Tag Archives: Greedy Corporations

Canada’s tax revenues steady as they lowered corporate tax rates

Canada: Corporate tax cuts, not stimulus spending
Canada: Corporate tax cuts, not stimulus spending

From the Daily Caller.

Excerpt:

The chart shows Canada’s federal corporate tax revenues as a share of gross domestic product (GDP) and the federal corporate tax rate. The tax rate plunged from 38 percent in 1980 to just 15 percent by 2012. Amazingly, there has been no obvious drop in tax revenues over the period.

Canadian corporate tax revenues have fluctuated, but the changes are correlated with economic growth, not the tax rate. In the late 1980s, a tax rate cut was followed by three years of stable revenues. In the early 1990s, a plunge in revenues was caused by a recession, and then in the late 1990s revenues soared as the economy grew.

In 2000, Canadian policymakers enacted another round of corporate tax rate cuts, which were phased in gradually. Corporate tax revenues initially dipped, but then they rebounded strongly in the late 2000s.

The rate cuts enacted in 2000 were projected to cause substantial revenue losses to the Canadian government. That projection indicates that the reform didn’t have much in the way of legislated loophole closing. But the chart shows that the positive taxpayer response to the rate cut was apparently so large that the government did not lose much, if any, revenue at all.

In 2009, Canada was dragged into a recession by the elephant economy next door, and that knocked the wind out of corporate tax revenues. However, it is remarkable that even with a recession and a tax rate under 20 percent, tax revenues as a share of GDP have been roughly as high in recent years as they were during the 1980s, when there was a much higher rate. Jason Clemens of the Macdonald-Laurier Institute notes that Canadian corporate tax revenues have been correlated with corporate profits, not the tax rate.

If a corporate tax rate is high, there is a “Laffer effect” when the rate is cut, meaning that the tax base expands so much that the government doesn’t lose any money. Estimates from Jack Mintz and other tax experts show that cutting corporate tax rates when they are above about 25 percent won’t lose governments any revenues over the long run.

This data is no surprise to supply siders – we expect this because of past experience with tax cuts.

Tax cuts: do they work?

Consider this article by the Cato Institute discusses how the Reagan tax cuts affected the unemployment rate.

Excerpt:

In 1980, President Carter and his supporters in the Congress and news media asked, “how can we afford” presidential candidate Ronald Reagan’s proposed tax cuts?

Mr. Reagan’s critics claimed the tax cuts would lead to more inflation and higher interest rates, while Mr. Reagan said tax cuts would lead to more economic growth and higher living standards. What happened? Inflation fell from 12.5 percent in 1980 to 3.9 percent in 1984, interest rates fell, and economic growth went from minus 0.2 percent in 1980 to plus 7.3 percent in 1984, and Mr. Reagan was re-elected in a landslide.

[…]Despite the fact that federal revenues have varied little (as a percentage of GDP) over the last 40 years, there has been an enormous variation in top tax rates. When Ronald Reagan took office, the top individual tax rate was 70 percent and by 1986 it was down to only 28 percent. All Americans received at least a 30 percent tax rate cut; yet federal tax revenues as a percent of GDP were almost unchanged during the Reagan presidency (from 18.9 percent in 1980 to 18.1 percent in 1988).

What did change, however, was the rate of economic growth, which was more than 50 percent higher for the seven years after the Reagan tax cuts compared with the previous seven years. This increase in economic growth, plus some reductions in tax credits and deductions, almost entirely offset the effect of the rate reductions. Rapid economic growth, unlike government spending programs, proved to be the most effective way to reduce unemployment and poverty, and create opportunity for the disadvantaged.

The federal revenues as a % of GDP were steady.

The conservative Heritage Foundation describes the effects of the Bush tax cuts.

Excerpt:

President Bush signed the first wave of tax cuts in 2001, cutting rates and providing tax relief for families by, for example, doubling of the child tax credit to $1,000.

At Congress’ insistence, the tax relief was initially phased in over many years, so the economy continued to lose jobs. In 2003, realizing its error, Congress made the earlier tax relief effective immediately. Congress also lowered tax rates on capital gains and dividends to encourage business investment, which had been lagging.

It was the then that the economy turned around. Within months of enactment, job growth shot up, eventually creating 8.1 million jobs through 2007. Tax revenues also increased after the Bush tax cuts, due to economic growth.

In 2003, capital gains tax rates were reduced. Rather than expand by 36% as the Congressional Budget Office projected before the tax cut, capital gains revenues more than doubled to $103 billion.

The CBO incorrectly calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion. Revenues for 2006 came in $47 billion above the pre-tax cut baseline.

Here’s what else happened after the 2003 tax cuts lowered the rates on income, capital gains and dividend taxes:

  • GDP grew at an annual rate of just 1.7% in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1%.
  • The S&P 500 dropped 18% in the six quarters before the 2003 tax cuts but increased by 32% over the next six quarters.
  • The economy lost 267,000 jobs in the six quarters before the 2003 tax cuts. In the next six quarters, it added 307,000 jobs, followed by 5 million jobs in the next seven quarters.

The timing of the lower tax rates coincides almost exactly with the stark acceleration in the economy. Nor was this experience unique. The famous Clinton economic boom began when Congress passed legislation cutting spending and cutting the capital gains tax rate.

Tax revenues increased after the Bush tax cuts – due economic growth.

Those are the facts. That’s not what you hear in the media, but they are the facts.

Obama administration hands out 111 waivers from Obamacare

This video is 2 minutes long. (H/T Wes Widner of Reason to Stand)

ECM sent me this article for those who cannot see the video.

Excerpt:

111 companies and organizations were granted waivers by Obama’s Dept. of Health and Human Services so that they could get out of having to comply with Obamacare and unions were particularly well rewarded by the HHS with these waivers.

Interestingly, there was no great announcement of these waivers issued to the press. The HHS buried the waiver announcement six layers deep on its webpage and posted them on Friday when they imagined no one would notice. It’s a typical Friday evening document dump so common when an administration wants to avoid the prying eyes of the people. So much for the “most transparent administration in history,” eh?

One thing is sure about these waivers. Obama rewarded his union pals quite well.

[…]Interestingly enough, Obama has waived the onerous Obamacare rules for quite a few healthcare providers, too. One wonders how good Obamacare could be if the rules are waived for actual healthcare providers?

That article has the full list of the 111 special interest groups who got waivers from Obamacare. The rest of the corporations who did not get waivers will just have to lose jobs, I guess. I guess those are the ones that didn’t support Obamacare.

Remember how unions were pushing for Obamacare? Well they got waivers from it, too.

Neil Simpson has a list of UNIONS that got exemptions:

  1. Service Employees Benefit Fund
  2. UFCW Allied Trade Health & Welfare Trust
  3. IBEW No.915
  4. Asbestos Workers Local 53 Welfare Fund
  5. Plumbers & Pipefitters Local 123 Welfare Fund
  6. UFCW Local 227
  7. UFCW Maximus Local 455
  8. Local 25 SEIU
  9. UFCW Local 1262
  10. Local 802 Musicians Health Fund
  11. Greater Metropolitan Hotel
  12. Local 17 Hospitality Benefit Fund
  13. I.U.P.A.T.
  14. Transport Workers
  15. UFT Welfare Fund
  16. UABT

That’s the list of KNOWN unions.

If Obamacare is so great, then why do all the Democrat special interest groups have to get exemptions from it? Could it be that Obamacare is a job-killing nightmare that not even Democrats want to be bound by?

Barack Obama’s claim to save or create 150000 jobs falsified by FactCheck.org

Obama claim that his socialist policies that attack “greedy corporations” and “the rich” are actually increasing employment rates. Now, that seems to be impossible for rational people to believe, and FactCheck.org confirms that intuition. It is not possible for socialist policies such as card check, higher taxes, increased spending, more regulation, etc. to create more jobs than are lost from the changes.

Obama’s claim was:

At President Obama’s April 29 news conference, he claimed that the American Recovery and Reinvestment Act has “already saved or created over 150,000 jobs.”

That’s what he learned to believe at Harvard in his marxist rap sessions with the radical students and professors.

But how does the world really work?

According to the Bureau of Labor Statistics, the economy lost more than 1.3 million jobs in the two months after he took office, and it has probably lost at least another half-million in April. The day after Obama spoke, the Department of Labor announced that another 631,000 workers (seasonally adjusted) had filed new claims for unemployment insurance the previous week.

So what 150,000 jobs was Obama talking about?

It turns out the president’s claim is really an estimate of what his economic advisers think the stimulus bill is doing, and not based on any evidence of its actual effects.

But how does the White House respond to the falsification of their propaganda by reality?

We asked the White House for substantiation of Obama’s claim, and a spokesman responded that the figure comes from a recent estimate by the Council of Economic Advisers. “Because the baseline for employment is obviously still strongly downward,” the spokesman told us, “the estimate does not mean that employment has risen by 150,000. Rather, it means that employment is 150,000 higher than it otherwise would have been.” He said the figure is an estimate of people hired to work directly on ARRA-funded projects, plus “jobs created by the tax cuts, aid to the states, and other parts of the ARRA.”

So when the president said his stimulus bill “already saved or created” those jobs, he was just giving an estimate produced by his own economic advisers at the White House. Furthermore, the jobs figure is based on projections done at the time ARRA was passed. Recipients of ARRA spending aren’t required to report until later what they’re doing with the money and how well it’s working, so there’s very little hard data on where the money is being spent, let alone how many jobs may have resulted from the legislation. The CEA incorporated some actual spending reports into its estimate, but that information is not complete.

This is the result of voting by people who know more about the lives of celebrities than they know about economics. Imagine how surprised these Democrat voters are to find out that the 1 hour spent voting was not enough time to have thought anything through. Some of them thought that Obama was better on pro-life issues and government spending than McCain for example.

Remember, Democrats caused this recession and Republicans tried to stop it.