available for retained earnings and stock dividends but it also cuts our shared tax revenue effectively providing a taxpayer subsidy to the profits of corporations.

You're sounding like you have studied the NDP manual very well! They propose taxing the corporations because they are an easy target. When the businesses close their doors or move out of the country, the employees will blame the "greedy" corporation and not the government who increased corporate taxes.   

Distribution of profits is the reason that businesses exist! If shareholders (and every company has at least one) do not receive a return on their investment they will not invest in the business! If no one invests in a business, the business ceases to exist! My retirement pension is a shareholder in these corporations, as is 99% of Canadian's pensions.

Corporate taxes and job losses are very closely related. Look south of the border and you'll see 3 things; high unemployment, high corporate taxes and over 3 trillion American corporate dollars that are invested outside of the US.

Personally, I'm against taxpayers subsidizing businesses that aren't profitable to supposedly "create jobs", particularly multi-nationals that export many of their jobs and revenues outside Canada.

I'm against subsidizing businesses as well. I hate the fact Chrysler and GM got big bale outs. On the positive side a lot of people continued to get a pay cheque as a result. If lower corporate taxes make this country a more attractive place to invest, then the government will generate more tax revenues as a result of the newly created jobs. As an investor that will make me happy as well. 

[StillAqua]

Lots of companies pay no corporate taxes AF, particularly new, growing companies that are the major source of new, well paying jobs. They make little to no profit because revenues are reinvested into debt servicing as they develop (or in many cases, fail because of poor business strategies). So changes in corporate tax rates have no effect on them. Contrary to what you claim, there is no cause and effect between job losses and corporate tax rates. Canada cut her corporate tax rate in half from the 1980's yet we lost many of our manufacturing jobs because of competitive labour markets (as did the US). It's all about international macroeconomics. We can't compete with the low standards of living in China, India, Mexico, etc. although sometimes I think some wealthy business leaders wish that.

You're far too quick throwing out your "socialist slur" AF. All the parties have serious flaws in their economic policies. NDP also wants to cut taxes on 90% of Canadian businesses (small) which is as silly as the Tory claim that corporate tax cuts = jobs. Canada's economy is still largely resource based (forestry, oil, mining, grain) and driven by international commodity prices (not corporate taxes) which we can't control.

Canada has one of the best taxation and corporate investment climates in the developed world (particularly for private Canadian companies) and we just proved it in the recession but if you add up taxes at all levels of government, our effective corporate tax rate is actually not much better than other countries. What Canada could do better, like other countries, is improving our business investment tax credits, which provide a carrot for companies to reinvest their retained earnings in company growth in Canada (R&D, modernization and Green technology, securing new export markets, etc.) rather than dividend payouts or socking it away in Treasury Bills. Think "film industry" in Toronto and Vancouver. Most of the political parties though don't talk about tax credits except for special interest groups.

But AF, I can see how if you're a pensioner surviving on stock dividend income from companies like Walmart or the Bank of whatever, corporate reinvestment rather than dividend payouts isn't in your best personal interests.

[alwaysfishn]

Lots of companies pay no corporate taxes AF, particularly new, growing companies that are the major source of new, well paying jobs. They make little to no profit because revenues are reinvested into debt servicing as they develop (or in many cases, fail because of poor business strategies). So changes in corporate tax rates have no effect on them. Contrary to what you claim, there is no cause and effect between job losses and corporate tax rates. Canada cut her corporate tax rate in half from the 1980's yet we lost many of our manufacturing jobs because of competitive labour markets (as did the US). It's all about international macroeconomics. We can't compete with the low standards of living in China, India, Mexico, etc. although sometimes I think some wealthy business leaders wish that.

Just a small clarification: Revenues cannot be directly reinvested in debt servicing. Debt servicing is the result of a profitable company paying corporate taxes and using the residual to pay down it's debts. Startups do not pay taxes initially, but they were started with the intention of being profitable and having to pay taxes. Companies that do not pay taxes are not making profits and will not likely be around for a long time. All profitable (successful) companies, pay corporate taxes. Raising corporate taxes will give these corporations one more reason to move their plants out of Canada. 

If your statement "there is no cause and effect between job losses and corporate tax rates." were true then why does virtually every country in the world have corporate tax rates around 30%? Why wouldn't they set them at 60% and tax their citizens less?

You're far too quick throwing out your "socialist slur" AF. All the parties have serious flaws in their economic policies. NDP also wants to cut taxes on 90% of Canadian businesses (small) which is as silly as the Tory claim that corporate tax cuts = jobs. Canada's economy is still largely resource based (forestry, oil, mining, grain) and driven by international commodity prices (not corporate taxes) which we can't control.

Canada has one of the best taxation and corporate investment climates in the developed world (particularly for private Canadian companies) and we just proved it in the recession but if you add up taxes at all levels of government, our effective corporate tax rate is actually not much better than other countries.

I wasn't aware my statement was a socialist slur.....     I've lived through too many left wing type governments whose focus was primarily on providing social benefits with little regard for where the money to fund them was going to come from. You cannot afford a great social system without having a booming industrial sector. Relying only on our resources to provide future jobs is also very short sighted. I want my great grand children to have a place to work when we run out of the non-renewable resources.  With the evolving global markets governments need to make it very attractive for businesses to invest in Canada because it is much easier to move that business today than it was 50 years ago.

 What Canada could do better, like other countries, is improving our business investment tax credits, which provide a carrot for companies to reinvest their retained earnings in company growth in Canada (R&D, modernization and Green technology, securing new export markets, etc.) rather than dividend payouts or socking it away in Treasury Bills. Think "film industry" in Toronto and Vancouver. Most of the political parties though don't talk about tax credits except for special interest groups.

It is important to improve all aspects of our taxation system in order to attract and maintain jobs in Canada. Whether you provide a corporate tax cut or a business investment tax credit, they are all lower tax incentives to make it attractive for businesses to invest in Canada. Another clarification: Retained earnings are the residual profits a company has after it has paid it's corporate taxes. Because higher corporate tax rates have an impact on retained earnings, this leaves the corporation with fewer dollars to invest in the growth of it's business.

The reason corporations pay out dividends is that investors need to have a return on their investments in these businesses. If the corporation doesn't provide that return the investors will find somewhere else to invest their money. The end result is the business will die.

But AF, I can see how if you're a pensioner surviving on stock dividend income from companies like Walmart or the Bank of whatever, corporate reinvestment rather than dividend payouts isn't in your best personal interests.

Disclosure.....   I am not retired. I'm a Certified Financial Planner (CFP) and work with a variety of clients in all stages of life. Most of them have a focus on saving for their retirement.

I am not against corporate reinvestment as that adds value to the balance sheet, which increases the stock price, however unless the investor is receiving a return on their investment (ie. dividend) they will look for other places to invest their money. The Canada Pension Plan (CPP) which provides retirement income to 99% of Canadian retirees, invests in a variety of companies. The CPP looks for companies that pay dividends.

[speycaster]

Private companies sure knew how to manage finances on Wall street, then come wailing and moaning to the taxpayer for help. No government run corporation in BC was ever as poorly managed as those that wanted to be saved on Wall street. Funny  my financial  planner was still touting investments that I was really leery of just before the collapse in the USA.   Funny that he with all his expertise did not fore see what was coming. How many corporations have gone down the tube? I can name a whole bunch that took a lot of peoples money with them.

[troutbreath]

My financial planner got dot commed. I think he went back to the Financial Planning Academy for a retrofit.

[alwaysfishn]

Private companies sure knew how to manage finances on Wall street, then come wailing and moaning to the taxpayer for help. No government run corporation in BC was ever as poorly managed as those that wanted to be saved on Wall street. Funny  my financial  planner was still touting investments that I was really leery of just before the collapse in the USA.  Funny that he with all his expertise did not fore see what was coming. How many corporations have gone down the tube? I can name a whole bunch that took a lot of peoples money with them.

It was mostly public companies, not private companies that mismanaged their businesses. Unfortunately a lot of people lost money in that fiasco. One of the advantages of investing in mutual funds managed by large well established investment companies is that they will not expose the investor to risks like that. Investors that lose money in situations like that usually have advisers that expose them to greater risks because they are trying to achieve unrealistic returns on their investments.

[bluesteele]

Disclosure.....   I am not retired. I'm a Certified Financial Planner (CFP) and work with a variety of clients in all stages of life. Most of them have a focus on saving for their retirement.

Is that another fancy word for a whole life insurance salesman ?   

[StillAqua]

Just a small clarification: Revenues cannot be directly reinvested in debt servicing. Debt servicing is the result of a profitable company paying corporate taxes and using the residual to pay down it's debts.

I'm talking about start-ups and their start-up business costs, which can't all be written off as business expenditures...nothing to do with taxes AF.

If your statement "there is no cause and effect between job losses and corporate tax rates." were true then why does virtually every country in the world have corporate tax rates around 30%? Why wouldn't they set them at 60% and tax their citizens less?

Instead, try reading "The cost of a zero corporate tax rate" by a CCPA Senior Economist.
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/the-economists/the-cost-of-a-zero-corporate-tax-rate/article1989662/

Relying only on our resources to provide future jobs is also very short sighted. I want my great grand children to have a place to work when we run out of the non-renewable resources. 

I agree with the desire for a diversified economy but what other sectors could step up to the plate? Manufacturing? Financial? Tourism? Salmon farming? IPPs? Nuclear power? Not likely...and that's the rub.

Another clarification: Retained earnings are the residual profits a company has after it has paid it's corporate taxes. Because higher corporate tax rates have an impact on retained earnings, this leaves the corporation with fewer dollars to invest in the growth of it's business.

Cutting federal corporate taxes by a few additional percent will have little impact on a company's bottom line (it's within their annual operating variance)...but it has a large cumulative impact on the total revenues taxpayers receive.

[alwaysfishn]

 Instead, try reading "The cost of a zero corporate tax rate" by a CCPA Senior Economist.
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/the-economists/the-cost-of-a-zero-corporate-tax-rate/article1989662/

I've never said there should be zero corporate tax.  

However on that point I strongly believe that any form of income tax/corporate tax is a disincentive to an entrepreneurial system. People and corporations find loopholes to limit the taxes they pay and even go to extremes of tax avoidance. Income tax penalizes the people and companies that work hard and take risks in order to grow their wealth.

That's why I believe the HST is a good tax. A consumption tax like the HST is paid by everyone that spends their money, more is paid by the rich than is paid by the poor.

I agree with the desire for a diversified economy but what other sectors could step up to the plate? Manufacturing? Financial? Tourism? Salmon farming? IPPs? Nuclear power? Not likely...and that's the rub.

The point is unless we find a way to attract these businesses we are on a slippery slope relying only on our resources.

 Cutting federal corporate taxes by a few additional percent will have little impact on a company's bottom line (it's within their annual operating variance)...but it has a large cumulative impact on the total revenues taxpayers receive.

That statement is just typical left wing rhetoric. You need to study some economics and less NDP propaganda....  
Cutting corporate taxes by 1% means an extra 1% return for the shareholders. Shareholders pay taxes on their investment returns and they also spend money, which generates tax revenue. In the process the company has happy investors, is able to raise more capital which it invests inside Canada thereby creating more jobs ......  which generate taxes.