Alberta Politics & Government Thread 3.0

[BoLevi]

Originally Posted by Monahammer

Yeah, I actually agree with this to some extent, but I'll use a more specific example of why I think this is happening:

The government could, for example, greatly increase the royalties it collects on resource extraction. After all, the crown ultimately owns the minerals and other things we stand on. But, if this were the case, it would be difficult for venture capital to access the resource development market because they'd be calculating the cost to access the resources before their profit is established, making the project economics more difficult. Taxing the profit instead removes this impediment, and allows for better tax handling for corporations and development.

It breaks down when you apply this to roads or infrastructure development... should we have tolls on basically everything? At this point IMO the argument becomes for efficiency.

It's not a perfect system, and we could change it, but ultimately taxes on corporate and individual profits are potentially less inefficient than other models.

It's an independent consideration from the amount the govt should collect.

If we need to collect $10 in taxes, then the next discussion is where within the flow of wealth in the private sector should we collect the taxes?

Income taxes are probably a bad one because it taxes productive activities. The main advantage of them from a political perspective is they allow political parties to a differentiate themselves based on who they want to reward.
A flat tax on consumption removes the need for a complicated tax code thereby removing the main level with which politicians can dispense favoritism to their chosen group. But there's lots of good arguments on all sides of this issue.

[BoLevi]

Originally Posted by Monahammer

ignore the bolding for a second, but i want to note that you said that.

Can you elucidate for me the reasons you think that government is now hindering wealth creation?

A dollar in the hands of the government is a dollar that is not in the hands of an individual. The private sector is better at allocating capital, so the dollar in the hands of the government has less utility. The dollar in the hands of the government only has more utility than a private dollar if it is still being spent on functions that unlock wealth. The moment the government starts collecting and spending dollars on other forms of capital allocation, they are hindering the potential of the economy. Needless to say we're way, way past that point.

Bonus: governments that went to provide excess services generally crowd out the private sector, reducing innovation and efficiency gains that would arise from a competitive private sector.

[MelBridgeman]

Originally Posted by iggy_oi

Huh?

Corporations treat taxes as part of their operating costs, just like wages, utilities, and materials.

To maintain profitability, these costs are often included in the price of goods or services sold to customers.

Example: If a corporation’s tax burden increases, it may raise its prices to offset the additional expense.

is that simple enough for ya?

People are the only ones who pay taxes.

[Fuzz]

Originally Posted by BoLevi

A dollar in the hands of the government is a dollar that is not in the hands of an individual. The private sector is better at allocating capital, so the dollar in the hands of the government has less utility. The dollar in the hands of the government only has more utility than a private dollar if it is still being spent on functions that unlock wealth. The moment the government starts collecting and spending dollars on other forms of capital allocation, they are hindering the potential of the economy. Needless to say we're way, way past that point.

Bonus: governments that went to provide excess services generally crowd out the private sector, reducing innovation and efficiency gains that would arise from a competitive private sector.

this argument falls apart when you compare something like the US medical system, which is the least efficient way to allocate capital. Paying paper pushers just to push paper is inefficient. Cutting out the middle men with a single payer system where you don't pay people for busywork greatly increases the efficiency of capital. This is easily seen when you compare dollars spent in the US vs every other system in developed countries.



Why is unlocking wealth and capital the item you consider most important? Should, say, happyness be a better metric? And if it is, then chasing maximum capital reduces happyness (if you work every waking hour, you probably aren't happy).

[GGG]

Originally Posted by BoLevi

A dollar in the hands of the government is a dollar that is not in the hands of an individual. The private sector is better at allocating capital, so the dollar in the hands of the government has less utility. The dollar in the hands of the government only has more utility than a private dollar if it is still being spent on functions that unlock wealth. The moment the government starts collecting and spending dollars on other forms of capital allocation, they are hindering the potential of the economy. Needless to say we're way, way past that point.

Bonus: governments that went to provide excess services generally crowd out the private sector, reducing innovation and efficiency gains that would arise from a competitive private sector.

Kansas experiment?

Remember that an economy on its own is not a good. The economy facilitates a standard of living. You should read the latest Nobel in economics research around what types of institutions lead to prosperous countries.

They found that having “inclusive” (not woke inclusive but instead institutions which reinvest in the local area) rather than extractive institutions led to prosperity. I’m not doing it justice but well worth reading. In centers around answering the question of why did colonialism produce winning nations and losing nations.

[Fuzz]

Originally Posted by MelBridgeman

is that simple enough for ya?

People are the only ones who pay taxes.

Perhaps we should tax things like share buy backs and sitting on unspent capital.

[iggy_oi]

Originally Posted by MelBridgeman

is that simple enough for ya?

People are the only ones who pay taxes.

You mean like people who run businesses?

My favourite part is where what you quoted explicitly states corporations may increase their prices instead of will increase their prices.

Did you know that people pay for profits too? And wages? Bonuses?

And that if the tax rate drops to zero a successful business has no incentive to lower their prices if the market has already proven it will pay the current price?

Mad world, eh?

[BoLevi]

Originally Posted by Fuzz

this argument falls apart when you compare something like the US medical system, which is the least efficient way to allocate capital. Paying paper pushers just to push paper is inefficient. Cutting out the middle men with a single payer system where you don't pay people for busywork greatly increases the efficiency of capital. This is easily seen when you compare dollars spent in the US vs every other system in developed countries.



Why is unlocking wealth and capital the item you consider most important? Should, say, happyness be a better metric? And if it is, then chasing maximum capital reduces happyness (if you work every waking hour, you probably aren't happy).

The US healthcare system is a poor choice to illustrate almost anything, unless the thing you are trying to illustrate is regulatory capture.

As what I consider most important? I don't consider anything most important, that's up to each individual.

[Roughneck]

Originally Posted by BoLevi

As what I consider most important? I don't consider anything most important, that's up to each individual.

Are you not an individual?

[BoLevi]

Originally Posted by GGG

Kansas experiment?

Remember that an economy on its own is not a good. The economy facilitates a standard of living. You should read the latest Nobel in economics research around what types of institutions lead to prosperous countries.

They found that having “inclusive” (not woke inclusive but instead institutions which reinvest in the local area) rather than extractive institutions led to prosperity. I’m not doing it justice but well worth reading. In centers around answering the question of why did colonialism produce winning nations and losing nations.

The Kansas experiment was interesting....certainly lots to be learned. Was it a failure of intent or a failure of execution is a useful discussion. Personally, I think they were incompetent.

The AJR nobel was well deserved, even though I'm not a huge Simon Johnson fan mostly because of his association with the IMF. But the work is interesting. The problem with the interpretation (and in some cases their interpretation), is you can expand the the list of inclusive institutions ad infinitum and think that you are being reasonable all along the way. That comes back to my original point: each layering of gov't intervention is less useful than the last. Eventually we get government spending and intervention that has a negative return.

[Fuzz]

Originally Posted by BoLevi

The US healthcare system is a poor choice to illustrate almost anything, unless the thing you are trying to illustrate is regulatory capture.

As what I consider most important? I don't consider anything most important, that's up to each individual.

Almost anything, but in this case it's perfect

[Harry Lime]

The private sector only allocates capital for the purpose of making shareholders wealthy. The quality of products produced are not of any consequence. That is the difference between business and governance, and why businessmen make such poor legislators. The point of public service is to make things that last as long as possible in a form that won't deteriorate.

All of the best politicians (the ones that end up on money) are there solely for this reason. I struggle to think of any politician in a Western democracy, at the moment, that comes close to meeting that objective. They are all businessmen.

[MelBridgeman]

Originally Posted by iggy_oi

And that if the tax rate drops to zero a successful business has no incentive to lower their prices if the market has already proven it will pay the current price?

You don't know that, unless that sucessful busines is a monoply all it takes is one business to lower prices.

Money belongs in the hands of the people not the goverment.

[MelBridgeman]

Originally Posted by Fuzz

Perhaps we should tax things like share buy backs and sitting on unspent capital.

Yes lets tax everything!

[MelBridgeman]

Originally Posted by Harry Lime

The private sector only allocates capital for the purpose of making shareholders wealthy.

First off there is nothing wrong with that, shareholders are your TFSA, RRSP, RIFS, pension plans, your inheritance ect...Corporate success trickles down big time.

Secondly there are other reasons, it isn't the only one lol

Create jobs and provide livelihoods for millions of employees.

Drive innovation by investing in research and development.

Offer goods and services that improve quality of life.

Submit taxes that fund public infrastructure, healthcare, and education.

[iggy_oi]

Originally Posted by MelBridgeman

You don't know that, unless that sucessful busines is a monoply all it takes is one business to lower prices.

Odd, many different businesses often have different prices than their competitors.

Money belongs in the hands of the people not the goverment.

The people decide on their governments.

[iggy_oi]

Originally Posted by MelBridgeman

Yes lets tax everything!

That’s not taxing everything. That’s not even taxing everyone. It’s not even taxing the majority. Think of the greater good Mel and spare as many people as possible from having to pay more money to the government.

[iggy_oi]

Originally Posted by MelBridgeman

First off there is nothing wrong with that, shareholders are your TFSA, RRSP, RIFS, pension plans, your inheritance ect...Corporate success trickles down big time.

Do you realize that lot of people don’t have a TFSA, RRSP, RIFS, Pension beyond CPP, an inheritance, etc?

How does it trickle down to them?

[MelBridgeman]

Originally Posted by iggy_oi

Odd, many different businesses often have different prices than their competitors.

This is true because of variations in their costs, strategies or percieved value. In a competitve market, when one business lowers prices often others follow suit to maintain their market share. But i am talking over larger time scales than maybe you are.

But not everything is black and white, some business won't, some will, it all depends on how competitve it is.

Higher coporate taxes in the long run just hurt the consumer.

[Fuzz]

Originally Posted by MelBridgeman

Yes lets tax everything!

It's taxing unused capital, which by its nature is inefficient. To maximize utility, taxing it so it can be spent is economically advantageous. Isn't that the goal?