Kevin O'Leary nails it.

[Flacker]

Originally Posted by rubecube

Well the thing with Norway is that they set-up a crown corporation that automatically gets access to I believe it's 50% of their resources before they auction off the rest, most if not all of which they pump into a national heritage fund. Unfortunately I think we might be too far down the road to go that route, and it would also never fly in a province with Alberta's historical political leanings.

Agreed a National Energy company would never fly, at this stage. But I think the playing field could be leveled across all provinces with a national royalty program. Said royalty program could also mandate percentage of revenue that goes to provincial slush funds, scaled to commodity price.

<$40/barrel - keep the lights on
$40-50/barrel - small percentage of revenues to fund
$50-60/barrel - slightly larger percentage of revenues to fund.
etc...

Alberta can be used as a good example that provinces are not likely to manage these revenues well themselves.

[CorsiHockeyLeague]

Originally Posted by rubecube

What would then be your suggestion for paying for infrastructure? Would you be okay with higher personal income taxes to offset the lost revenue?

Are you under the impression that lowering corporate tax rates necessarily leads to less revenue?

[Locke]

Originally Posted by rubecube

Yeah, I completely agree. I still don't think 12% is too high, especially in an industry that receives a tremendous amount of subsidies from the feds.

And maybe it isnt, but it also isnt an island alone in the ocean either.

Everything depends on everything else. Hell, if they'd raised it to 12% 18 months ago we'd be shrugging it off like it was nothing.

[Frequitude]

Originally Posted by rubecube

Uhhh...wasn't it team blue that spent the Heritage fund? "More efficiency" is to the right what "tax the corporations!" is to the left.

Yup. Team Blue f***** it up and spent too much. Unfortunately team orange wants to spend a whole bunch more.

Originally Posted by rubecube

To be honest though, if you're going to spend money on fixing up infrastructure and whatnot, conventional wisdom says that a recession is the time to do that.

I don't see a lot of infrastructure projects in their platform.

http://d3n8a8pro7vhmx.cloudfront.net...pdf?1431112969

Totals over the next 5 years...

Non infrastructure line items
Job Creators' Tax Credit: $445M
Foundation for Arts: $60M
Stable Funding, Health Care: $7860M
Long Term Care: $560M
Homecare: $270M
Mental Health: $50M
Stable Funding, Education K-12: $664M
Stable Funding, Advanced Education: $1298M
Class Size Reduction/Inclusive Education: $375M
Reduce School Fees: $225M
School Lunch: $240M
Post-Secondary Tuition Freeze: $173M
Child Care: $500M
Women's Ministry: $5M
Child Tax Benefit: $170M
Stable Funding Child Intervention: $295M
Women's Shelters Expansion: $75M
Environmental Enforcement: $25M

Rural Bus Services Initiative: $40M

TOTAL: $13,330M over the next 5 years.


Infrastructure related line items
Energy Retrofitting Loan Program: $25M

TOTAL: $25M over the next 5 years.


Acronyms I didn't look into so don't know where to place them but they're still a drop in the bucket
STEP: $50M
FCSS: $125M

TOTAL: $175M over the next 5 years.

[CorsiHockeyLeague]

What are you defining as an infrastructure item? Not that I disagree. Although it should be pretty obvious that no matter what was in government, infrastructure projects would be dwarfed by other spending. At least take the stable funding line items out of there.

[rubecube]

Originally Posted by CorsiHockeyLeague

Are you under the impression that lowering corporate tax rates necessarily leads to less revenue?

No of course not. I can pretty safely say that eliminating the corporate tax rate entirely would.

[rubecube]

Originally Posted by Frequitude

Yup. Team Blue f***** it up and spent too much. Unfortunately team orange wants to spend a whole bunch more.


I don't see a lot of infrastructure projects in their platform.

http://d3n8a8pro7vhmx.cloudfront.net...pdf?1431112969

Totals over the next 5 years...

Non infrastructure line items
Job Creators' Tax Credit: $445M
Foundation for Arts: $60M
Stable Funding, Health Care: $7860M
Long Term Care: $560M
Homecare: $270M
Mental Health: $50M
Stable Funding, Education K-12: $664M
Stable Funding, Advanced Education: $1298M
Class Size Reduction/Inclusive Education: $375M
Reduce School Fees: $225M
School Lunch: $240M
Post-Secondary Tuition Freeze: $173M
Child Care: $500M
Women's Ministry: $5M
Child Tax Benefit: $170M
Stable Funding Child Intervention: $295M
Women's Shelters Expansion: $75M
Environmental Enforcement: $25M

Rural Bus Services Initiative: $40M

TOTAL: $13,330M over the next 5 years.


Infrastructure related line items
Energy Retrofitting Loan Program: $25M

TOTAL: $25M over the next 5 years.


Acronyms I didn't look into so don't know where to place them but they're still a drop in the bucket
STEP: $50M
FCSS: $125M

TOTAL: $175M over the next 5 years.

You could theoretically put women's shelters and energy retrofitting in the infrastructure category, and a stretch could be made to include rural bus service but point taken.

[Frequitude]

Originally Posted by CorsiHockeyLeague

What are you defining as an infrastructure item? Not that I disagree. Although it should be pretty obvious that no matter what was in government, infrastructure projects would be dwarfed by other spending.

I will admit that it is a gut feel. I'm totally open to regrouping the line items (e.g. some of the education could be for new schools), but overall would you not agree it seems fairly skewed away from infrastructure? The point was to contest rubecube's stance that its ok for the NDP to spend even more than the PCs because infrastructure spending is good during a recession. Very little of this extra spending acutally seems to be about infrastructure.

Originally Posted by CorsiHockeyLeague

At least take the stable funding line items out of there.

Those are the NDPs proposed spending changes over and above the Prentice budget. i.e. the stable funding line items are over and above already existing stable funding line items.

[codfather]

Originally Posted by rubecube

Right, but if business can only be successful at a certain corporate tax rate, whatever the threshold is, then it would appear that the demand for whatever product that business is supplying is not all that stable.

There's a whole lot more to whether a company is successful or not. Tax rates impact the net profits of a company. The impact that has, has nothing to do with supply and demand.

Originally Posted by rubecube

Again though, I do think that corporations should be responsible for paying taxes to support the infrastructure they are making use of and profiting from. Is 12% a fair number? Hard to say.

I won't disagree with this. Personally, I just think the timing was bad is all. I think the increase should probably have been introduced over time like the planned minimum wage increases. Go from 10 to 11 to 12 or even at 0.5 increments. Would be easier to handle than a sudden 20% increase in your tax bill.

[rubecube]

Originally Posted by Frequitude

I will admit that it is a gut feel. I'm totally open to regrouping the line items (e.g. some of the education could be for new schools), but overall would you not agree it seems fairly skewed away from infrastructure? The point was to contest rubecube's stance that its ok for the NDP to spend even more than the PCs because infrastructure spending is good during a recession. Very little of this extra spending acutally seems to be about infrastructure.


Those are the NDPs proposed spending changes over and above the Prentice budget. i.e. the stable funding line items are over and above already existing stable funding line items.

I've also previously said I don't mind deficits if you can justify the spending. Most of what the NDP are spending money on are programs and policies that I agree with, so I don't particularly see it as wasteful spending. And that's probably where I diverge from PC and WRP supporters ideologically because I would rather beef up social programs, health care, and education before cutting taxes because I think it's better for the longterm health of society. I'm all up for debating whether the money being allocated to these areas is being used efficiently, but we're probably not going to find common ground if we disagree on the first premise.

[OMG!WTF!]

Originally Posted by rubecube

Well the thing with Norway is that they set-up a crown corporation that automatically gets access to I believe it's 50% of their resources before they auction off the rest, most if not all of which they pump into a national heritage fund.

Norway does still own the first dollar it ever made from oil. Their fund is almost a trillion dollars which makes us look like idiots. But it's not like we just blew through 900 billion dollars. We've employed about 250k more people on average though our private industry in Alberta, not to mention spin off employment. Our household net worth in Canada is way higher than Norway. We've sent hundreds of billions to our federal piggy bank in the form of income tax and transfer payments. And I'm just guessing but I think our net worth in Alberta specifically is at least ten times higher than Norway. On the other hand we've had a series of morons in government spending it on stupid things. That said, I think we've done better than if the morons had had it all along.

http://www.oecdbetterlifeindex.org/topics/income/

[Frequitude]

Originally Posted by rubecube

I've also previously said I don't mind deficits if you can justify the spending. Most of what the NDP are spending money on are programs and policies that I agree with, so I don't particularly see it as wasteful spending. And that's probably where I diverge from PC and WRP supporters ideologically because I would rather beef up social programs, health care, and education before cutting taxes because I think it's better for the longterm health of society. I'm all up for debating whether the money being allocated to these areas is being used efficiently, but we're probably not going to find common ground if we disagree on the first premise.

I'd love those programs. In a vacuum, who doesn't want social programs. On that we can find common ground.

However I don't believe we can afford this at this moment.

If you're ok with deficit spending then I assume you're also ok with eliminating the Heritage Trust Fund for a while? Because with a deficit there is nothing to put into it.

Or are you just ok with deficit spending after some/all royalties have been removed from general revenues? That is, saving some/all resource revenue and just deficit spending vs standard non-renewable revenues (i.e. taxes)? Because then we're talking a massive deficit.

Its not just deficit spending. Its deficit spending over and above a massive f****** deficit with little savings.

That is why I and other anti-NDPers are scared of the NDP running this province off of a fiscal cliff. They are taking a bad situation and making it much worse.

Do you think we can afford the NDP's plans at the moment?

[rubecube]

Originally Posted by codfather

There's a whole lot more to whether a company is successful or not. Tax rates impact the net profits of a company. The impact that has, has nothing to do with supply and demand.

Obviously there's more to it than that but if you're going into business with a model that can only survive on a tax rate that isn't high enough to support the infrastructure and services your business makes use of, is it truly a viable business? In other words is there enough of a demand for your product to justify your business' existence and the resources it uses?

[rubecube]

Originally Posted by OMG!WTF!

Norway does still own the first dollar it ever made from oil. Their fund is almost a trillion dollars which makes us look like idiots. But it's not like we just blew through 900 billion dollars. We've employed about 250k more people on average though our private industry in Alberta, not to mention spin off employment.

Well the big discrepancy there is that 30% of Norwegians are employed in the public sector. I think in Alberta it's less than 10% if you include both federal and provincial sectors.

Our household net worth in Canada is way higher than Norway. We've sent hundreds of billions to our federal piggy bank in the form of income tax and transfer payments. And I'm just guessing but I think our net worth in Alberta specifically is at least ten times higher than Norway. On the other hand we've had a series of morons in government spending it on stupid things. That said, I think we've done better than if the morons had had it all along.

http://www.oecdbetterlifeindex.org/topics/income/

Right but that could also be partially due to personal income taxes and costs of living are being much higher in Norway than they are in Alberta. I'm not saying they're direct comparables and there are obviously different hurdles in Alberta than there are in Norway but I think they have probably managed their resources better over the long run.

[OMG!WTF!]

Originally Posted by rubecube

Obviously there's more to it than that but if you're going into business with a model that can only survive on a tax rate that isn't high enough to support the infrastructure and services your business makes use of, is it truly a viable business? In other words is there enough of a demand for your product to justify your business' existence and the resources it uses?

You're not really getting small business. If you own a restaurant it might still be profitable at a slightly higher tax rate. But is it profitable enough. If you can make 60k a year as a chef, why own your own restaurant if you're only netting 80k. The risk you're taking, as well as capital you're using and risking isn't worth the extra 20k. The 2% more you're paying in tax is a big deal for small businesses more so than large.

Right but that could also be partially due to personal income taxes and costs of living are being much higher in Norway than they are in Alberta. I'm not saying they're direct comparables and there are obviously different hurdles in Alberta than there are in Norway but I think they have probably managed their resources better over the long run

Definitely. It's impossible to compare directly but the numbers are very very different for the two countries and I think the different ways we have developed oil and gas is a big part of that.

[rubecube]

Originally Posted by Frequitude

I'd love those programs. In a vacuum, who doesn't want social programs. On that we can find common ground.

However I don't believe we can afford this at this moment.

If you're ok with deficit spending then I assume you're also ok with eliminating the Heritage Trust Fund for a while? Because with a deficit there is nothing to put into it.

Or are you just ok with deficit spending after some/all royalties have been removed from general revenues? That is, saving some/all resource revenue and just deficit spending vs standard non-renewable revenues (i.e. taxes)? Because then we're talking a massive deficit.

Its not just deficit spending. Its deficit spending over and above a massive f****** deficit with little savings.

That is why I and other anti-NDPers are scared of the NDP running this province off of a fiscal cliff. They are taking a bad situation and making it much worse.

Do you think we can afford the NDP's plans at the moment?

I think you either end up paying now or later in some shape or form, and it's usually worse the longer you wait. I look at the U.S. where a lot of Republicans were saying similar things about the Obama administration taking them off a financial cliff to implement health care reform and it certainly looked costly at the time, but it looks like things are starting to turn around and they've been gradually reducing spending. We know that province is or has been behind the eight ball on a lot of things for a long time now.

It sucks that the PCs put Alberta in as big of a hole as they did without improving various programs and services, but at some point you have to bite the bullet. Trying to cut corners and costs and band-aid over the problems just ends up costing more down the line.

And I agree that they shouldn't be factoring royalty revenues into their budget and believe those should be going to a trust fund. I'm also not saying I agree with every item the NDP is proposing either. There are probably a few things that they could hold off on.

[rubecube]

Originally Posted by OMG!WTF!

You're not really getting small business. If you own a restaurant it might still be profitable at a slightly higher tax rate. But is it profitable enough. If you can make 60k a year as a chef, why own your own restaurant if you're only netting 80k. The risk you're taking, as well as capital you're using and risking isn't worth the extra 20k. The 2% more you're paying in tax is a big deal for small businesses more so than large.

The small business tax rate is 3% and is not going up from what I understand, so why are we talking about it?

[Frequitude]

Norway is also its own country while Alberta is a province within a federation. Completely different stories.

Anyone know our net outflow from transfer payments since 1950? Imagine putting that in a trust fund.

Disclaimer: There are many many more differences between being a province and a nation, some helpfull and some hurtfull, than just transfer payments. I'm merely curious.

[OMG!WTF!]

Originally Posted by rubecube

The small business tax rate is 3% and is not going up from what I understand, so why are we talking about it?

Good point. But substitute $15 minimum wage and it's a similar kick.

[Flacker]

Originally Posted by Frequitude

Norway is also its own country while Alberta is a province within a federation. Completely different stories.

Anyone know our net outflow from transfer payments since 1950? Imagine putting that in a trust fund.

Disclaimer: There are many many more differences between being a province and a nation, some helpfull and some hurtfull, than just transfer payments. I'm merely curious.

W in the actual F is Quebec doing to justify the largest transfer both total and per capita:



I would imagine if only the transfers Quebec has received over the years where in a trust fund, Alberta would be just fine.

That is $9.5B, this year alone. Not sure how that can be legit.

Per Capita:


Correction: Quebec not receiving the most per capita. Just the most populous "have not"<- joke of a term.