Quote:
Originally Posted by the_only_turek_fan
O'Leary is just the messenger.
Increasing corporate taxes by 20% at a time when oil companies do not have enough cash flow to fund new projects is so beyond dumb. it defies common sense.
The drop in oil prices is not Notley's fault. But her idiotic ideas are not helping anyone right now and is making the situation way worst.
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As the individual in my firm who does all of the project valuation modelling I thought I'd take a look at some of our historical approved projects to see how much of an impact the tax change makes...
10% Tax Rate: IRR 14.2%; PVAT7% $2,427.4MM
12% Tax rate: IRR 13.9%; PVAT7% $2,378.2MM
So a while a 20% tax increase sounds like a big bogeyman, it only impacted our PV by 2% (What a surprise ;-). A change that small is unlikely to affect project approval for all but the most marginal of projects (which likely wouldn't have flown anyways).
Those who are trying to blame the NDP for the lack of corporate investment in the current economic climate are barking up the wrong tree and are displaying their lack of real-world experience in these matters.