Kevin O'Leary nails it.

[rubecube]

Originally Posted by codfather

This is not how it works at all...

Products and services are based on supply and demand. Companies and businesses are responsible for providing these while maximizing profit. Lowering the corporate tax rate means a business retains more profit which can then be reinvested into the company. So you're right that tax rates don't influence demand for a product (directly at least, though indirectly this could be argued), but they do determine impact how profitiable a company is and where they spend their revenues (less to reinvest into the business because a bigger share of profit went to the government).

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. 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.

[RubberDuck]

Originally Posted by rubecube

Relevance to the argument?

I was just wondering if you have any first hand knowledge of what you speak or if you just make a lot of assumptions about how real life works. I guess I already knew the answer...

[rubecube]

Originally Posted by RubberDuck

I was just wondering if you have any first hand knowledge of what you speak or if you just make a lot of assumptions about how real life works. I guess I already knew the answer...

Thanks for the ad hominem contribution.

[Flacker]

Originally Posted by polak

Actually that's pretty flawed since you're assuming that life expectancy and retirement age stays the same but the generations thing wasn't the main point of my argument. Does it really make a difference if we're taking steps for secure Alberta's future for your grandkids or your great grandkids? Your whole viewpoint is that you only care about your employment, right now, today.

That's the definition of short sighted.

No, I worry about keeping corporations in Alberta, that have been paramount in creating what we enjoy today.

Thus, enjoying the same benefits as far into the future as possible.

The only way to bankroll diversity in Alberta will be using O&G revenues, which is currently our primary source of income.

Simply put... It is better to get a small percentage of a large pie, rather than a large percentage of a small pie.

[polak]

Originally Posted by Flacker

No, I worry about keeping corporations in Alberta, that have been paramount in creating what we enjoy today.

Thus, enjoying the same benefits as far into the future as possible.

The only way to bankroll diversity in Alberta will be using O&G revenues, which is currently our primary source of income.

Simply put... It is better to get a small percentage of a large pie, rather than a large percentage of a small pie.

Why would the Pie get smaller when our corporate tax is now pretty much equal or still lower than all the other big oil producing provinces and states? I agree we need to fund our diversification with O&G revenue and currently we're not making enough of it (when times were good) to do that and maintain the Alberta quality of life. So pick one, Mr. Anti-tax. Do we raise income tax, raise corporate tax or lower our quality of life?

[Handsome B. Wonderful]

Originally Posted by polak

Two full generations? like 100 years from now?

WTF. You seriously don't know what a generation is? Two generations is 40-50 years from now.

[RubberDuck]

Originally Posted by rubecube

Thanks for the ad hominem contribution.

I never claimed to be adding anything to the debate. I pretty clearly just wanted to point out that you have no idea what you are talking about.

[rubecube]

Originally Posted by RubberDuck

I never claimed to be adding anything to the debate. I pretty clearly just wanted to point out that you have no idea what you are talking about.

Well you've backed up your accusation exceptionally well.

EDIT: Although I should have specified corporation instead of business in my first post if that makes you feel validated.

[Locke]

Originally Posted by rubecube

A business that can't support itself on a 12% corporate tax rate probably shouldn't be in business, as it's likely not sustainable long term.

I should point out that the stated Federal tax rate is 38% with a 10% abatement, and now the provincial tax rate is 12%.

So the combined stated tax rate is closer to 40% for businesses earning in excess of $500K.

The reason its a big deal is because its pretty much the single biggest expense.

[rubecube]

Originally Posted by Locke

I should point out that the stated Federal tax rate is 38% with a 10% abatement, and now the provincial tax rate is 12%.

So the combined stated tax rate is closer to 40% for businesses earning in excess of $500K.

The reason its a big deal is because its pretty much the single biggest expense.

Still lower than the U.S. though, is it not? And we still also have a massive problem with corporations not reinvesting their profits.

[Locke]

Originally Posted by the_only_turek_fan

Dude, I am trying to have an actual debate on this.

How can the gov. make it has easy as possible for businesses to start up, and for businesses to relocate to AB?

The Canadian people would not tolerate blowing up the Rand forula.

How else are you going to compete with the 24 right to work jurisdictions in the United States? What about Mexico?

If a company comes to Alberta and set's up shop and creates jobs that are here in AB, as a tax payer I would be OK with that business not paying corporate tax because to me the jobs created far outweigh having a corporate tax and less jobs.

I'm a proponent of helping provide incentives to businesses but this is unrealistic if not flat-out incorrect.

The value of those jobs absolutely does not outweigh the value of that company paying taxes and the two should not be evaluated head-to-head there should be a balance of both.

[Flacker]

Originally Posted by polak

Why would the Pie get smaller when our corporate tax is now pretty much equal or still lower than all the other big oil producing provinces and states? I agree we need to fund our diversification with O&G revenue and currently we're not making enough of it (when times were good) to do that and maintain the Alberta quality of life. So pick one, Mr. Anti-tax. Do we raise income tax, raise corporate tax or lower our quality of life?

Always about more revenue with team orange, never about more efficient spending.

Spending is out of control, is why the revenue we used to stuff the Heritage Fund with, is no longer there.

How was it that Mr. Lougheed was able to make it work?

[rubecube]

Originally Posted by Flacker

Always about more revenue with team orange, never about more efficient spending.

Spending is out of control, is why the revenue we used to stuff the Heritage Fund with, is no longer there.

How was it that Mr. Lougheed was able to make it work?

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.

[Flacker]

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.

Without question, team blue pissed it away. Government waste in this province was created by the PCs (post-Getty), I just see that there is little push for the NDPs to reign any of this waste in. Kind of like, meet the new boss, same as the old boss.

Notley has said that she is taking a page from Lougheed's book in trying to get Alberta's fair share. The difference is that Lougheed had immense business acumen and wasn't in bed with the unions. Hard to control costs when you are hand in hand with CUPE.

[polak]

Originally Posted by Flacker

Always about more revenue with team orange, never about more efficient spending.

Spending is out of control, is why the revenue we used to stuff the Heritage Fund with, is no longer there.

How was it that Mr. Lougheed was able to make it work?

The reason I voted NDP over Wildrose and PC was because neither of them had any sort of solutions for the revenue problem besides capping public salaries or taxing healthcare. Down right dumb in my eyes.

[rubecube]

Originally Posted by Flacker

Without question, team blue pissed it away. Government waste in this province was created by the PCs (post-Getty), I just see that there is little push for the NDPs to reign any of this waste in. Kind of like, meet the new boss, same as the old boss.

Notley has said that she is taking a page from Lougheed's book in trying to get Alberta's fair share. The difference is that Lougheed had immense business acumen and wasn't in bed with the unions. Hard to control costs when you are hand in hand with CUPE.

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 get that a lot of people think cuts need to be made in the public sector, and maybe that's the case. I just don't think that the level of cuts that need to be made, while still keeping an acceptable level of servants is going to drastically alter the amount of spending the government does, especially if we're talking lower or mid-level employees.

[Locke]

Originally Posted by rubecube

Still lower than the U.S. though, is it not? And we still also have a massive problem with corporations not reinvesting their profits.

I'm not familiar with the US rates, but I should caveat that with the fact that obviously there are credits and abatements and various other things, thats the stated rate not the effective rate.

You're always going to have problems with corporations not directly re-investing their profits, its about trying to achieve a balance.

[Flacker]

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 get that a lot of people think cuts need to be made in the public sector, and maybe that's the case. I just don't think that the level of cuts that need to be made, while still keeping an acceptable level of servants is going to drastically alter the amount of spending the government does, especially if we're talking lower or mid-level employees.

Agreed, a downturn is the ideal time to capitalize on cheap labour costs.

And I don't disagree that the royalty and taxation model is broken. They just approached it in a very damaging way, by not having a finite schedule and plan.

I also think the way the provinces are setup to compete against each other is counterproductive. The federal government should be looking at model similar to Norway, who have socked away one hell of a nest egg. Such talk will be scary to most westerners however, because it sounds like NEP 2.0.

We need a federally mandated royalty regime IMO, with revenues still controlled provincially, and fairly distributed via provincial transfer payments.

[rubecube]

Originally Posted by Flacker

Agreed, a downturn is the ideal time to capitalize on cheap labour costs.

And I don't disagree that the royalty and taxation model is broken. They just approached it in a very damaging way, by not having a finite schedule and plan.

I also think the way the provinces are setup to compete against each other is counterproductive. The federal government should be looking at model similar to Norway, who have socked away one hell of a nest egg. Such talk will be scary to most westerners however, because it sounds like NEP 2.0.

We need a federally mandated royalty regime IMO, with revenues still controlled provincially, and fairly distributed via provincial transfer payments.

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.

[rubecube]

Originally Posted by Locke

I'm not familiar with the US rates, but I should caveat that with the fact that obviously there are credits and abatements and various other things, thats the stated rate not the effective rate.

You're always going to have problems with corporations not directly re-investing their profits, its about trying to achieve a balance.

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.