Quote:
Originally Posted by octothorp
I'm reluctant about the idea of a cap and trade system, but at the same time, I've been reading a lot in the last couple days about how companies are not reinvesting the money saved in their Harper tax cuts but instead building massive cash reserve stockpiles (something like $80 billion since 2008 (mostly under a rate that matches the 18% the Liberals propose), according to stats can).
To me, it seems that artificially forcing an investment in green technologies isn't an ideal way of creating jobs, but it is preferable to having corporations stockpile cash, which does nothing to stimulate the economy. I'd rather that businesses actually reinvest money in new jobs, equipment, etc. of their own accord, but if they're unwilling to do that, the government needs to find ways of incentivizing businesses to reinvest those savings into the economy.
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Corporations stockpiling cash has nothing to do with taxes and has more to do with being cautious in uncertain times. The economy is just starting to firm up in Canada and the US. Corporations will start to deploy capital and make more investments as they feel more comfortable doing so and that has more to do with the World and Canadian economy than it has to do with Stephan Harper or Micheal Ignatieff.
Raising tax rates to 18% doesn't provide more incentive to invest that cash. An arguement could be made that 18% is still a competative number, but that's where the academic debate begins. No one is arguing that a tax rate of 15% vs. 18% means less investment, but rather the effeiciency of the increased investment vs. other policies. That's where the debate lies and if this is an important policy to weigh in how you'll vote in the election try to research economists positions on this and also think about the benefit of an additional $442 per post secondary student will mean for you personally and for the country. That's the policy contrast between the two parties.