Quote:
Originally Posted by BoLevi
I'm not saying that I agree or disagree with your points.
I am showing that your points are contradictory.
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But they aren’t.
We have discussed two types of positive impacts of lowering corporate taxes.
1. Increased local investment
-our corporate tax rates are so low they have diminishing returns on investment
-studies have shown that we are rates are low enough the investment increased by them does not offset the cost of reduced taxes
2. Stealing business
-when one jurisdiction set artificial low rates (ie Alberta ) it creates a prisoner dilemma because other jurisdictions feel the need to match or loose business
-yet - the amount of business that actually moves is highly debated but - the kicker is you’re not creating investment just leeching it.
- do you create a race to the bottom to push taxes lower - all the while getting less and less positive investment due to diminishing returns? This hurts all of society
- this is similar to price waring with corporations -avoid at all cost. The increased demand doesn’t outpace the losses from the reduced cost unless you eliminate your competitors- we can’t eliminate Saskatchewan
We need to strive for minimum business taxes that allow for efficient reinvestment- setting rates below that creates a race to the bottom gaining society very little
Edit/ we need to strive for an agreement on minimum tax rates - and acknowledge there can be good reason to go above them but set the floor across jurisdictions.