Canadian Businesses Say Tax Hike Risks Deeper Productivity Slump
Canadian Businesses Say Tax Hike Risks Deeper Productivity Slump
Canada’s decision to increase capital gains taxes was criticized by businesses who warned the move would only exacerbate the country’s investment and…
But some businesses said the approach could worsen what the Bank of Canada’s No. 2 official last month called a productivity “emergency.” Canada numbers rate poorly thanks to weak investment in machinery, equipment and intellectual property, the bank’s senior deputy governor Carolyn Rogers said.
What a crock of shit. Want a good way to avoid paying taxes as a business? Reinvest profits back into the business via purchases of equipment (ok, you have to amortize that one over a few years), higher wages, more staff, R&D, etc. More money reinvested into these productivity-generating purchases (that are apparently in a state of emergency) means less you're extracting from the business, and therefore less you're paying via this new slightly-higher capital gains tax.
Want a cool side-benefit? This actual spending (rather than wealth-extraction and subsequent hoarding) will generate real economic activity which will have a compounding effect on the economy resulting in actual economic growth. The taxes generated by those who decide not to reinvest more of their profits will have a similar effect, with that added government spending stimulating the economy in its own way.
Capitalism has many faults, but while we've got it we could at least adhere to one of its pretty fundamental tenets that money needs to flow through the economy for it to work. Hoard too much wealth and the gears dry up, resulting in an economic downturn.
Henry Ford - despite being a total piece of shit in his own right - at least recognized the need for his workers to be able to afford to buy the product they built. Too many modern "titans of industry" seem to be forgetting that.
Source: I'm not an economist, but I do manage the finances for a small Canadian business of about 25 employees. We don't give a shit about becoming rich - we just want to keep the lights on, live in reasonable (but not excess) comfort, pay our employees as well as our funds allow, and enable my mom (our company president) to be able to one day retire.I live in constant fear of a deep recession that I think is inevitable, but believe that actions like these new higher taxes on the rich will help stave off or mitigate. In my opinion we need much higher taxes on substantial wealth but in the meantime I'll take this as progress.
Well said! I wish I could give you more than one upvote!
Much appreciated! I get fired up by this sort of thing, and it's nice to know I'm not alone. Too often it feels that way with the direction our species seems to be heading.
For those who aren't aware, Financial Post is owned by Postmark Media, a media conglomerate owned by (66% share) Chatham Asset Management LLC, an American Hedge Fund. They also own controlling stake in AMI media (now a360 media) which was responsible for killing a story about an affair Trump had with Karen McDougall (playboy) in advance of the 2016 election. Read the link for a few other stories they killed related to Trump and the 2016 election. (For what it's worth after the scandal broke, Chatham Asset MGMT took action and sold off some of the newspapers.)
Additionally, Postmark Media has a strong history of endorsing the conservatives, for what thats worth.
Pay your fucking taxes.