Tag Archives: Corporate Tax

News

Federal conservatives in Canada aim to cut spending and waste from budget

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Article from the National Post.

Excerpt:

The Conservative government sketched out on Thursday its initial plans to return to budget balance, by targeting cuts in the public service, a freeze on foreign aid, limited growth in military spending and higher EI premiums.

The spending restraint, outlined in its 2010 budget, would net $17.6-billion in savings over five years and bring the deficit down from a high of $53.8-billion this fiscal year, ending March 31, to a low of $1.8-billion by 2015.

Before the cuts kick in, however, the Conservative government said it was committed to spend $19-billion as part of year two of the two-year $47-billion stimulus package aimed at resuscitating the economy after the global financial crisis.

The 451-page budget sets out how the Conservatives plan to meet all its goals — of creating jobs and bolstering Canada’s long-term competitiveness, while at the same time returning to surplus without tax increases, nor cuts to transfers to provinces and individuals. The government also said it would go through with cuts to corporate income taxes, from 19% to 15% by 2012, despite calls from opposition politicians to cancel them and use the money to help seniors and the poor.

“We are building Canada’s reputation as an investment-friendly country,” Finance Minister Jim Flaherty said in his budget speech. “A country committed to free and open trade, unburdened by massive debts and [the] higher taxes of our competitors.”

[…]Even though Canada’s economy is recovering at a rather robust clip of late — 5% growth was recorded in the final quarter of 2009 — Mr. Flaherty said following through with more stimuli is the right thing to do as the global recovery is in its nascent stages.

Measures linked with the stimulus plan will expire as of March next year, and with it comes a plan to return to budget balance.

It’s like their entire country is being run by grown-ups! Why can’t we have that here?

News

New York governor unveils one BILLION dollars of new taxes

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Story from CBS News. (H/T ECM)

Excerpt:

Governor David Paterson said Tuesday that the days of profligate spending in Albany are over and that starting immediately lawmakers must participate in an “age of accountability.”

That said, the governor’s new budget has $1 billion in new taxes and nearly $800 million in cuts for New York City.

[…]”Our revenues have crumbled and our budget has crashed and we can no longer afford this spending addiction that we have had for so long,” Paterson said.

[…]”The mistakes of the past have lead us to the breaking point,” Paterson said.

But in addition to the severe belt tightening, the governor said he would need to raise $1 billion in new taxes and fees — some politically controversial.

* A $1 increase in the cigarette tax, raising the state tax to $3.75.

* A new soda tax that will cost consumers 1-cent per ounce — a 16-ounce bottle will cost 16 cents more, a 64-ounce bottle 64 cents more.

* The governor also plans to legalize and sanction cage fighting.

* And allow wine to be sold in grocery stores.

* And introduce 50 speed cameras on highways to catch unsuspecting motorists with fines of up to $100.

How did this happen?

New York legislators voted to tax the wealthy.

Then the wealthy left New York for red states.

And now Albany has no revenues to pay for all of their government spending on social programs, such as paying delinquent teachers to do nothing all day because the teacher unions won’t allow teachers to be fired, no matter how badly they screw up.

Governor Patterson never wanted anything to do with earlier tax increases on the wealthy. At least these new tax increases are on consumption, not on income, and not on corporations. Consumption taxes cost the fewest jobs, in my opinion. Consumption taxes encourage saving, too.

News

Business leaders blame Obama for high unemployment rate

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Story from Reuters about a recent jobs summit. (H/T American Spectator via ECM)

Excerpt:

At a recent symposium, Intel boss Paul Otellini, a contributor to both parties, expressed concern about the “amount of variability in the system” created by the state of policy flux in healthcare, energy and tax policy. “It is very difficult to make a hiring decision,” he said. General Electric chief executive Jeffery Immelt, a strong supporter of Obama’s cap-and-trade proposal, added he would just like to “know what the rules are.”

All in all, a disturbing replay of the 1930s when FDR’s big changes left business reeling with uncertainty and confusion. The “devil you don’t know” and all that.

Small business is certainly with Big Business on this, particularly regarding the mercurial nature of healthcare reform. The substance of ObamaCare continues to morph daily — from the state of the public option to employer mandates to financing expanded coverage – as Senate leader Harry Reid scrounges for votes. On energy, the president will make big promises at Copenhagen even though cap-and-trade looks stillborn in the Senate.

As for financial reform, Senate banking committee chair Chris Dodd has proposed sweeping changes, while the Tim Geithner-Barney Frank version in the House seems beamed in from a universe where the credit crisis never happened. Compromise could prove elusive. Even Obama’s tax reform panel has delayed releasing its findings.

The thing you have to understand about business is that finding and hiring an employee is an expensive process. If this employee has to be laid off later because of government increasing tax rates or regulations, then that layoff poisons the atmosphere in the entire company. If you want businesses to feel comfortable about hiring, you need to convince them that you aren’t going to raise their taxes or expenses, unionize their work force, fine them for hurting the environment, or pass laws that encourage their employees to sue them for being offended, etc.

Legislative initiatives like card-check, health care mandates, cap-and-trade, ENDA, increased government spending, tariffs, “pay equity” laws, restrictions on executive salaries, capital gains tax hikes, etc., make businesses very risk-averse about hiring decisions. If Obama wants to attack businesses, these businesses may just leave the USA and set up shop elsewhere. But more likely they will just stay here and avoid hiring any new employees until the 2012 election.