Quote:
Originally Posted by GGG
I think Cliffs point is that the NDP in their budget assumed a linear increase in funds from 8%-11%. We know that corporate taxes create some economic drag so tax return on increasing rates is non-linear.
So if you include linear rates in your budget you aren’t making a correct forecast.
That can be true at the same time as reducing to 8 doesn’t produce a societal benefit.
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We "know" that tax increases will create economic drag in the same way we "know" reducing taxes will increase economic activity. That was my point in brining up the tax reduction. What I am disputing is that underlying assumption that it will create drag. Because that assumption is based on the same models that aren't producing the increased activity.
So I will trust an economist like Todd Hirsh to have checked the numbers and determined that any drag would have been minimal. I would expect any drag to be offset by increased demand side drivers because the government was taking that increase in taxes and injecting it back into the economy.
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