An NDP plan to slash corporate tax rates?

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Originally posted by Left J.A.B.:
[b]Not only that corporations are legally individuals under the law. If you are propsoing to change that too, then it might work. Right now that is the basis for taxation (not the different rate) and a lot of other things that corporations benefit from.

The short answer, you don't know nearly as much about the tax system as you think you do.[/b]

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I do: Corporations are taxed differently, in accordance with Section 3 of the Income Tax Act and the "definitions" provided in that act.

Someone above raised the question of salary increases decreasing taxation. While true, there is no special government motive (as opposed to capital cost allowances for capital assets), since only 100% of salary expenses are deductible.

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Originally posted by Left J.A.B.:
[b]Just wondering where you think those corporations get their money from? Maybe people's spending power eh? [/b]

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No, they get their money from someone's labour, which they appropriate a part of. If you're saying that can't realize those gains unless they sell products, I'm in agreement with you. But the tax increases I propose are obviously massively skewed against a minority of consumers (the wealthiest), so I don't share your pessimism about corporations going poor. In fact, by encouraging them to reinvest a larger proportion of their revenues (tax-free!), they will likely be able to produce at lower cost.

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[b]Much better to have a balanced approach that asks corporations to pay for some of the things they benefit from like roads, an educated workforce, communication lines, health care for workers and so on.[/b]

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You have totally misunderstood my proposal. Read it again please. I said abolish corporate [b][i]INCOME[/i][/b] tax. Not any other tax. Of course corporations will continue to have to pay for everything you mentioned. I daresay a decent government would force them to pay much more. All I said was, don't tax their earnings.

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[b]Not only that corporations are legally individuals under the law. If you are propsoing to change that too, then it might work. Right now that is the basis for taxation (not the different rate) and a lot of other things that corporations benefit from.[/b]

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You're quite right, for at least some purposes, corporations could not be defined as persons - although it still has to be legally possible for them to sue and be sued, held liable for violations of law, etc.

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[b]The short answer, you don't know nearly as much about the tax system as you think you do.[/b]

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I plead guilty. But I do know rhetoric and sophistry when I hear it from various politicians. My proposal is a challenge to progressive people to speak openly and truthfully, and to stop adopting an oh-so-superior mentality toward the allegedly greedy, selfish, unwashed, conservative-minded populace.

ETA: I crossposted with Jacob Richter. He says he understands tax law. Please help me out here!!!

[ 28 October 2008: Message edited by: unionist ]

Ok so far we've established the following:

1. Corporate taxation does nothing to enhance or damage productivity.
2. There is no evidence that corporate taxes in fact hinder said corporate entities from making record profits.
3. More foreign control of Canadian Corporate sectors means profit (that is not going to Canadian CEO's golden parachutes) from said entities ends up elsewhere.
3a. If true, how does Canada get any advantage without direct taxation?
4. Overall Canada has Tax Room to spare vis a vis a comparison to other industrialized nations.
5. (disputed) argument, however it is posited that "Big Wealth" individuals (I.E industrialists in ye olde sense of ye word) wealth is very much tied to to corporate entities....in the form of stocks, shares, equity etc. Therefore, paper wealth might not be indicative of actual taxable income on said individuals.
6. (disputed) Canadian Corporate taxes are competitive, even when factoring in sub central taxation.... over all according to the Marxist Cato institute for instance, Canadian Corporate Taxes are lower than the U.S..... THE bastion of free market capitalism.
7. While few on rabble (I will presume) are not against MORE progressive income taxation, It is disputed that the proposed tax shift would be ample to supply generous social programs, let alone the status quo.
7b. Assuming the shift would be substantial (One could argue MASSIVE) to private income, the same right wing argument would apply to "the wealthy" that they now apply to corporate entities...namely taxes must be lower or they will flee.
8. The "Race to the Bottom" re: Corporate Taxation is lose lose. Name one country that is NOT a banana republic that has no corporate taxes.
9. (disputed) sorry Unionist, a noble cranial exercise, but it stinks of cow patties. [img]smile.gif" border="0[/img]

(I leave the rest to others to continue as I now might be having an aneurism.)
10.
11.
Infinity.

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Originally posted by Mojoroad1:
[b]2. There is no evidence that corporate taxes in fact hinder said corporate entities from making record profits.[/b]

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Correct. But the Orange Shift™ would put those profits into the business, and into the pockets of workers to a proportionally far higher extent than of managers and executives.

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[b]3. More foreign control of Canadian Corporate sectors means profit (that is not going to Canadian CEO's golden parachutes) from said entities ends up elsewhere.[/b]

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More foreign control? where did you draw that conclusion? When foreigners see the full extent of items #3 and #4, Canada will plummet on their list of preferred tax shelters and get-rich-quick investment opportunities. We'll struggle along somehow without them.

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[b]3a. If true, how does Canada get any advantage without direct taxation?[/b]

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Not true - see above - so no problem.

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[b]5. (disputed) argument, however it is posited that "Big Wealth" individuals (I.E industrialists in ye olde sense of ye word) wealth is very much tied to to corporate entities....in the form of stocks, shares, equity etc. Therefore, paper wealth might not be indicative of actual taxable income on said individuals.[/b]

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Correct. I wouldn't have them pay one single penny on wealth which is productively invested. The minute they cash out and make gains, or earn a dividend, however, they will pay until it hurts. Lovely, isn't it?

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[b]6. (disputed) Canadian Corporate taxes are competitive, even when factoring in sub central taxation.... over all according to the Marxist Cato institute for instance, Canadian Corporate Taxes are lower than the U.S..... THE bastion of free market capitalism. [/b]

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You're not following me. I don't care if Canadian corporate taxes are higher or lower than the U.S. What are we "competing" with them for anyway??? I said, corporate income taxes should be [b]done away with - deep-sixed - push up daisies[/b]. It's a wrongheaded approach, and it's time someone said it openly. Tax the wealthy, not the economy!

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[b]7. While few on rabble (I will presume) are not against MORE progressive income taxation, It is disputed that the proposed tax shift would be ample to supply generous social programs, let alone the status quo.[/b]

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That's where nationalization of profitable sectors essential to the Canadian economy comes in. If you're correct (and I have no idea whether you are or not - although I doubt it), then government, as owner of (say) the oil and gas sector, could make megatonnes of profit, over and above the needs of reinvestment (obviously), and allocate a healthy chunk to... generous social programs!

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[b]7b. Assuming the shift would be substantial (One could argue MASSIVE) to private income, the same right wing argument would apply to "the wealthy" that they now apply to corporate entities...namely taxes must be lower or they will flee.[/b]

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Billionaires "fleeing" without their assets (cf. item #4) somehow isn't as Armageddon-like a prospect as corporations shutting down their plants and moving elsewhere. So I'm not too worried about that right-wing argument. It won't draw blood any more. The new owners of the abandoned enterprises will create a contingency fund to organize farewell parties for the erstwhile owners. Meanwhile, production carries on, jobs are saved, life is fine.

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[b]8. The "Race to the Bottom" re: Corporate Taxation is lose lose. Name one country that is NOT a banana republic that has no corporate taxes.[/b]

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Canada! Oh crap, I'm getting ahead of myself again...

Anyway, who needs to copy foreign models? We've got brains, brawn, and broad resource capacity. Let's use 'em.

[i]The Orange Shift™ - Tax the Wealthy, Grow the Economy![/i]

Outside of the huge gaping holes in your regimen regarding foreign ownership, you will immediately be charged in the media with fomenting 'class warfare'. Your taxing of wealth will be painted as 'discouraging entrepreneurialism and excellence'. It will be said that you are stripping the investor class of their ability to create the new wealth that (supposedly) 'trickles down' to us all.

All in all, I'd say you're talking too much disruption for too little effect.