Quote:
Originally Posted by Cowboy89
Alberta imports most of it's consumer goods from elsewhere. Net/ net considering that 100% of their salaries have to be raised from Alberta tax dollars or raised in the Debt capital markets with Alberta as debtor it will lead to massive leakages of those funds flowing out of Alberta to elsewhere.
The economy needs capital investment to get money flowing the other way from other jurisdictions. Which means that we need investment opportunities that are competitive for the marginal investment dollar. Making it more expensive to run a business in Alberta to employ teachers aides, or beef up Service Alberta run completely counter to that end. And before the Flash Walken's of the world start harping about how our taxes are much lower than 'Canadian standards' I would point out that:
A) the marginal investment dollar is global not just domestic
and
B) Other Canadian jurisdictions at the moment are awful at attracting investment as well so being more like Ontario & Quebec is not a selling feature
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Which is why I don't advocate for nothing but government funded employees. It doesn't work or make sense. However focusing solely on marginal investment dollars is like preaching Reganomics. Investment in Alberta is not based solely on marginal investment, it is also based on the value of the underlying asset base. You could reduce the tax rate to 0% and you would get no more investment in oilsands than you are right now because regardless of your marginalized rate your rate of return would be negative with the cost of the asset so low.
Conversely invesment from a Wal-Mart is not dependent on the marginalized rate at all but consumer demand potential. If there is no consumer demand then even without a tax rate there is no investment. Keeping people working, even if it is temporarily financed by debt keeps the economy moving.
My point being it is a balancing act. You are totally correct that pushing the corporate tax above any comparable jurisdictions would limit investment opportunities but I don't think that has happened because the unemployment rate has stabalized instead of spiralling down.
The fact is the best way to avoid losing foreign investment is to diversify in order to ensure no one industry can tank the economy like the oil industry has done. The NDP want to value add, they want to diversify and they want to ensure we can get our product to market when prices rebound. All without hampering a floundering economy with less consumers.