In the second paragraph, you describe revenue received as “income taxes”, but that amount includes all taxes, such as GST and payroll taxes, not just income taxes. You just need to delete the word “income”.
Otherwise, I suspect you need to control for a couple other variables. I suspect Alberta’s success on the measures you chose (and its choice of corporate tax rate) have as much to do with its high level of resource revenue compared to other provinces.
You're certainly correct that Alberta is a bit of an outlier. But I hope that my choice of *four* distinct metrics for quantifying economic health would go at least some distance to minimize the impact of the "oil advantage".
I’m not sure your numbers are correct. I think the federal gov takes in about $200billion bot quarterly in income taxes . Ontario takes in about $35b annually.
You're right. I should have characterized the Q2 2024 "federal government" revenues as "consolidated government" - which is the Statistics Canada number I was actually using. I'll update that. But my provincial numbers are for all 10 provinces, not just Ontario.
It would be interesting to add Federal Government Surplus or Deficit to your list of four economic indicators. I suspect there is a 6 to 18 month lag but after watching https://findingthemoneyfilm.com , there appears that higher Corporate taxes in (and following) years of large federal deficits don't effect GDP and GDP per capita much at all, whereas higher corporate taxes during year of federal gov surplus is a bit of a GDP per capita dumpster fire.
Well I suspect we wouldn't have a lot of data to test that possibility. As I recently wrote (https://www.theaudit.ca/p/government-spending-debt-politics), Canada hasn't had a federal surplus in at least fifteen years. And besides Alberta, I'm not sure any provinces have escaped deficits for at least that long.
Thanks this is interesting! How exactly does the "Shareholders, of course, will pay income tax on those dividends" and "when sold will naturally pay capital gains taxes" work when the shares are held by foreign corporations?
That one's a bit above my pay grade, I'm afraid. Although I do know that dividends are taxed in Canada (as a withholding amount) unless there's an existing tax treaty with the shareholder's country. Nevertheless since, one way or another, all that income would presumably be taxed in the foreign country anyway, on a macro-economic level, it probably works out the same way.
All taxation is theft. "Fair" theft is an oxymoron. Corporate tax is a tax on productive enterprise with capital investment-distorting consequences and paid for by consumers, employees, and shareholders. It is one of the least efficient forms of theft and should be abolished. The benefits would be substantial (accountants, lobbyists, and lawyers would have to seek productive work elsewhere), corporations would move to such jurisdictions, and the bonus would be the exploding heads of Jacobins and Bolsheviks.
DB, put differently "I" shouldn't have to pay anything but "you" should have to pay everything.
Pretty well most people think that they are paying too much and others are paying too little. Most people.
I am a retired CPA and I found something very curious in my working life when I was dealing with the wealthy. There are, obviously, always exceptions but ever so many of my wealthy clients would acknowledge that they had a pretty good deal in Canada. Their comments came because they had often travelled to many parts of the world, whether for work or pleasure, and they found that low tax rates had terrifically deleterious effects.
Put differently, if you say that low tax rates are a panacea, then why don't you move to Mississippi? Mississippi has very low tax rates (comparatively) but also has a pretty low (comparatively) standard of living, etc., etc. That doesn't mean that the converse is true, i.e. that high tax rates are wonderful as they also are proven to be deleterious. The key - obviously - is (too paraphrase Goldilocks) not too high and not too low.
So, so many of my wealthy clients would tell me that I was to absolutely follow the rules and to not try anything that might attract the attention of CRA. Absolutely something that made me comfortable!
I found that my wealthy clients, as a general rule, just shook their head when I gave them "the number" and simply paid up; they didn't try anything untoward. They recognized that overall, our system worked. Imperfectly to be sure, but it worked.
My conclusion: the only thing wrong with the rich folks was that we simply didn't have enough of them! They paid outlandish amounts of taxes while ever so many of the rest of us benefited from (relatively) lower rates.
I view fair as a four letter word. Many declare something is fair or say something should be fair without ever explaining what is fair. When it comes to taxes trying to decide what is fair is a fool's errand. The problem is most items that are taxed have no direct connection to the services the government provides. As a result, it is easy to find examples of unfair tax situations.
I think the best we can do is come up with reasonable tax policies that are consistent, cost effective, and consider the economic impact.
I believe a number of Canadians think the wealthy and large companies have all kinds of loopholes that enable them to avoid taxes. As you have pointed out that isn't true, but a number of politicians perpetuate the myth in order to score cheap political points. After all it is easier to accept that the rich have done better than you because they are a bunch of crooks.
In the second paragraph, you describe revenue received as “income taxes”, but that amount includes all taxes, such as GST and payroll taxes, not just income taxes. You just need to delete the word “income”.
Otherwise, I suspect you need to control for a couple other variables. I suspect Alberta’s success on the measures you chose (and its choice of corporate tax rate) have as much to do with its high level of resource revenue compared to other provinces.
Yup. I've fixed it now. Thanks.
You're certainly correct that Alberta is a bit of an outlier. But I hope that my choice of *four* distinct metrics for quantifying economic health would go at least some distance to minimize the impact of the "oil advantage".
I’m not sure your numbers are correct. I think the federal gov takes in about $200billion bot quarterly in income taxes . Ontario takes in about $35b annually.
You're right. I should have characterized the Q2 2024 "federal government" revenues as "consolidated government" - which is the Statistics Canada number I was actually using. I'll update that. But my provincial numbers are for all 10 provinces, not just Ontario.
Thanks!
It would be interesting to add Federal Government Surplus or Deficit to your list of four economic indicators. I suspect there is a 6 to 18 month lag but after watching https://findingthemoneyfilm.com , there appears that higher Corporate taxes in (and following) years of large federal deficits don't effect GDP and GDP per capita much at all, whereas higher corporate taxes during year of federal gov surplus is a bit of a GDP per capita dumpster fire.
Well I suspect we wouldn't have a lot of data to test that possibility. As I recently wrote (https://www.theaudit.ca/p/government-spending-debt-politics), Canada hasn't had a federal surplus in at least fifteen years. And besides Alberta, I'm not sure any provinces have escaped deficits for at least that long.
Oops, link did not work. Here is the correct URL: https://findingmoneyfilm.com/
Thanks this is interesting! How exactly does the "Shareholders, of course, will pay income tax on those dividends" and "when sold will naturally pay capital gains taxes" work when the shares are held by foreign corporations?
That one's a bit above my pay grade, I'm afraid. Although I do know that dividends are taxed in Canada (as a withholding amount) unless there's an existing tax treaty with the shareholder's country. Nevertheless since, one way or another, all that income would presumably be taxed in the foreign country anyway, on a macro-economic level, it probably works out the same way.
All taxation is theft. "Fair" theft is an oxymoron. Corporate tax is a tax on productive enterprise with capital investment-distorting consequences and paid for by consumers, employees, and shareholders. It is one of the least efficient forms of theft and should be abolished. The benefits would be substantial (accountants, lobbyists, and lawyers would have to seek productive work elsewhere), corporations would move to such jurisdictions, and the bonus would be the exploding heads of Jacobins and Bolsheviks.
For most people a fair tax system means they pay less while others pay more.
DB, put differently "I" shouldn't have to pay anything but "you" should have to pay everything.
Pretty well most people think that they are paying too much and others are paying too little. Most people.
I am a retired CPA and I found something very curious in my working life when I was dealing with the wealthy. There are, obviously, always exceptions but ever so many of my wealthy clients would acknowledge that they had a pretty good deal in Canada. Their comments came because they had often travelled to many parts of the world, whether for work or pleasure, and they found that low tax rates had terrifically deleterious effects.
Put differently, if you say that low tax rates are a panacea, then why don't you move to Mississippi? Mississippi has very low tax rates (comparatively) but also has a pretty low (comparatively) standard of living, etc., etc. That doesn't mean that the converse is true, i.e. that high tax rates are wonderful as they also are proven to be deleterious. The key - obviously - is (too paraphrase Goldilocks) not too high and not too low.
So, so many of my wealthy clients would tell me that I was to absolutely follow the rules and to not try anything that might attract the attention of CRA. Absolutely something that made me comfortable!
I found that my wealthy clients, as a general rule, just shook their head when I gave them "the number" and simply paid up; they didn't try anything untoward. They recognized that overall, our system worked. Imperfectly to be sure, but it worked.
My conclusion: the only thing wrong with the rich folks was that we simply didn't have enough of them! They paid outlandish amounts of taxes while ever so many of the rest of us benefited from (relatively) lower rates.
I view fair as a four letter word. Many declare something is fair or say something should be fair without ever explaining what is fair. When it comes to taxes trying to decide what is fair is a fool's errand. The problem is most items that are taxed have no direct connection to the services the government provides. As a result, it is easy to find examples of unfair tax situations.
I think the best we can do is come up with reasonable tax policies that are consistent, cost effective, and consider the economic impact.
I believe a number of Canadians think the wealthy and large companies have all kinds of loopholes that enable them to avoid taxes. As you have pointed out that isn't true, but a number of politicians perpetuate the myth in order to score cheap political points. After all it is easier to accept that the rich have done better than you because they are a bunch of crooks.